SSI Non-Work Related Overpayments. Lawyer Manual

SSI Non-Work Related Overpayments

Since SSI is based not only on disability but on income and resources as well, SSA has fairly strict rules regarding the amount of income and resources that keep someone eligible for benefits. Unlike SSDI, income from any source and the amount of resources can potentially impact the amount of an SSI payment. SSI checks can be reduced if certain assistance is given by others. And, SSI can be reduced by counting the income of certain other individuals. The rules for how the SSI check is determined are complex, making it easy for individuals to inadvertently receive an overpayment of benefits due to non-work related reasons.

SSI Resource Limits

Individuals receiving SSI cannot have countable resources that exceed $2000 or $3000 for a couple. An SSI recipient is not entitled to receive a check in any month in which resources exceed these amounts. Common resource overpayments include situations where a bank account, savings bonds or stocks exceed the resource limit. Because tracking and calculating the value of a resource can be complicated, advocates assisting somebody with a resource overpayment should check to make sure that resource values were calculated correctly.

When an SSI recipient exceeds the resource limit, benefits are suspended. If the resources are spent or converted to an excluded resource within 12 months so that the SSI recipient’s countable assets no longer exceed the limit, benefits can begin again without a new application. POMS SI 02301.201. Many times, a beneficiary is advised to spend down a resource or convert it to an excluded resource so that benefits can resume. Resources are counted as of the first moment of the calendar month. POMS SI 01110.600.

Not all resources count toward the limit. Common examples of exempt assets include the house in which a person resides, one car, and retroactive SSA benefits. Some resources are always excluded and others are only excluded for a set period of time. POMS SI 02301.201. It is not uncommon for an SSI recipient to commingle excluded and countable resources. For example, part of the value of a bank account could be attributable to monies received under the Earned Income Tax Credit. Finding that SSA is not counting something that should be excluded could result in a decrease of an overpayment.

Earned vs. Unearned Income

SSI program rules divide income into earned and unearned categories. SSA treats the two types of income differently for purposes of determining SSI eligibility. The SSI program rules broadly define income as, "...anything you receive in cash or in kind that you can use to meet your needs for food and shelter. Sometimes income includes more or less than you actually receive. (see 416.1110 and 416.1123(b)). In-kind income is not cash but is actually food or shelter, or something a person can use to get one of these. 20 C.F.R. 416.1102.

Unearned income is all other income that is not earned, including annuities and pensions, alimony and support payments, dividends, and rents. § 416.1120, 416.1121. SSA provides an extensive list of what it does not count as income. 20 C.F.R. 416.1103 (What is not income?); 416.1112 (Earned income we do not count.); 416.1124 (Unearned income we do not count.)

SSA sets upper limits on both earned and unearned income for SSI beneficiaries. If an SSI beneficiary earns at or over the limits, then they are ineligible for benefits for that month. If the person has income, but it is less than the limits, the person’s SSI benefits are reduced accordingly by SSA using a standard formula. See POMS SI 00810.350.

For each month, SSI beneficiaries are required to report any income they have to SSA. SSA and the beneficiary themselves will often miss some source of earned or unearned income until much later and will wind up in an overpayment situation.

Counting Unearned Income

SSA considers all income that is received to be unearned if it was not received as earnings from work activities. 20 C.F.R. 416.1120. SSI overpayments often occur when someone receives unearned income that is not reported to SSA and SSA learns of the unearned income in months after the receipt of such income. SSA allows a recipient to keep the first $20 of unearned income and counts the rest against the SSI check. This $20 is called the “General Income Exclusion.”
For example, if a person receiving SSI were to receive $200 per month in alimony, the new SSI check would be calculated as follows:

     $200 (Unearned Income) minus $20 (General Income Exclusion) = $180 in countable income

          $733 (Federal Benefit Rate in 2015) minus $180 = $553 SSI Check.

