“Thought for the Day” #794 – by Stephen R. Elville, J.D., LL.M.

August 31, 2016

Supplemental Security Income (SSI) is a federal program that provides cash assistance to people with disabilities who have very limited incomes and resources.  In most cases, SSI recipients may also obtain a much more important benefit — automatic Medicaid eligibility.  Because access to SSI depends on a beneficiary’s income and resources, even small increases in income can cause a reduction or loss of SSI benefits.  Unfortunately, when an SSI beneficiary’s parent is ordered to pay child support, those payments can end up ruining the beneficiary’s access to government benefits.  Child support payments are a problem for SSI recipients because the Social Security Administration (SSA) treats a substantial portion of a child support payment as unearned income for purposes of calculating SSI benefits.  Receipt of unearned income results in a dollar-for-dollar reduction in an SSI benefit.  For instance, an SSI beneficiary who receives $200 in unearned income has his or her SSI benefit reduced by $200 in the month that the income is received.  If the amount of unearned income is greater than the entire SSI benefit (for example, when someone has a $500 monthly SSI benefit and she receives $600 in unearned income), the beneficiary loses SSI, and, potentially, Medicaid. Fortunately, the SSA does not always count an entire child support payment as unearned income.  If a child support recipient is younger than 18 (or 22, if he or she is still in school), and if the recipient receives the payment from an absent parent (defined as a parent who does not live in the same household as the child), then the SSA considers only two-thirds of the payment as unearned income.  However, this is small consolation for an SSI beneficiary who has their assistance reduced or terminated despite the one-third break.  In tomorrow’s blog we will discuss some ways of dealing with this problem.