Navigating the ins and outs of federal benefits like Social Security feels like diving into a maze, especially with all the jargon about in-kind support, rental liability, and financial assistance. What do caregivers need to know to figure out this complex system?
The Social Security Administration (SSA) uses a detailed process to make living arrangement and In-Kind Support and Maintenance (ISM) determinations for applicants when calculating SSI benefits. There are two main factors: (1) the living arrangement and (2) the type and amount of ISM, if any.
In turn, these factors determine the amount of benefits a person receives. If you live on your own, you receive the full income guarantee, called the federal benefit rate (FBR). If you live with someone else, you receive a reduced rate.
The Social Security Administration lists four primary living arrangements:
The Social Security Administration has specific rules outlining countable income and calculations. Refer to the Social Security Adminstration website or speak with your family financial advisor.
In-kind support and maintenance is food, shelter, or both that somebody else provides for you. The SSA counts in-kind support and maintenance as income when determining the amount of a person's SSI benefits.
The SSA does not count in-kind support and maintenance if one of the following applies:
ISM can lead to a reduction in the maximum benefit amount through the One-Third Reduction Rule.
If a person lives in someone else's household and receives food and shelter from within the household (living arrangement B), their federal rate is reduced by one-third. This reduction is instead of counting the actual value of the support received. However, a recipient who has rental liability or pays at least a pro rata share of the household's food and shelter costs is not classified under living arrangement B and is not subject to this rule.
If a person or a couple receives in-kind support and maintenance (ISM) but is not subject to the one-third reduction rule, then the Presumed Maximum Value (PMV) rule applies. This rule applies to a person who lives in someone else's home but doesn't get both food and housing from them or lives in their own home and gets support from someone inside or outside the household.
The presumed maximum value is calculated by taking one-third of the federal benefit rate and adding $20 (the general income exclusion). If a person can prove that the actual value of the in-kind support they receive is lower than the PMV, this amount may be used to calculate their payment. The PMV rule may require detailed documentation of contributions to the recipient and ongoing household expenses paid by all household members.
Under current conditions, the Social Security Administration has imposed a reduction limit despite living arrangement rules. Even if the value of ISM is more than one-third of the maximum SSI benefit, the overall reduction can't go over a specific limit, adjusted annually.
The Social Security Administration provides financial assistance so families don't fall into deep poverty. The program lifts many American families out of extreme poverty.
Any major change in the Social Security Administration's financial assistance would affect the program's overall poverty rate outcomes. Capping the reduction prevents caregivers and families in extreme poverty from falling through the cracks.
While you can't manipulate living arrangements to increase SSI benefits, there are ways to optimize shelter costs within the Social Security Administration guidelines:
When an eligible person receives in-kind support or has living arrangements other than Living Arrangement A, it can impact their monthly federal amount. By maintaining a separate residence, your loved one receives the total benefit amount. Then, they can meet basic living expenses and stay above the poverty threshold. Federal levels focus on assisting low-income people with these basic needs like your loved one.
If your live-in care recipient provides care for a minor child or a disabled person, this can affect the federal benefit levels. Even if they don't provide cash for shelter costs, utilities, or food costs, the Social Security Administration reviews the value of their contributions toward household expenses. The share of food and other household expenses affects eligibility. Your loved one's marital status and adult children's presence in the household can also impact federal benefit levels.
Keep detailed records of your relative or adult child's rent payments and countable income for the entire month. Record-keeping strengthens a Social Security claim to maintaining a separate household, which matters for Social Security eligibility determination.
Always document the share of expenses and basic living expenses, such as rental liability, to guarantee economic assistance and eligibility.
Clear records really matter regarding spouses, a minor child, or other individuals receiving in-kind support and maintenance.
Contact a Social Security advocate or disability lawyer who can help resolve complex situations for families in need. They will work with you to ensure that your loved one receives the monthly payment they deserve.
