Author: Health and Disability Advocates
Last updated: August 2010

SSI/SSDI Overpayment

A common scenario that may result in an overpayment is when the beneficiary has returned to work. In order to advocate on behalf of a client appealing a work-related overpayment, it is important to understand SSA's administrative appeal process, SSA's rules for calculating income for SSDI and SSI beneficiaries, and arguments for how SSA's calculation of your client's income and the resulting overpayment are incorrect.

Filing an Appeal

SSA's Appeal Process
Request for Reconsideration
Steps for Requesting Reconsideration
Options for Late Appeals

Disputing an Overpayment

SSDI Work-Related Overpayments
SSI Non-Work Related Overpayments
SSI Work Related Overpayments
 

SSA's Appeal Process

Overpayments may be appealed using the Social Security administrative appeal process. 20 C.F.R. §§ 404.902(j ), (k) and 404.905; 416.1402(c) and 416.1405.

Appeal Deadlines

Appeal deadlines are short--appeals of adverse decisions must be filed within 60 days of the date that the claimant receives the decision. SSA assumes that a claimant receives the decision within five days after the date that the SSA decision is dated. Thus, SSA will consider an appeal to be filed timely if it is filed within 65 days of the date on the SSA decision that denied benefits.
 

What to Appeal

The administrative appeal process applies to most determinations, e.g. decisions about disability, benefit amounts, overpayments, etc. 20 C.F.R. §§ 404.900 (SSDI) and 416.1400 (SSI).

Levels of Appeal 

When advocating on behalf of your client, it is important to know the different levels of SSA's administrative appeal process, how and when to file an appeal, the decision-maker, the standard of review, and if new evidence will be accepted.
SSA's administrative appeal process includes three levels of review: Reconsideration, Administrative Law Judge Hearing; and Appeals Council. The decision of the Appeals Council is considered SSA's final administrative decision. Once the claimant exhausts SSA's administrative appeal process, the claimant may seek review by filing a complaint in federal district court. 42 U.S.C. §§ 405(g), 1383(c)(3).

 

Request for Reconsideration 

Reconsideration is the first level of review in SSA's administrative appeal process. 20 C.F.R. §§ 404.907; 416.1407.

Filing Deadline

A claimant has 60 days from the date of decision to file a request for reconsideration. Because SSA gives time for mailing, it assumes that a decision is received by the claimant within 5 days of the date on the decision. As a result, a claimant actually has 65 days from the date on the decision to file a request for reconsideration. 20 C.F.R. §§ 404.909(a)(1) and 404.901; 416.1409 and 404.1401.

How to File Appeal

The Request for Reconsideration is filed at a Social Security Field Office. It can be mailed (use certified mail to have proof of receipt) or hand-delivered. While not required, it may be advisable to file the appeal at the Social Security Field Office that is closest to the client’s home. If you know your client’s zip code, you can find their Social Security Field Office locator.

Decision-making

Generally, staff at the Social Security Field Office make the decision on reconsideration requests involving overpayment appeals, requests for waiver, and requests to negotiate an overpayment amount. The standard of review is de novo. The claimant may submit additional evidence.

Steps for Requesting Reconsideration

Complete SSA's Form

When seeking reconsideration, the first thing to do is fill out the Request for Reconsideration form.
 

Requesting a Conference in SSI cases

The Request for Reconsideration form allows a request for either a formal or informal conference in SSI cases. POMS SI 04020.050 discusses the differences between an informal and formal conference. With an informal conference, an SSA official will conduct the proceeding and ultimately make the reconsidered determination. In addition to following case review procedures, a beneficiary may present witnesses. A summary record of the conference becomes part of the case record.

Advocates should ask for a conference when filing their client's Request for Reconsideration in an SSI overpayment case. As soon as the request is received the time, date, and place will be set. A notice is sent to the beneficiary, their representative, and all other involved parties at their last known addresses at least 10 days before the conference. In theory, the conference should be scheduled within 15 days after it is requested; in practice, it rarely happens this quickly. If needed, the conference may be delayed if it is necessary to ensure that it is conducted efficiently and properly. Conferences are typically conducted at an SSA office either by telephone or in person, but may be held elsewhere if reasonably necessary.

A formal conference follows most of the same rules of an informal conference with several additional options. In a formal conference the beneficiary may also ask SSA to subpoena documents and adverse witnesses who will be available for direct and cross-examination. Again, the summary record becomes part of the case record, and the official conducting the conference makes the decision on the reconsideration. The POMS also provides further information on how the conference should be conducted and how to request subpoenas in such cases. SI 04020.50.
 

Letter in Support

In addition to the Request for Reconsideration form, you should also write a letter to the local office detailing the following:

• The rationale for the appeal;
• The evidence that supports the appeal;
• The evidence that needs to be produced by the District Office; and
• A request, if desired, for an informal or formal conference.

