The Social Security Administration (SSA) has recently introduced a change that will positively affect the monthly payments for Supplemental Security Income (SSI) beneficiaries. This update ensures that informal food assistance will no longer reduce the payments for certain beneficiaries. Though announced last month, the change will take effect later this year. In this article, we will explore how this new SSA policy impacts SSI beneficiaries.
Understanding SSI
Supplemental Security Income (SSI) is a federal assistance program that provides financial aid to individuals with limited resources. To qualify for SSI benefits, individuals must meet specific eligibility requirements.
SSI beneficiaries include adults and children with disabilities or blindness, as well as adults aged 65 and older with limited income and resources. These benefits primarily help cover essential living expenses, such as housing, food, medicine, and clothing.
As of February, approximately 7.4 million Americans receive SSI payments. The SSA calculates these benefits using a rule known as “In-Kind Support and Maintenance” (ISM), which currently considers food and shelter as unearned income.
What’s Changing?
Under the current rules, support in the form of food or shelter is counted as unearned income for SSI beneficiaries, which can reduce their monthly payments or affect their eligibility for benefits.
The SSA’s new rule aims to eliminate these barriers and increase monthly payments for those receiving certain government benefits. Starting September 30, the SSA will no longer count food assistance when determining a beneficiary’s eligibility for SSI payments.
“The new policy removes a critical barrier for SSI eligibility due to an applicant’s or recipient’s receipt of informal food assistance from friends, family, and community networks of support,” states the SSA.
Impact of the Change on SSI Beneficiaries
Under the current ISM rules, the SSA reduces SSI payments when a beneficiary (or couple) receives food or shelter support from another person. For example, if an SSI recipient lives with their father and doesn’t pay rent, the SSA considers this as ISM when calculating their monthly payment.
In 2024, the maximum federal SSI payment is $943 for individuals, $1,415 for couples, and $472 for essential persons (those who live with an SSI beneficiary and provide care). To qualify for SSI, a beneficiary must earn less than $1,971 per month and have resources below $2,000 per individual or $3,000 per couple. Resources include money or assets that can easily be converted to cash, such as property, shares, or bank balances.
The new rule will allow SSI beneficiaries to receive groceries or meals from family or friends without worrying about a reduction in their monthly benefits. This change could also reduce overpayments or underpayments and stabilize monthly payments, offering beneficiaries greater financial security.
Additionally, the new rule helps SSI recipients cope with rising food costs as inflation continues to increase grocery bills. It also reduces the amount of information that applicants and recipients need to report to the SSA, saving time and providing peace of mind.
The SSA will benefit from this change as well, as it will no longer need to document every instance a beneficiary receives food assistance and adjust their payments accordingly.
It is important to note that while the SSA has removed food expenses from ISM calculations, it will still ask beneficiaries about food to determine which rule – the One-Third Reduction (VTR) rule or the Presumed Maximum Value (PMV) rule – to apply when calculating SSI payments.
For example, if an SSI applicant lives with another person, the SSA will ask if that person provides all their food. If not, the SSA will use the PMV rule to value the shelter.
The VTR rule applies when a recipient lives with another person who also provides all means of support. If ISM is received and the VTR rule does not apply, the SSA uses PMV, reducing the SSI benefit by the actual ISM amount or one-third of the SSI benefit.
Final Thoughts
The change to ISM calculations is undoubtedly a positive development for SSI beneficiaries. It is expected to have widespread implications, as the SSA previously reported reducing the benefits of 793,000 recipients due to food or shelter assistance.
This change reflects the SSA’s intent to simplify the SSI benefits process and demonstrates its commitment to improving service delivery and the overall well-being of beneficiaries. Moreover, this rule change is part of a broader set of reforms that the SSA is working on, all aimed at making it easier for people to receive and apply for benefits.