Social Security May Change How Living Arrangements Affect SSI Disability Benefits

October 4, 2023

More than 40,000 Supplemental Security Income (SSI) beneficiaries nationwide could see increases in the size of their monthly disability benefit payments if the Social Security Administration (SSA) adopts a proposed update to its rules.

And an estimated 14,000 Americans who don’t receive SSI now would be able to qualify for the program as a result of the change.

SSI is based on financial need in addition to having a qualifying disability. The Social Security Administration says, “It is designed to help aged, blind, and disabled people, who have little or no income.”

SSI disability benefits are for individuals who have serious medical conditions and have never been able to work, or who have worked but not enough to qualify for a different program, Social Security Disability Insurance (SSDI) benefits.

The Supplemental Security Income program has stringent eligibility requirements that haven’t been adjusted for decades. For more on this topic, see disability attorney Tom Nash’s informative blog article, “Congress Must Raise SSI Asset Limits.”

The maximum SSI benefit in 2023 is a paltry $914 per month for an individual (which is about 25% below the current federal poverty level).

The finances of SSI beneficiaries are subject to intense scrutiny by the government, including a requirement to give the government permission to monitor their bank accounts. Currently, an SSI beneficiary must report if somebody helps them by paying some or all of their food or shelter costs (which is known as in-kind support and maintenance, or ISM).

The SSA considers ISM as a form of income—a key factor in determining eligibility and payment levels for SSI. If a beneficiary is receiving ISM, their benefit amount can be slashed by as much as one-third, meaning a $304-a-month reduction for those earning the maximum benefit.

However, the agency uses a less severe standard in seven states as a result of court rulings. In these states, benefits are not reduced if a person is spending more than a third of their income on housing. Under the proposed rule, this more lenient standard would extend to the whole country.

“The current lack of uniformity in our business arrangement definition can disadvantage affected SSI applicants and recipients who do not live in states where the rental subsidy exception applies,” the agency wrote in its posting in the Federal Register. “The proposed rules, if finalized, would benefit SSI applicants and recipients, no matter the state they live in, and make the SSI program easier to administer. The proposed change would also make the SSI program more equitable by applying the rental subsidy policy uniformly to all affected SSI applicants and recipients, regardless of where they live.”

The Social Security Administration estimates that if the rule is changed, current SSI beneficiaries would see their monthly payments go up by an average of $128 per month. This could help disability benefits recipients, along with an earlier Social Security Administration proposal to remove food from its calculation of in-kind support and maintenance.