Evidence for Work-Related Overpayments

Determining the accuracy of a work-related overpayment can be complex and time consuming. It normally involves a review of monthly pay stubs to determine actual monthly income as well as determinations of possible work-related deductions such as Subsidies or Impairment Related Work Expenses. In addition, it may involve contacting the beneficiary’s employee or employment service provider for information to determine the level of a subsidy or special condition. Given the short time frame for filing the Reconsideration, it is important to let the Social Security Administration know that you are gathering evidence to be submitted and request that no decision be made until that evidence is developed and submitted.

Submitting Your Paperwork

The form and letter, along with any evidence to be submitted, should be mailed to the District Office. Certified mail or Federal Express should be used to make sure there is proof that the documents were delivered in case SSA fails to process the reconsideration request. While not required, it is usually best to file with the SSA Field Office closest to the beneficiary's home. The SSA website has a list of the locations of Field Offices by zip code. Once the paperwork is sent, advocates need to follow up with the Field Office Attorney Liaison to ensure the paperwork was received and to attempt to schedule a conference.

Next Step if Denied at Reconsideration Level

If SSA denies reconsideration, the next step is to file a request for a hearing with an Administrative Law Judge (ALJ). If a request is filed, the case is transferred to the local Office of Disability Adjudication and Review (ODAR) for assignment to an ALJ for a hearing. More information about SSA's administrative appeals process is discussed in SSI and SSDI Overpayment: Overview.
 

Options for Late Appeals

What to Do if Your Client is Past the Appeal Deadline

Missing the 60-day appeals deadline does not necessarily end the case for the beneficiary. There are two options for getting the case back on track: 1) showing good cause for filing late; and 2) having the claim reopened.

Filing Late with Good Cause

SSA will accept a late filing of a Request for Reconsideration if good cause is shown. Requests for extension of time to file must be in writing, must give the reasons why the Request was not filed within the time limits, and be signed by the beneficiary. 20 C.F.R. §§ 404.909 (SSDI), 416.1409 (SSI); POMS GN 03101.020, GN 03102.150. For both SSI and SSDI beneficiaries, SSA will consider the following factors in deciding whether or not to accept the late filing:

• What circumstances kept the person from making the request on time;
• Whether SSA's actions misled them;
• Whether the person did not understand the requirements of the Act resulting from amendments to the Act, other legislation, or court decisions; and
• Whether the person has any physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) which prevented them from filing a timely request or from understanding or knowing about the need to file a timely request for review. C.F.R. §§ 404.911(a) (SSDI), 416.1411(a) (SSI).

Examples of circumstances where good cause may exist can be found at C.F.R. §§ 404.911(b) (SSDI), 416.1411(b) (SSI)

There is no time limit for showing good cause for a late filing. The application should be submitted to an SSA district office. The SSA website has a list of the locations of District Offices by zip code.

Requesting to Reopen a Claim

If your client has missed the appeal deadline for reconsideration, your other option is to request the reopening of the claim. You can request a reopening of a claim for any reason as long as the request is filed within 12 months of the initial determination. C.F.R. §§ 404.987,404.988 (SSDI); 416.1487, 416.1488 (SSI). Reopening is up to the discretion of SSA so, while not necessarily required, such requests are stronger if they include a basis with the request.

Reopening after 12 months

 

If more than 12 months has passed since the initial determination, the claim may be reopened if good cause is shown. For both SSI and SSDI beneficiaries, good cause may be shown if:

• New and material evidence is furnished, POMS GN 04010.030;
• A clerical error was made, POMS 04010.010; or
• The evidence that was considered in making the determination or decision clearly shows on its face that an error was made, POMS 04010.020.

SSA will not find good cause if the only reason given is a change of legal interpretation or administrative ruling upon which the determination or decision was made. 20 C.F.R. §§ 404.989, 416.1489; POMS GN 04010.001.

While the standards for applying for reopening are the same between SSI and SSDI, there are some differences in the time lines for applying between the programs. For SSI, reopening may be applied for:

• Within 12 months of the date of the notice of the initial determination, for any reason;
• Within two years of the date of the notice of the initial determination if SSA finds good cause, as defined in § 416.1489, to reopen the case; or
• At any time if it was obtained by fraud or similar fault. In determining such, SSA will take into account any physical, mental, educational, or linguistic limitations the person may have had at the time. § 416.1488.

For SSDI, reopening may be applied for:

• Within 12 months of the date of the notice of the initial determination, for any reason;
• Within four years of the date of the notice of the initial determination if SSA finds good cause, as defined in § 404.989, to reopen the case; or
• At any time [if for a number of reasons including] . . . (8) it is wholly or partially unfavorable to a party, but only to correct clerical error or an error that appears on the face of the evidence that was considered when the determination or decision was made . . . . 20 C.F.R. § 404.988; POMS GN 04001.010.

