By Rob Wrubel, CFP®
I said it before and I’ll say it again as I am still in shock. The Federal government made something easier and better for families with special-needs members. New rules for Supplemental Security Income (SSI) went into effect to help people with qualifying disabilities keep their monthly SSI checks. It’s great news.
The huge change is how food and shelter are considered when calculating In-Kind Support and Maintenance (ISM). Individuals with a qualifying disability receive up to $943 per month (the Federal maximum for 2024) in payments to their rep payee accounts. That amount can be reduced for different reasons and one common one is ISM.
The amount of reduction can be close to one-third (with some interesting math applied to get there).
Until now, paying for groceries and food for a person receiving SSI was considered ISM and those payments reduced the SSI payment. A person entitled to receive $943 got less if someone else contributed to rent or food.
Under the new rules, food is not an ISM item. Mom and Dad, caregiver or friend can now buy groceries and take a person with a disability out to lunch or dinner without having to be concerned that it might impact the monthly paycheck. That’s fantastic. It makes life easier and, more importantly, means that people who had to choose between food and SSI can now have both.
There appears to be one wrinkle to how easy this is. The language says food is considered if someone else pays for all, yes all, of the meals for the person receiving SSI. If the recipient pays for just one meal a month, that is not “all” according to several sources I’ve read.
One person I know has a son who lives at home and he receives SSI. Up until now, because Mom and Dad did not charge rent or for groceries the SSI payment was reduced by roughly one-third. Instead of getting $943 per month, the son receives closer to $625.
Other families charge for room and board and document those payments monthly. This means tracking receipts for grocery purchases and keeping records to show to the Social Security Administration if asked.
Rent is still considered an ISM item but the new rules make it much easier to charge rent and comply to prevent ISM being considered. There is now a Federal rent minimum to charge to avoid ISM instead of making a guess about how to charge a market rent and hope for SSA approval. That amount is $334.33 in 2024 and will index to inflation. This dollar amount is tied to the Presumed Maximum Value (PMV). if you’re asked or questioned by someone at the SSA let them know the rules changed and, that as long as rent is above the PMV, there is no ISM for housing above that. So, charge $334.33 (I’d round up to keep it simple) a month or more and keep raising it every year.
You might want to charge more. One challenge some families have is how to spend SSI funds to keep the resource level below $2,000. Charging higher rent allows you to move money from the representative payee account to your account where it won’t be counted as a resource. Or you can move funds to an ABLE to keep them in the name of your family member with a disability. There are a few techniques to consider to protect benefits and you can find some in other articles at www.robwrubel.com.
Good news this month from the Feds that makes it easier for families to care for their family members with disabilities. Let’s hope for more soon.
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This article is not intended as investment advice or representative of any specific investment strategy. Consult with your legal, tax, benefits and investment team before taking any action.
