Understanding the Basics of Supplemental Security Income (SSI)
By Don Drake, Connelly Law Offices, Ltd.
"In our previous blog, we discussed Social Security Disability Insurance (SSDI), and in this edition, we will look at the basics of Supplemental Security Income (SSI) program," stated professional fiduciary and certified elder law Attorney RJ Connelly III. "Let's start with the history of the program. SSI was introduced over four decades ago to provide monthly cash assistance to disabled or older individuals with limited income and assets. The program was designed to support individuals unable to work due to physical or mental conditions or those who have reached retirement age but lack the financial resources to sustain themselves."
The Social Security Administration (SSA) administers the SSI program, which is distinct from the Old Age, Survivors, and Disability Insurance (OASDI) program, commonly called Social Security retirement benefits. The SSI program has been instrumental in providing financial support to some of the most vulnerable members of society, enabling them to lead a dignified life. Unlike Social Security, which is financed by dedicated payroll taxes, the program is funded through general revenues.
"It's interesting to note that the SSI program's administrative costs are substantially higher than those for Social Security due to its complex rules," Attorney Connelly points out. "SSI is generally for individuals who don’t earn more than $1,971 from work each month. The income limit increases for couples and when parents apply for children. To be eligible for SSI, individuals must meet specific criteria, including being totally or partially blind or having a medical condition that prevents them from working and is expected to last for at least one year or result in death. If you have a disability, you’ll also need to prove you’ve earned less than $1,550 from work per month in the month you’re applying. Those age sixty-five or older don’t need to have a disability to get SSI."
SSI also provides financial assistance to help cover the cost of basic needs such as food, clothing, and shelter. Moreover, SSI may also provide access to other benefits such as Medicaid and Supplemental Nutrition Assistance Program (SNAP) to meet healthcare and nutritional needs.
An individual's SSI payment may vary depending on several factors. For example, if an individual lives in a state that adds money to the federal SSI payment, they may be eligible to receive more than the basic amount. Conversely, if an individual has other sources of income, their SSI payment may be reduced.
"The monthly maximum federal amounts for 2024 are $943 for an eligible individual, $1,415 for an eligible individual with an eligible spouse, and $472 for an essential person," said Attorney Connelly. "In general, monthly amounts for the next year are determined by increasing the unrounded annual amounts for the current year by the COLA effective for January of the next year."
Assets and Resources
The amount of assets an individual has also plays a role in determining the amount of SSI payment they receive. The living arrangements can also affect the SSI payment an individual receives. If an individual lives alone, they may be eligible to receive the total amount of the basic monthly SSI payment. However, if an individual lives with others, such as a spouse or family member, their payment may be less. This is because the SSA assumes they can share living expenses with others, reducing their need for financial assistance.
An individual can receive Supplemental Security Income (SSI) if the total value of their resources (such as savings and assets) is less than $2,000 if they are an individual or less than $3,000 if they are a married couple living together. It is important to note that everything they own is not included when determining their eligibility for SSI. For SSI, they do not count:
The home you live in and the land it is on.
One vehicle, regardless of value, if you or a household member use it for transportation.
Household goods and personal effects such as wedding and engagement rings.
Life insurance policies with a combined face value of $1,500 or less.
Burial spaces for you or your immediate family.
Burial funds for you and your spouse, each valued at $1,500 or less.
Property you or your spouse use in a trade or business, or on your job if you work for someone else
If you are disabled or blind, you have set aside money or property under a Plan to Achieve Self-Support (PASS).
Up to $100,000 of funds in an Achieving a Better Life Experience (ABLE) account established through a State ABLE program.
"In most states, if an individual is an SSI recipient, they may be automatically eligible for Medicaid as an SSI application is also an application for Medicaid," stated Attorney Connelly. "In other states, recipients must apply for and establish their eligibility for Medicaid with another agency. In these states, the Social Security Administration directs them to the office where they can apply for Medicaid."
SSI and Retirement Age
"In our previous blog, we discussed how the Social Security Disability Insurance (SSDI) benefits are affected when a disabled individual reaches their full retirement age," said Attorney Connelly. "If someone is receiving SSDI benefits before turning 62, their benefits will automatically be converted into retirement benefits once they reach their full retirement age. This conversion will not affect their monthly payment amount, and they will continue to receive the same amount as before."
However, if a disabled individual under 62 years of age wants to convert their SSDI benefits into early retirement benefits, they must choose to opt in for early retirement. Otherwise, their SSDI benefits will not be converted to retirement benefits before reaching full retirement age.
"With SSI, it's a different process," stated Attorney Connelly. "If someone is receiving SSI, they must apply for any other benefit programs they may be eligible for before receiving SSI income. If a disabled individual with prior work credits was denied SSDI but granted SSI, they must file for retirement benefits when they become eligible."
"If the retirement benefits amount to less than their current SSI payments, they may be able to supplement their retirement income with SSI benefits," he continued. "However, the total benefit amount must not exceed the maximum allowable payment under the SSI program, which in 2024 is $943.00. Remember, there are different rules for different benefit programs, and it's crucial to understand them to maximize the benefits you may be entitled to."
Please note that the information provided in this blog is not intended to and should not be construed as legal, financial, or medical advice. The content, materials, and information presented in this blog are solely for general informational purposes and may not be the most up-to-date information available regarding legal, financial, or medical matters. This blog may also contain links to other third-party websites that are included for the convenience of the reader or user. Please note that Connelly Law Offices, Ltd. does not necessarily recommend or endorse the contents of such third-party sites. If you have any particular legal matters, financial concerns, or medical issues, we strongly advise you to consult your attorney, professional fiduciary advisor, or medical provider.