Choosing Between Reopening and Late Filing

Both requests for reopening and for showing good cause for late filing should be made in writing to a District Office and cite the controlling regulations and POMS sections. Choosing which method to use, however, may depend on the timing of your application. Consider the following time periods when deciding which to file:

• Within one year of the decision to be appealed: late filing is allowed only for good cause while reopening can be made for any reason. Thus, cite both if available, and if there is not good cause as defined, use reopening.
• Within two years (for SSI) and four years (for SSDI): reopening or late filing can be used based on the good cause reasons listed above.
• Beyond two years (for SSI) and four years (for SSDI): the only option is late filing. However, it is unlikely that a request for late filing would be successful unless it can be shown that the claimant never received notice of the overpayment and there was no other way that they would have or should have known, or it is shown that the person lacks the capacity to understand what the notices meant.

SSDI Work-Related Overpayments

Issues arising from a claimant returning to work are one of the main causes of SSDI overpayments. SSA's rules about returning to work can be very confusing to beneficiaries, and this can be compounded by bad tracking by both the claimant and by SSA. Whether a person receives SSI or SSDI, Social Security regulations require him or her to report any change of income within ten days of receiving it. For each month, SSDI beneficiaries are required to report any income they have to SSA. SSA, and the beneficiaries themselves, will often miss some source of earned or unearned income until much later, and will wind up in an overpayment situation. It is important for advocates to be familiar with SSA's terminology and how SSA counts income for SSDI beneficiaries in order to best help claimants facing an alleged overpayment.

SSDI's Work Incentives

Persons found eligible for SSDI benefits have medical impairments that prevent them from working. SSA has developed rules for dealing with SSDI recipients who return to work while receiving disability benefits. To avoid a system where claimants are punished for attempting to go back to work while on SSDI, while also encouraging them to gradually get back into the workforce, SSA created a series of work incentives. These incentives allow someone on SSDI to attempt to go back to work or to gradually increase their working hours without fear of losing their benefits.

Unearned Income

SSA defines unearned income simply as income that is not earned. 20 C.F.R. § 416.1120. This means any income that does not come from work activities.
Section 416.1121 provides the following examples of unearned income:

• Annuities, pensions, and other periodic payments
• Alimony and support payments
• Dividends, interest, and certain royalties
• Rents
• Death benefits
• Prizes and awards
• Gifts and Inheritances

For SSDI beneficiaries, receiving unearned income will not affect their monthly benefits. However, what will count against a SSDI beneficiary is the amount of wages earned from work. As a result, the more monthly income that can be classified as unearned income, the better off the SSDI recipient will be.

Wages from Work Activity

SSA uses the term “substantial gainful activity” or SGA to describe earned income including wages, salary, tips, self-employment. The general definition of SGA is work that “… (a) involves doing significant and productive physical or mental duties; and (b) is done (or intended) for pay or profit.” 20 C.F.R. 404.1510; 20 C.F.R. 404.1572. Wages are defined as payment paid to the beneficiary as an employee for doing a job. 20 C.F.R. § 404.1041.When an SSDI recipient is paid wages, SSA counts the entire amount earned, not the net amount. Certain items are deductible from a SSDI beneficiary's gross wages. SGA in 2010 and 2011 is $1000 for non-blind individuals and $1640 for blind individuals. Below is a chart of SGA over the last decade:

 

	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010/11
SGA non- blind	$700	$740	$780	$800	$810	$830	$860	$900	$940	$980	$1000
SGA blind	$1170	$1240	$1300	$1330	$1350	$1380	$1450	$1500	$1570	$1640	$1640
TWP	$200	$530	$560	$570	$580	$590	$620	$640	$670	$700	$720

Trial Work Period

One SSA work incentive is known as the Trial Work Period (TWP). Over a rolling 5-year (60-month) period, a SSDI beneficiary is entitled to receive a total of nine Trial Work months. A month of Trial Work is counted if the individual earns over more than the applicable TWP amount for the applicable year of the month in which work was done. The TWP amount in 2010 and 2011 is $720.00 ($700 in 2009); for more recent updates, please see the SSA website. The SSDI recipient is not required to use these nine TWP months consecutively. And, the 5 year period is rolling, which means that SSA goes back and looks for the first time there were 9 months of work (consecutive or non-consecutive) within any 5 year period. Once that period is found, the TWP ends with that 9th month. During the TWP period, the SSDI recipient is entitled to keep their entire SSDI check regardless of how much is earned. 20 C.F.R. §§ 404.1592, 404.1592a.

