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A Primer on SSI for the Aged, Blind or Disabled
Jan L. Warner & Jan Collins

Question: My father died several years ago and left my mother, age 76, with only a small house and less than $5,000. Her total income is $450 monthly. We have tried to get her Medicaid because she is getting feeble, but they tell us that she “is not sick enough.” Are there other programs to which she might be entitled?

Answer: The Social Security Administration handles a federal program called Supplemental Security Income (SSI). This program provides cash assistance for certain aged, blind, and disabled individuals who qualify. A person can receive both SSI and Social Security payments. To be eligible, your mother must (1) be at least 65 years of age, blind, or disabled, (2) be a United States citizen, (3) meet certain income and resource requirements, (4) not be an inmate of a public institution, and (5) file an application.

To qualify for SSI, your mother must meet both Income and Resource Limits.

INCOME LIMITS: To qualify for the SSI program in 2001, your mother’s monthly income must be below $530. (For a couple, their combined monthly income must be below $796.). But determining “income” for SSI purposes can become complicated because SSI does not necessarily count all of the income that received and because SSI looks at “earned” and “unearned” income, “in-kind support and maintenance,” and “deemed income.”

“Earned income” includes gross wages from third persons, (or net earnings if self-employed), but does not include such items as federal assistance payments and infrequent income of $10 per month. Neither the first $65 of wages nor one-half of all wages over that first $65 is not counted against the income limit.

“Unearned income” refers to annuities, pensions, alimony, support, dividends, life insurance proceeds, gifts, inheritance, and the like. SSI generally excludes the first $20 in unearned income, and does not count such things as food stamps, home energy and housing assistance, scholarships toward tuition, and one-third of child support payments.

“In-Kind Support and Maintenance” means food, clothing, and shelter paid for by a third person that may affect a recipient’s benefits. For example, if your mother lives in your home, her SSI benefit could be reduced by up to one third -- unless she pays a pro rata share of expenses.

“Deemed Income” means the attribution of income of a third person to the applicant which also reduces benefits. This generally comes into play when an applicant for SSI lives with an ineligible spouse. In this situation, the income of the ineligible person is determined by SSI after which calculations are made to set the benefit level.

RESOURCE LIMITS: Generally, if an unmarried person’s resources exceed $2,000 -- and if a married couple’s resources exceed $3,000, that person may not be eligible for SSI benefits. For SSI purposes, “Resources” include cash, financial instruments that are convertible to cash, and real estate and personal property that the applicant can liquidate. Depending on the situation, the resources of third persons sharing the applicant’s household may be “deemed” to the applicant.

Resources which do not count include your mother’s home, $2,000 in household goods and personal effects, an automobile necessary for work or medical care or, if not necessary, up to $4,500 of the value of an automobile; property necessary for a trade or job; the cash surrender value of life insurance having a face value of less than $1,500; and certain burial arrangements.

If your mother qualifies, the SSI monthly benefit will supplement her countable income to the extent needed to raise it to $530 per month. (An eligible couple’s income will be supplemented up to $796). Some states provide an additional supplement from state funds. An additional benefit of receiving SSI is that your mother could qualify for Medicaid in most states, and may qualify for other programs such as food stamps.

Remember: Transferring assets to get below the limit will cause a period of ineligibility for SSI, and may also affect Medicaid eligibility should the applicant later be institutionalized.

Thoroughly confused? Join the club. Since SSI and other federal and state benefits programs are very complicated, and since the rules vary from one program to another and from state to state, be sure to learn all your options before you begin the application process.

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