SSI's Rules for "Deeming" a Parent's Income to a Child

The costs of raising a child with a disability can add up to very significant amounts over time.

For many families, the ability to qualify for public benefits can mean having access to much-needed supplemental resources.

For example, children with certain disabilities may be eligible for such benefits as Supplemental Security Income or Medicaid, which can make all the difference for parents.

What Is Supplemental Security Income (SSI)?

Supplemental Security Income (SSI) is a federal program that helps people with disabilities and very low incomes pay for food, clothing, and shelter.

But even more valuable than the SSI benefit itself is that, in most states, a beneficiary who receives even $1 from the program also qualifies for Medicaid health coverage. However, in order to qualify for SSI, parents of children with disabilities should be aware of “deeming.”

What Does Deeming Mean?

To qualify for SSI benefits, the beneficiary’s income and assets cannot exceed certain limits. But the Social Security Administration (SSA) doesn’t look at just the child’s income and assets. It also may consider a portion of the parents’ income and assets as if they were available to the child; this is called “deeming.”

The logic behind the deeming rule is that parents have a legal duty to support their child. Because the parents’ income and assets would in theory be legally available to support that minor child, their income and assets may be factored in the determination of the child’s needs for purposes of SSI eligibility.

In What Cases Are Children Deemed?

Unmarried children under the age of 18 seeking SSI benefits may be deemed with the income and assets of any parent with whom the child lives, and even a stepparent if the stepparent and parent live together.

If the parents are divorced and the child lives with only one parent, the child is not deemed with the income or assets of the parent living in another household.

If a parent receives their own SSI benefits, or if the child does not live with either parent – for example, a child lives with a stepparent or grandparents, and no parent lives in the home – there is no parental deeming.

The amount of deeming to the child is reduced if the child is living in a household with other children under the age of 21. Once a child reaches the age of 18, even if they are living with a parent, deeming of parental income ceases and only the child’s own income and assets are counted in determining SSI eligibility.

Investment Income, Wages, Gifts: Earned or Unearned Income?

The SSA defines “income” as both “earned” income (like wages) and “unearned” income (like retirement and investment income, unemployment benefits, and gifts).

Note that Social Security benefits are also counted as unearned income. For example, in 2022, a child with special needs living with one parent earning less than $3,909 a month in earned income would qualify for SSI. If all the parent’s income is unearned, the monthly income limit would be $2,142.

“Income” also includes noncash items, such as the value of food and housing one receives from others. These are more commonly known as “in-kind” items of income and are considered unearned income as well.

What Counts as Assets, According to the SSA?

Assets, or what SSA refers to as “resources,” include things like bank accounts, cash on hand, and investments.

However, not all assets are counted. For example, a parent’s home, automobile, and most retirement accounts are excluded from being counted. But while a retirement account itself may not be counted, any payment from the account to the parent is countable income and thus subject to being deemed to the child.

How Is Deeming Calculated?

The calculation of the deeming of income is complex. The living arrangement of the child makes all the difference, and it is not one-size-fits-all. The SSA provides an annually updated Deeming Chart to help families make this calculation.

However, there are many exceptions that would cause the chart not to apply to a particular family’s situation. One exception is if the family has a mix of earned and unearned income, which many do. A family’s best resource is the procedure, or formula, that SSA uses in the deeming calculation, and this can be found on the SSA’s website.

If you have a minor child with special needs, SSI benefits – and by extension, Medicaid coverage – may be available to your child. It may be worth crunching numbers and reviewing SSA’s charts and formulas to see whether your child may qualify.

And if your child is already receiving SSI benefits, it is important to understand the basic workings of these deeming rules so that you do not inadvertently jeopardize those benefits.

The rules are complicated. Your special needs planner can help you sort through them and determine if your child might qualify for SSI. Find a qualified special needs planning attorney near you today.