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Posted by Tiffany Gaskin

How Does Supplemental Security Income Work & What is it?

How Does Supplemental Security Income Work  & What is it?

Supplemental Security Income (SSI) is the flagship federal safety net program for the blind, elderly, and disabled. It offers them a guaranteed minimum income.

For 2022, the maximum federal SSI benefit was $841 per month for an individual and $1,261 per month for a couple. (Amounts generally increase each January 1.) These amounts are topped up in most states.

How do I qualify for the SSI?

Most people who qualify for Medicaid or food stamps will also qualify for SSI. To benefit from the SSI, you must have "limited resources." Features included in SSI limits:

  • Cash (no more than $2,000 for an individual or $3,000 for a couple) 

  • Bank account

  • Stocks, mutual funds, savings bonds

  • Land

  • Vehicles

  • Personal property

  • Life insurance, eg.

  • Any other item in your possession that can be converted into money or used as food/shelter.

When Social Security decides whether a claimant is eligible for benefits, it does not consider home, car, or personal effects (such as wedding bands or engagement rings). 

How much does SSI pay?

The monthly SSI payment amount is based on the Federal Benefit Rate (FBR). For 2022, the FBR is $841 per month for individuals and $1,261 for couples. These amounts increase to $914 and $1,371 in 2023. (The RBF increases each year if there is a Social Security cost of living adjustment).

The FBR is the maximum federal monthly payment for SSI. The income you receive for the month, minus certain exclusions, can be deducted from your monthly federal SSI payment. Additionally, government money can be added to the federal payroll each month.


State Surcharges

Most states add a state surtax, an additional payment that is added to your federal benefit payment. All states except Arizona, North Dakota, and West Virginia add money to the federal SSI payment for at least some types of recipients. The amount of state surcharges varies from state to state, from $10 to $400, and also depends on your marital status (single or married) and whether you are living in a nursing home, assisted living facility, on your own, or with others.


Exclusion of Earned Income

If you earn income, you can deduct a certain amount of income before it is deducted from your SSI payment. You can deduct $65 from your earned income, plus an additional $20 from your earned or unearned income, then deduct half of the rest - this is how much you can deduct from your income. Only the remainder of your income will be deducted from your SSI payment. Social Security does not guarantee a minimum SSI payment amount, so if your income exceeds a certain amount, your SSI payment may be waived.

Social Security deducts this amount from your RBF ($841 in 2022), which will leave you with a monthly SSI benefit of $0 if you receive alimony or assistance in kind. For instance, if you earn $1,767 monthly, Social Security will deduct the first $65 plus an additional $20; that would leave $1,682. Social Security will then wipe out half of the remaining earnings, leaving $841.

In-kind support and maintenance

If you receive supplemental security income benefits and someone provides you with housing and/or food that you don't pay for, the SSA (Social Security Administration) will consider their income and deduct them from your SSI payment. In other words, the Social Security Administration reduces your monthly supplemental security income payment to account for this In-Kind Support and Maintenance (ISM) because the SSA believes that you don't have to pay the full SSI because you have a room or a free pension.


Annual increases and cost of living adjustment

SSI payments usually (but not always) increase each year based on cost-of-living adjustments. The purpose of the cost of living adjustment is to ensure that your SSI payments keep up with rising inflation. Over the past 12 years, the cost-of-living adjustment has averaged 1.4%, but in January 2023, Social Security experienced its largest cost-of-living adjustment in decades: 8.7%, increasing monthly FBR from $841 to $914.

Current Benefits of SSI and SSDI

For claimants receiving a low SSDI payment, Supplemental Security Income does exactly what the name suggests. It supplements. For example, suppose an approved disabled claimant receives $400 in monthly SSDI benefits. In that case, an SSI allowance can be used to ensure that the claimant's total monthly benefit equals the federal SSI amount, which is currently $841 monthly. The SSDI recipient would receive an additional $441 in SSI to bring their total monthly benefit to $841, an amount equal to the total monthly SSI benefit amount in 2022.

Of course, this scenario will not occur in all of these cases. Because supplemental security income has resource (asset) limits (an individual cannot have more than $2,000 in available assets), many SSDI applicants will not be eligible to receive supplemental security income, no matter how weak the advantage of their SSDI.

How to apply for SSI

Previously, Social Security did not allow applicants to apply for SSI online, but now SSI applicants can apply online if:

  • have reached the age of 18

  • You have not been denied disability benefits in the last 60 days

  • Do not have social security benefits on file.

But once SSI applicants submit basic information online, Social Security will contact them to schedule a time to complete the process.

Applicants can also contact Social Security to complete the application over the phone or schedule an in-person interview at a local Social Security office. 



Tiffany Gaskin
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