Frequently Asked Questions From a Planner’s Perspective
When my clients consider SSI, they often have “what if” questions that go beyond the basics. Here are some of the most common strategic questions I answer.
What happens if I receive a small inheritance? Will I lose my SSI forever?
No, not forever, but you must act quickly and strategically. You are required to report any change in income or resources to the SSA within 10 days of the month after you receive it. That inheritance will count as a resource. If it puts you over the limit, you will be ineligible for SSI for the months you are over the limit. The key is to use the “spend down” strategy we discussed. Spend the excess funds on exempt items before the first of the next month to regain eligibility as soon as possible.
Can my spouse’s income or assets affect my SSI eligibility?
Absolutely. This is a critical point. If you are married and living with your spouse, the SSA will look at both of your resources and income through a process called “deeming.” They essentially consider a portion of your spouse’s resources and income to be available to you, even if they are not applying for SSI themselves. The resource limit for a couple is higher ($3,000), but this rule means a spouse with significant assets or a good pension can easily make you ineligible.
Is it better to have a low Social Security benefit and get SSI, or a slightly higher one and not qualify?
This is a fantastic strategic question. In almost every case, it is better to have the combined, higher income from both sources. But the most important factor is often the automatic Medicaid eligibility that comes with SSI. A slightly higher Social Security check might give you a few extra dollars a month, but it pales in comparison to the financial protection Medicaid provides against massive long-term care costs. You must weigh the small increase in monthly cash against the priceless value of that healthcare safety net.
How does working a part-time job affect my SSI payments?
The SSA wants to encourage work, so the rules for earned income are more generous than for unearned income. They will not count the first $65 of your monthly earnings, plus they will only count half of the rest. For example, if you earn $265 a month, they would subtract $65, leaving $200. Then they would count only half of that, which is $100. Your SSI check would only be reduced by $100, even though you earned $265. This allows you to significantly increase your total monthly income by working.
Does my SSI benefit get a cost-of-living adjustment (COLA) like Social Security?
Yes, it does. The annual COLA that you hear about for Social Security, which is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), also applies to the SSI Federal Benefit Rate. This means that each year, the maximum possible SSI payment typically increases to help your benefits keep pace with inflation. For tax implications, refer to the Internal Revenue Service (IRS). Consumer rights information is available from the CFPB.
Disclaimer: This article provides expert perspective for educational purposes only and does not constitute financial, legal, or tax advice. A financial professional can help you apply these concepts to your personal situation. Always consult official sources for rule changes.
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