Qualifying for Disability Benefits Through Parent Work Record
Adults who became disabled before turning 22 may qualify for SSDI if they have a parent who meets certain qualifications.Read more
Supplemental Security Income (SSI) is a federal safety net program for the elderly, blind, and disabled, providing them with a minimum guaranteed income.
If your resources are above the program’s resource limits of $2,000 for an individual or $3,000 for a couple, you may be able to “spend down” your resources to qualify for SSI, similar to the process of qualifying for Medicaid.
However, a person cannot simply transfer countable resources to qualify for SSI, as this can cause significant problems.
The Social Security Administration’s (SSA) position is that resources available to you are cash or anything you own that you can convert into cash.
Bank accounts, brokerage accounts, cryptocurrency accounts, second vehicles, inheritance, lump sum settlements, investment property, stocks, bonds, certificates of deposit, and life insurance (one or more policies) with a face value over $1,500 are just some of the examples of what counts as a resource.
However, not all resources count for SSI eligibility determination. The following are excluded:
Transferring a resource is defined broadly to include gifts and outright transfers of a resource. Any transfers of resources can cause you to be ineligible for SSI for up to 36 months. Selling a resource for less than it is worth is also potentially problematic.
Furthermore, any money you receive from a sale can make you ineligible for SSI if the amount received exceeds the countable resource limit.
The bottom line is that the SSA looks at whether you have transferred any resources within the previous three years. If you have, it computes a penalty period by dividing the transfer amount by your monthly benefit amount.
In addition, if you become ineligible for SSI or are subject to a penalty period, your Medicaid benefits could also be impacted. This is because, similarly to SSI, Medicaid is a “means-tested” benefit for particular recipients.
If you give your son a $6,000 gift and then apply for a monthly SSI benefit of $600 within three years of the gift, you will not be eligible for SSI for 10 months (6,000/600=10). That 10-month period will begin on the date of the transfer and end 10 months later.
In other words, although you can be ineligible for up to 36 months due to a transfer, that is only a cap. The actual period of ineligibility is based on the value of what you transferred, divided by the monthly benefit in your state.
Not all transfers prevent you from qualifying for SSI. In fact, with appropriate planning, persons with special needs who meet specific qualifying criteria can transfer their resources into a supplemental or special needs trust.
If done correctly, a person can still qualify for SSI after transferring assets to this trust. But, a person should only do this type of transfer with the guidance of an experienced attorney.
It is possible that a problematic transfer could be “cured” by the person to whom you made a gift or transfer, by returning to you the resource in question. However, this could result in the resource returning to your countable resources and pushing you above the applicable limit.
Certain exceptions to the transfer penalty may apply in your situation. These include, but are not limited to, the following:
If you need advice on how to properly “spend down” assets or have received an SSI suspension or termination notice from SSA, you should speak with a special needs planner in your area. You may be able to reverse the suspension, reinstate benefits, or prevent these events from happening.