It can be very difficult to get by on the small amount of Supplemental Security Income (SSI) pays. Many individuals get extra support or are forced to borrow money from friends or family just to make ends meet. But, can this negatively affect SSI eligibility?
The rule of thumb for Supplemental Security Income (SSI) is any money you receive may reduce your SSI benefits.
The reason is SSI is a needs based program designed to keep you from falling below a certain level. However, if you are receiving money from another source, your SSI benefits may be reduced.
Note: this is changing with the ABLE Act which allows giving money to a person on SSI. However, there are a number of requirements and conditions that apply.
Borrowing money, on the other hand, might not affect SSI eligibility. According to Social Security regulations, a loan is not considered income:
(f) Proceeds of a loan. Money you borrow or money you receive as repayment of a loan is not income. However, interest you receive on money you have lent is income. Buying on credit is treated as though you were borrowing money and what you purchase this way is not income.
However, it has to be clear and provable to Social Security that the money was aloan and not a gift. SSI is a “needs based” program. If a friend of family member is providing money, food, clothing or shelter, the SSI benefits may be reduced or stopped altogether. The same goes for someone paying your bills for you.
I have had a number of cases where a client lives with family while the SSI cases is winding its way through the SSA system. If the claimant is expected to pay back the cost of rent or utilities, I encourage using a written agreement (it does not have to be formal) stating what the claimant will pay for, and an itemization of the expenses.
Keep in mind that this is not fool-proof! However, it can help show Social Security that the money or other assistance was a loan and not a gift.
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