The Social Security Administration (SSA) will decrease the amount of your Supplemental Security Income (SSI) benefit by one-third if it is determined that you are receiving “in-kind support” from your parents or a friend or relative. If you live in the home of another individual and s/he does not charge you for the cost of room and board, then SSA assumes that s/he is making a voluntary contribution toward your support. Regardless of the actual dollar value of this “in-kind support,” SSA regulations “deem” the value of the support to be equal to one-third of your SSI benefit and will reduce your benefit by that amount.
In order to avoid losing one-third of your SSI check, you must be able to show that you are either paying rent or contributing your “fair share” of the cost to maintain your household. To determine whether you are paying your fair share, SSI officials will require you to itemize your household’s expenses and divide those expenses by the number of people living in the home. Household expenses include total monthly expenditures for: food, rent, mortgage, property taxes, heating fuel, gas, electricity, water, sewage, and garbage collection. If the amount of expenses divided by the number of people in the home is less than $771, SSA will allow you to keep your whole SSI benefit. If the amount is greater than $771, (even if only by a few dollars), SSA will deem this excess amount as a voluntary contribution toward your support and will reduce the SSI benefit by one-third.
Paying rent to a parent, friend or relative will avoid the one-third reduction in value of the benefits. However, if rent is paid to the parents, this could jeopardize their ability to claim the SSI recipient as a dependent for purposes of the IRS. To claim a child as a dependent, the parent must provide more than 50 percent of the child’s support. Where the child is paying rent, the parent may find it harder to demonstrate that s/he is providing at least 50 percent of the dependent’s support, and therefore harder to qualify for the deduction.