Income and SSI Eligibility for Children

In addition to being found disabled, your child and your family must meet the Social Security Administration’s definition of limited income and limited resources. When a disabled child under the age of 18 lives with a parent and at least one parent does not receive SSI, the agency will count some of that parent or stepparent’s income in figuring the child’s SSI benefits.

The process is called “deeming” and the amount of income deemed to a disabled child will depend on the amount of countable income the parents and any children not eligible for SSI have. It will also depend on whether the parents’ income is earned or unearned and the number of ineligible children in the household.

How does income affect eligibility for SSI benefits?

In general, the agency will consider a parent or stepparent’s:

  • Earned income—job earnings or net earnings from self-employment;
  • Unearned income—monies not received through employment, such as pensions, Social Security benefits, unemployment, and cash gifts.

Certain income is not deemed, including:

  • The value of in-kind support, such as food or shelter you receive for free or less than it is worth;
  • Temporary assistance for needy families;
  • Foster care payments;
  • Income used to make court ordered payments;
  • Public income-maintenance programs;
  • Tax refunds on income, property, or food purchases;
  • Grants, scholarships, fellowships, and gifts used to pay or set aside for educational expenses;
  • Income received infrequently;
  • Housing assistance;
  • Disaster assistance;
  • Earned income of a student.

How does deeming work?

The deeming process is as follows:

First, part of the parents’ income is allotted to the care of any other children in the household who do not receive public income maintenance. The 2014 allotted amount is $361, but the amount can be reduced by certain types of income the child may have. Child support can be counted as income, thereby reducing the allocation.

Allocations are first applied to reduce the parent’s unearned income. If the parent does not have enough unearned income to offset the allocations, the allocations will then be applied to the parent’s earned income.

After calculating the parent’s total income minus the allocations, the agency will subtract a $20 general income exclusion and an earned income exclusion of $65 and one half of the remainder of the parent’s income.

Finally, the agency will subtract the parent’s living allowance, which is currently set at $721 for a single parent and $1,082 for two parent households, mirroring the Federal Benefit Rate. This is the amount which will be deemed to your disabled child. To be eligible for SSI, this countable income must be less than the Federal Benefit Rate of $721 per month for an individual and $1,082 for a couple. Your child’s monthly award will be reduced by your income which is deemed to them.

Here is an example that may help: Mr. and Mrs. Smith have two children including Eva, who has a disability. Mr. Smith’s gross income is $1,000 a month and Mrs. Smith earns $500 a month working part-time. The family receives food stamps. To calculate Eva’s SSI benefits, we would:

  1. Enter an allocation of $361 for the Smith’s non-disabled child.
  2. Exclude the Smith’s food stamps because they are exempt.
  3. Calculate the Smith’s combined gross monthly income: $1,000 plus $500 equals $1,500.
  4. Subtract the $361 allocation from the Smith’s earned income because they have no unearned income: $1,500 minus $361 equals $1,139.
  5. Subtract the $20 general income exemption, leaving $1,119.
  6. Subtract the $65 earned income exemption, leaving $1,054.
  7. Disregard half this income amount, which leaves us with $527.
  8. Subtract the living allowance of $1,082 for a two parent household.
  9. Since this equates to a negative balance, Eva would be eligible for the full SSI award.

The limited resources test

To be eligible for SSI benefits, a disabled child and his or her family must have limited resources. As with income, certain assets are deemed to the special needs child under the age of 18. If you are a single parent household, $2,000 of your assets will be exempt from consideration. If your child lives with both parents, $3,000 in assets will not count towards the resource limit. Any amount over the parent’s resource limit will be counted as part of the child’s $2,000 resource limit.

The Social Security Administration will consider the following items as resources:

  • Cash;
  • Bank accounts, stocks, bonds;
  • Life insurance;
  • Land;
  • Personal property;
  • Vehicles;
  • Anything that can be exchanged for cash and used for food or shelter;
  • Deemed resources.

The Social Security Administration exempts certain resources, including:

  • The home and land you live on;
  • Household goods;
  • Personal effects;
  • Burial plots;
  • Life insurance policies of $1,500 or less;
  • Grants, scholarships, fellowships, or gifts to pay for educational expenses;
  • Certain trusts, such as Supplemental Needs Trust;
  • Property essential to self-support.

Selling or giving away resources

If you are trying to sell real property or other resources which push you over the resource limit, your child might be eligible for SSI while you are trying to sell them. The benefits would be conditional, meaning they would have to be paid back after sale of the resources.

If you give away a resource or sell it for less than its true market value, your child may be ineligible for SSI benefits for up to 36 months, as determined by the value of the resource you gave away.

Appealing the eligibility determination

It is important to note that if your minor child has been denied for SSI benefits, you do have the right to an appeal. A disability law attorney, concentrating in social security law, can provide you with vital assistance in fighting an unfair determination.

At Stern Law, PLLC, we understand how complex and confusing the SSI application process can be, particularly for those attempting to obtain benefits for their minor children. For assistance finding a qualified attorney or for questions concerning the SSI eligibility process, call Stern Law, PLLC today at (800) 462-5772.

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