You may have a disabled child who’s turning 18. And you’ve heard from others, maybe other parents, your child might qualify for a benefit called Supplemental Security Income, or “SSI.”
What is that? And how can your child qualify? How can you protect your child’s SSI after you’re gone? Read on to find out!
What Is Supplemental Security Income SSI?
SSI is a program run by the Social Security Administration that provides supplemental income to those with disabilities.
Let’s say your child is disabled and can’t work because of it. For this reason, they cannot get an income stream from a job.
So, the government will provide an income stream for your child. It’s called Supplemental Security Income, SSI Disability, or just SSI.
And the idea is that it supplements whatever income your child is already receiving from you, a trust, some work, or other sources. But there are some rules to follow to ensure your adult child gets the total amount.
It has to supplement, not replace.
Supplemental Security Income SSI
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How Much Is Supplemental Security Income (SSI)?
It’s called Supplemental Security Income SSI in California, so it’s not intended to be a person’s whole income. SSI pays up to about $1,040 a month of income in 2022. This includes the additional payment that California adds to the federal amount, which is only $841 a month.
So, you get more in California to account for a higher cost of living. But here’s the kicker. You’re supposed to pay for your disabled loved one’s food and shelter, which is really funny.
I mean, can any of us survive in California on $1,040 a month?
I don’t think so.
This amount was set in the 1980s and does go up. But it really wasn’t indexed much for inflation
Extra Benefits of Applying for SSI Benefits
Despite its shortcomings, this is income your child may be entitled to. Even if you’re in a position to support your child now financially, and $1000 doesn’t sound like a lot based on your means, it’s important to consider the future. This is income your adult child should start getting now, and they have access to it after you’re gone.
Plus, Supplemental Security Income entitles your child automatically to other useful benefits:
- Medicare
- Medi-Cal
Social Security Disability Income (SSDI) Vs SSI
So, is Supplemental Security Income the same as social security?
These are not the same things. SSDI is an income replacement for someone who worked for a while and then became disabled. While they worked, they paid social security taxes which they’re then getting back as an income stream.
Another way to qualify for SSDI is by becoming disabled before 22, but after their parent has retired. The program recognizes that in this instance, they may not have had the opportunity to pay much social security tax—especially if they went to college. In these instances, they receive an amount equivalent to 1/2 of your parent’s Social Security retirement payment.
On the other hand, those who qualify for SSI may have never worked or paid into the system. And your child may be eligible for both. SSI “supplements” other income. That other income could be SSDI.
Who Qualifies for Supplemental Security Income SSI?
SSI is for an individual with a disability. SSI is intended to pay for the bare essentials. That’s food and housing. And it’s expected that the child has the means to pay for other things.
That’s why it’s supplemental.
It’s important to realize that if someone else is paying for food and shelter, the program will deduct an amount from the total payment. This is 1/3 of the Federal Benefit amount, or usually around $250-275. So, this money must be used for food and shelter to preserve the full benefit.
In addition to having a disability, your child can have no more than $2000 in countable assets. However, many assets and sources of money are excluded, such as:
- Their home they live in of any value
- A practical vehicle
- Life insurance policy with a face value of up to $1500
Preserving Benefits
The countable assets qualifications can make it hard for a disabled child to navigate the system—especially after you’re gone. If you leave them an inheritance then Poof! They have more than $2000 in countable assets and no longer qualify. But you can take some steps to keep this from happening. And this is perfectly legal.
For starters, you can set up a 3rd party Special Needs Trust. This is one important way parents (or anyone other than the disabled adult, which makes it 3rd party) can make sure their child doesn’t exceed the countable benefits limit or otherwise disqualify themselves for SSI.
You’ll need to be careful to set up the trust so that it only pays for things that SSI, Medicare, and Medi-Cal don’t. The trust can ensure your child has spending money, but that it doesn’t exceed countable assets.
Another strategy that works along with the Special Needs Trust is an ABLE Account.
For a disabled child who can manage their own money, an ABLE account allows them to have more than $2000 in countable assets without hurting their benefit.
As long as they follow the program’s rules, they can have up to $100,000 in an ABLE Account, funded with up to $16,000 per year. Your child can put their own earnings in the account, and you can also fund the ABLE account. And if the ABLE account pays for food or shelter, it won’t lower your child’s SSI benefits.
In the video, I go into more detail on SSI qualifications, guidelines and preserving benefits for your child. So if you’d like to learn more, check out my SSI 101 video.