Supplemental Security Income (SSI) is a federal program that helps people with disabilities and very low incomes pay for food and shelter. SSI is often confused with Social Security Disability Insurance (SSDI). One of the main differences between the two programs is that SSDI is available to people with disabilities no matter how much money they earn or have, while SSI places very strict limits on a recipient's income and assets. However, in most states, an SSI beneficiary also qualifies for Medicaid health coverage, which can be an extremely valuable benefit.
Once an SSI applicant has shown that she is disabled, she must also prove that she meets the program’s rules for income and assets. As far as assets are concerned, to be eligible for SSI, an applicant can have no more than $2,000 in assets ($3,000 for a couple), a figure that has not changed since 1989. If the applicant can use or liquidate an asset to pay for food or shelter, the asset will probably count as a “resource” against this limit. A resource would include any funds held in the applicant's bank accounts, retirement accounts, or in cash. The $2,000 resource limit does not disappear once a person qualifies for SSI. If an SSI beneficiary ends a month with more than $2,000 in her name, she will lose her benefits in the following month.
However, not all assets count towards the $2,000 resource limit. The major exclusions are:
- The SSI claimant’s home (the principal place of residence), no limit on value
- One automobile, no limit on value
- Household goods (furniture, etc.), no limit on value
- Personal effects (jewelry, art work, etc.), no limit on value as long as the SSI claimant is actually using the items.
- Up to $100,000 in an ABLE account
- Assets in a special needs trust, no limit on amount
The Social Security Administration currently lists 44 resource exclusions in all. Your special needs planner can advise you on which assets you own may be excluded from counting towards the $2,000 limit. The planner can also discuss with you setting up a special needs trust to protect an SSI beneficiary's assets while allowing her to maintain SSI eligibility. To learn more, talk to your planner today.