The term “disability benefits” can refer to several different sources of income for someone who becomes disabled. The benefits could be payments from a private long term care or disability insurance policy or come in the form of Social Security Disability Insurance (“SSDI”). Private policies cover either long-term or short-term disabilities, ensuring a source of income for policyholders who can’t work due to sickness or injury.
This article focuses on Supplemental Security Income (“SSI”) in Florida and we will dive into this area. However, it is important to first distinguish other types of disability assistance.
SSDI vs. SSI
SSDI is a disability insurance program run by the federal government and, like Social Security retirement benefits and Medicare, funded by FICA employment taxes. Only individuals who have worked five of the past ten years, paid FICA taxes, and are unable to work in any capacity are eligible for SSDI.
But when most people refer to disability benefits, they are talking about another federal program for disabled persons, Supplemental Security Income (“SSI”), which is the subject of this article.
THE FLORIDA GUIDE TO SUPPLEMENTAL SECURITY INCOME (“SSI”)
WHAT IS SSI?
Supplemental Security Income (“SSI”) is a federal program designed to aid elderly, blind, or disabled Americans of limited means. Qualified beneficiaries receive monthly cash payments intended to replace income that cannot be earned due to age, disability, or blindness. Like SSDI, SSI is administered by the Social Security Administration (“SSA”). However, unlike SSDI, it is funded through general tax revenue rather than through FICA taxes, and there is therefore no work requirement for SSI.
SSI was created in 1974 because Congress wanted nationally standardized eligibility requirements and benefit levels for disability assistance. Prior to the program, disability programs (other than SSDI) were run by the states, and coverage varied considerably. Since the implementation of SSI, state governments still play a role, though, particularly in determining whether applicants have a qualifying disability. In Florida, disability examinations are conducted by the Division of Disability Determinations within the Department of Health.
As of August, 2018, the SSA reports that there are over 8 million recipients of SSI nationally, including nearly 600,000 Floridians, receiving just shy of $60 billion per year in aggregate payments.
WHO IS ELIGIBLE FOR SSI?
To qualify for assistance, an SSI applicant must meet three basic criteria: (1) he or she must be age 65 or older, blind, or disabled; (2) must have a monthly income below a certain threshold; and (3) must have sufficiently limited total assets. Determining whether an applicant is at least 65 years old or blind is fairly straight-forward. An applicant is blind if he or she has a vision rating of 20/200 or less in the better eye using corrective lenses.
Deciding whether an applicant is officially disabled can be a little more complicated. According to the SSA, an individual is disabled for SSI purposes if unable “to engage in any [substantial gainful activity] by reason of any medically determinable physical or mental impairment which can be expected to result in death, or has lasted or can be expected to last for a continuous period of not less than twelve months.” Stated otherwise, the individual has a medical condition (either physical or mental) which prevents him or her from working and which is likely to either lead to death or to persist for at least a year.
Importantly, an impairment must not only prevent the applicant from doing the types of work he or she has done in the past, it must completely prevent any gainful employment “which exists in the national economy,” considering the applicant’s age, education, and work experience. Employment “exists in the national economy” if it is readily available in the region in which the applicant lives or in several regions throughout the country.
SSI is only available to applicants who legally reside within the United States, except that children of armed servicemembers stationed overseas and, in limited circumstances, students studying abroad may be eligible. To receive SSI, non-citizen residents must fall within one of the categories of “qualified aliens,” as determined by the Department of Homeland Security.
WHAT IS THE INCOME LIMIT FOR SSI?
SSI is a “means-tested” program that is similar to Medicaid in Florida, so an applicant’s income must be below a certain threshold to be eligible. The level is based on the “federal benefit rate” (FBR), though it can be increased in states that provide a supplement. In Florida, the 2018 limit is $750 per month for individuals and $1,125 per month for couples. If an applicant lives with a spouse who does not qualify for SSI, the spouse’s income counts toward the applicant’s income, but the income cut-off is increased to the $1,125 rate for couples.
“Income” is defined much more broadly than just wages earned. It includes other Social Security, unemployment, and veterans’ benefits, alimony, pensions, and most other regularly recurring payments. Additionally, “in-kind income,” which means payments made on the applicant’s behalf for necessities like food or rent, counts as income. However, SNAP benefits are not included.
When making the calculation, the SSA excludes from the applicant’s income the first $20 of all income from any source and the first $65 of wages. After the first $65, half of all wages earned are excluded from the applicant’s income. If the resulting “countable income” is above the limit, the applicant is ineligible.
WHAT IS THE SSI ASSET TEST?
The SSI program also excludes applicants with assets over a maximum cumulative value in the same way that Medicaid programs limit countable assets. For an unmarried applicant, the asset maximum is $2,000. For a married applicant, the maximum is $3,000, including both the applicant’s and the spouse’s assets. The $3,000 maximum applies regardless of whether the spouse is or is not eligible for SSI.
Countable assets for SSI include cash, funds on deposit with a bank or credit union, any real estate other than a primary residence, and other financial resources like stocks or bond. A primary residence and one vehicle are not counted except to the extent the vehicle’s value exceeds $4,500. Wedding rings, funds held in an ABLE savings account up to $100,000, and assets held for the applicant’s benefit within a special needs trust are also not counted.
WHAT BENEFITS TO SSI RECIPIENTS RECEIVE?
SSI beneficiaries receive payments from the SSA on the first day of each month unless the first day is a weekend or holiday, in which case the payment is made on the next workday. As of 2018, the Federal Benefit Rate is $750 for individuals and $1,125 for couples, with any countable income excluded from the final payment amount. In 2017, the average payment for SSI recipients in Florida was about $560.00.
By way of example, let’s say a single beneficiary earns $500 in wages in a given month. The first $20 is deducted under the general exclusion, and the next $65 after that is deducted under the earned income exclusion. Then, half of the $415 remaining is excluded, resulting in a total countable income of $207.50. Subtracting countable income from the $750 base payment amount, the beneficiary’s SSI benefit for that month would be $542.50.
Most states supplement SSI payments with state funds, though states vary as to how the supplemental payments are administered. Florida offers supplemental payments to beneficiaries residing in a family care or assisted living home, or living in a residence for which Medicaid pays at least half of the costs.
Because eligibility for the two programs is linked, an SSI beneficiary automatically qualifies for Medicaid. Additionally, SSI recipients are almost always eligible for food assistance as well, though the application process is separate.
Florida residents can apply for SSI by submitting an application to one of the many Florida field offices – either in person or over the phone – or can apply online. Prior to receiving SSI, applicants must request any other available assistance programs, such as unemployment or SSDI. For individuals requesting SSI based upon a disability, the application is reviewed by a disability examiner with the Florida Division of Disability Determinations, and then returned to the SSA for the final technical determination of eligibility.
According to the SSA, the SSI program receives nearly three million applications per year nationally. Of those, around 25 percent are initially approved, and another 13 percent are approved following a hearing or on appeal.
The SSI application process can get complicated, particularly when hearings and appeals are necessary. An attorney with experience representing SSI applicants can help to navigate through the bureaucracy and improve the overall chance of a favorable outcome.
Also, this is a major area for estate planning in Florida and most other states because an outright inheritance jeopardizes SSI and Medicaid benefits. Consequently, tools such as a special needs trust in Florida and other states offer a solution to provide resources for SSI beneficiaries AND avoid disqualification.
Steve Gibbs, Esq.