Special Needs and Housing: How You Pay Can Affect SSI Benefits
Likely the most weighted factor used in determining whether SSI recipients will qualify for the maximum benefit is their housing arrangement.
Individuals living by themselves who pay their rental expenses, inclusive of utilities, are eligible for the maximum monthly SSI benefit. (This is with the assumption that they fulfill all other criteria to receive the maximum.) Similarly, if the SSI recipient cohabitates with another individual or individuals but pays their appropriate and proportional share of the rental expense, the SSI recipient qualifies for the maximum monthly benefit.
On the flip side, if a third party pays rent for the beneficiary—be it a special needs trust or a parent—the Social Security Administration (SSA) will reduce the maximum SSI benefit by one-third, plus $20.00. To give an example, say a woman receives $750.00 from SSI, but her special needs trust pays for her monthly rent for her apartment, her benefit will be reduced to $520.00.
The parents of SSI beneficiaries who are minor children and spouses of SSI beneficiaries are not classified as third parties within the applicable SSA rules, so payments by them for a beneficiary’s housing will have no bearing on the SSI recipient’s monthly benefit. It should be noted, however, that SSA income requirements apply to parents of minor children and spouses and could very likely disqualify an individual from SSI for that reason.
The same rules apply for other types of housing situations and related expenses, for instance where rather than a special needs trust or another third party covering rent, it covers the SSI recipient’s mortgage payments, homeowner fees or, co-op fees. Also, the same guidelines are used for monthly payments for utilities, such as gas, electricity or charges for water use.
Typically, those who are institutionalized for a time, for example in a nursing home, hospital, or assisted living facility, will not qualify for SSI, with a few exceptions. Though having a permanent address is not a requirement for continued SSI eligibility. SSI benefits typically stay active if the person is homeless or living in a shelter. Payments made from a special needs trust to a beneficiary can affect eligibility for Section 8 housing assistance also.
Lastly, SSI recipients who travel, third parties can pay for travel expenses such as hotel and food without causing a reduction in the recipient’s benefit.
Navigating the arena of SSI and housing can be tricky, so consider consulting with a fiduciary financial advisor who is experienced in helping families with special needs.