June 10, 2024


Liz Yoder, CFP®

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Changes Coming to SSI

In October 2024, a major change is coming to Social Security’s Supplemental Security Income.

Previous Social Security Income By Disability Advice

Let’s launch into the prior advice given to 18-year-olds becoming eligible for Social Security by disability. A part of the SSI program requires that In-Kind Support and Maintenance be accounted for when an SSI recipient is to receive their check. In-Kind Support and Maintenance, ISM for short, has been the basic living expenses of food and shelter. 

When adults become eligible for SSI, they are encouraged to pay rent to their parents or other housemates so that their SSI is not reduced by one-third. Then, the recipient of the rent, having the funds legally placed into their name through a rental agreement, could do whatever they want with those funds, including gifting them back into an ABLE account or to other shared expenses. However, the calculations for what fair share rent is have been complicated.

First, families would review what living in the home costs. They would review mortgage payments, utilities, and upkeep. They would also review the family's food budget. Then, they would attribute a fair share of rent based on local market rates of what it would cost to live in the home if the adult were to pay rent. 

In high-cost-of-living areas, qualified individuals eligible for SSI could not afford fair share market rent to live with their families. In that case, we sometimes encouraged the family to forgo the trouble of non-reduced Social Security. 

But beyond that, determining fair share was overly complicated, and the Social Security Administration currently agrees. Our Special Needs Certified Financial PlannersTM provide benefit review services.

Here is where the changes come in.

Upcoming Social Security Income By Disability Advice

In 2024, the Social Security Administration will no longer count food costs and In-Kind Support and Maintenance. They have also determined that fair share market rent can be simplified. Their new policy is to reduce SSI only if someone does not pay the determined rate of $334.33 monthly for rent. 

That’s right. No more form to figure out how much house the recipient is using. No back and forth with SSA on what number is appropriate. No one should pull the majority of the recipients' money away from them so that they can receive a higher amount of Social Security. Pay the estimated 1/3 of Social Security income for rent and receive the full amount owed to the recipient. This 1/3 of Social Security income aligns with the calculated rent for someone receiving rental support from the Department of Housing and Urban Development (HUD). All recipients receiving SSI would be eligible for these vouchers if they were available in their locality due to the similar assets and earnings tests of HUD and SSI programs.

This change can be made for all families who previously had a rental agreement for their family members receiving SSI. Our Special Needs Certified Financial PlannersTM can discuss how this may impact you.

Do not assume that the SSA will automatically make these changes. The recommendation is to restate your rental agreement or put one in place if skipped and allow the beneficiary to keep a higher Social Security payment.

As a reminder, the requirement to have a rental agreement in place is a function of SSI, not SSDI. Suppose your family member has shifted onto SSDI due to their work history or due to now being eligible for parental benefits (from a parent who has filed for Social Security themselves or who has died). In that case, there is no requirement to establish a rental agreement. Those benefits are entitled to the beneficiary by paying Social Security taxes through work history.

If you have questions about how these changes impact your plan, contact our disability specialists for a review.

Contact our Special Needs Certified Financial PlannersTM.

Contact Our Special Needs Certified Financial PlannersTM