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 towards 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 $735, SSA will
allow you to keep your whole SSI benefit. If the amount is greater
than $735, (even if only by a few dollars), SSA will deem this
excess amount as a voluntary contribution towards 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.
Example:
If the SSI recipient is determined to receive In-Kind Support (that
is, the SSI recipient receives free food and/or shelter), s/he will
receive only two-thirds of the SSI benefit amount, which is $490.
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