20 C.F.R. 416.1121 provides the following examples of unearned income (which is counted against a beneficiary's SSI payment):

1. Annuities, pensions, and other periodic payments. This unearned income is usually related to prior work or service. It includes, for example, private pensions, social security benefits, disability benefits, veterans benefits, worker's compensation, railroad retirement annuities, and unemployment insurance benefits.
2. Alimony and child support payments.
3. Dividends, interest, and certain royalties.
4. Rents.
5. Death benefits.
6. Prizes and awards. A prize is something won in a contest, lottery or game of chance. An award is usually something received as the result of a decision by a court, board of arbitration, or the like.
7. Gifts and inheritances. A gift is something received which is not repayment for goods or services provided and was not given because of a legal obligation on the giver's part. An inheritance can be in cash or in-kind, including any right in real or personal property.
8. Support and maintenance in kind. This is food or shelter furnished to a beneficiary. SSA's rules for valuing this income depend on the person's living arrangement. SSA applies one rule to SSI beneficiaries living in the household of a person who provides them with both food and shelter. SSA applies a different rule for other situations where an SSI beneficiary receives food or shelter.

Counting In-Kind Support

If an SSI beneficiary receives food or shelter from another individual (not federally subsidized housing or food stamp benefits), this is called in-kind support and maintenance and will result in a reduction to the SSI check. An overpayment can occur when SSA discovers after the fact that somebody has been receiving such assistance.
In some circumstances, SSA will reduce a recipients SSI benefits by one-third of the Federal Benefit. 20 C.F.R. 416.1131. For example, based on the SSI benefit amount of $733 (for 2015), a person on SSI who lives in another person’s household would, assuming no other deductions, received $488.00, reflecting the one-third deduction of $245.00. For more recent updates, please see the SSA website.

SSA's basic rule is the one-third reduction will be applied to an SSI beneficiary's monthly benefits if the person (including their eligible spouse):

1. Live in another person's household for a full calendar month except for temporary absences, and
2. Receive both food and shelter from the person in whose household they are living.
    

Often, SSA will retroactively find that an SSI recipient has been living in the household of another or receiving food and shelter or live in the household of another. There are some living situations that do not qualify for the one-third reduction. 20 C.F.R. 416.1132 discusses what it means to live “in another person’s household,” and situations when the rule does not apply, including living in a commercial establishment (such as a hotel), or in the house of a spouse or parent.

If an SSI recipient is receiving food or shelter from another but does not meet both of the requirements above (live in another person’s household and receive both food and shelter), SSA will then deduct the actual value of the food or shelter. This is called the Presumed Maximum Value Rule. Under this Rule, SSA cannot deduct more than 1/3 plus $20. POMS SI 00835.300.
 

Deeming Income or Resources

Deeming of income refers to the practice of considering the income of another person to be the beneficiary’s own. 20 C.F.R. § 416.1160. Perhaps the two most relevant deeming cases are for spouses and children.

SSA will deem income as available to an SSI claimant/recipient if they are married and living in the same household as their spouse. 20 C.F.R. 416.1161; 416.1802(a). Not all types of income are deemed, but a spouse’s earned income (wages, salary, self-employment income) are counted. See 20 C.F.R. 416.1161(a). This test turns on showing two factors: that the person seeking SSI is married to a person with income and the spouse seeking SSI is living in the same household as their spouse. If either factor is absent, then income cannot be deemed between couples.

SSA looks at marital status as of the first day of the month. If someone is married on the first day of a month, SSA will consider the person married through the end of the month even if the couple separates. Conversely, if someone is not married on the first day of the month, the person will not be considered married through the end of the month even if that person marries during the month. § 416.1802(d)(1).

SSA looks to laws of the state where the individual lives with their spouse for purposes of determining whether there is a valid marriage. § 416.1806(a). However, SSA will also consider a recipient to be married if that person and an unrelated person of the opposite sex are living together in the same household at or after the date of the SSI application and they both lead people to believe that they are husband and wife. § 416.1806(a)(3).
SSA will deem income as available to a child SSI beneficiary if the child is under the age of 18 and living with the parent with the income. § 416.1161. Not all types of income are deemed, but a parent's and spouse's wages are counted. See § 416.1161. Child support income is only counted for two-thirds of its value when determining SSI eligibility. 20 C.F.R. §1124(c)(11). In addition, if an applicant/recipient is under the age of 22, a student regularly attending school or college or training that is designed to prepare for employment, not married, and not the head of a household, SSA will not count some of the child’s earned income if he or she is working. § 416.1851(a).
 

SSI will also deem the resources. POMS SI 01330.001. For example, if the spouse of an SSI recipient has a bank account with $3500 in it, that bank account will make the SSI recipient ineligible to receive an SSI check. Resource deeming is complicated, and an advocate should consult the POMS for more specific information on how to count resources in an individual case.