Grace Period

SSA provides that when an SSDI recipient has exhausted their Trial Work Period and then works and earns more than the SGA level in a month, a Grace Period of three months is triggered. The Grace Period lasts for three months; during the three-month Grace Period, the SSDI recipient receives regular monthly benefits. Because the Grace Period starts the first time a claimant earns more than SGA after the Trial Work Period, it can run concurrently with or after the Extended Period of Eligibility (explained below).  And, the Grace Period always lasts 3 consecutive months. Once the Grace Period is triggered, it runs three months even if the individual does not work above SGA in the second or third month of the Grace Period.

Extended Period of Eligibility

Once an SSDI recipient reaches the 9-month Trial Work Period limit, a 36-month Extended Period of Eligibility (EPE) is triggered. This 36-month period is triggered regardless of the person’s work activity on the first month after the Trial Work Period or thereafter. In all circumstances, an EPE starts the month following the last Trial Work Period month. It is therefore possible for an SSDI recipient to “use up” their EPE even if they stopped working after their 9th Trial Work Period month.

During the EPE, an individual is eligible to receive an SSDI benefit check for any month they earn less than the substantial gainful activity (SGA) level amount set for that year. In 2010 and 2011, SGA was $1000 a month for an individual, and $1640 a month for people who are blind; for more recent updates, please see the SSA website.

However, if the SSDI recipient earns more than the SGA level in a month, he or she is not eligible for the monthly SSDI check. §404.1592a(b). SSDI recipients can cycle on and off of monthly checks during the 36 month period; if the person works and makes more than the SGA level in a month, he or she is not entitled to a monthly check. If in the next month, the person does not work or does not earn more than the SGA level if working, he or she is entitled to a monthly SSDI check.

Finally, if the SSDI recipient earns more than SGA in the 36th month of the EPE or any month after the 36th month, SSDI eligibility ends (SSA uses the verb “terminated” to describe this action).

Keep in mind that the Grace Period will be triggered the first time that an SSDI recipient earns over SGA. This can occur during the EPE or after the EPE. If it happens during the EPE, the on and off cycle is suspended for those three months. If it happens after the EPE, the individual will receive 3 checks and then the checks will stop.

Expedited Reinstatement

Finally, if a person is eventually terminated from SSDI benefits due to their work activity, they may still be eligible for Expedited Reinstatement (EXR) for SSDI benefits if the work stops in certain circumstances. To be eligible for EXR, a person must meet the following criteria:

• Must reapply for SSDI benefits within 5 years of the month your SSDI was terminated due to work activity;
• SSDI benefits must have stopped due to work activity;
• The person must continue to meet the SSA definition of disability and not be earning over the SGA amount.

For Expedited Reinstatement, a decision on the claim is reached much faster than it would be otherwise by SSA, and the claimant is eligible for 6-months of provisional benefits while SSA's decision is pending. 20 C.F.R. §§ 404.1592b and 404.1592c

Income Counting Rules for SSDI

When counting income for SSDI beneficiaries, always start with gross income. While there may be later deductions, gross income is always the starting point rather than net income or “take-home pay”. For SSDI, wages are counted in the month they are earned, at the earlier of: when the individual receives them or when they are credited to the individual’s account. 20 C.F.R. § 416.1111. Allowable deductions are discussed below.

Allowable Deductions from Gross Wages

The expenses discussed below are not applicable wage deductions during a person’s Trial Work Period months. In other words, a beneficiary cannot use wage deductions to bring their monthly earned income below the Trial Work Period limit in order to have that month not count against them as a Trial Work Period month. These deductions are used in Substantial Gainful Activity determinations only and since the Trial Work Period is not such a determination, the deductions are irrelevant.

Impairment Related Work Expenses

Impairment Related Work Expenses (IRWEs) are expenses that are related to the primary disability or any secondary disability on record that are necessary for the SSDI recipient to go to work and stay on the job. IRWEs can include any number of out-of-pocket expenses, such as:
 

• Medical appointment payments
• Prescription co-payments
• Prosthetic devices
• Transportation costs
• Costs of adaptive devices for automobiles by persons who cannot drive an unmodified automobile

IRWEs can be deducted from a person's gross monthly earnings to reduce countable earnings below the SGA amount, after the Trial Work Period. This can be vital in keeping a beneficiary eligible for SSDI. Before an IRWE can be subtracted from countable earnings, SSA must approve the expense. All receipts for IRWEs should be kept for verification with SSA. See 20 C.F.R. § 404.1576.

Subsidy and Special Conditions

If an individual receives special conditions or support on the job that results in the person being paid more than the value of the work that is done, it is known as a "subsidy." Subsidies can come in the form of support provided by the employer (extra breaks, more time to finish work) or by someone other than the employer (paying for a job coach).

In any SGA determination the value of a subsidy is subtracted from countable income. For example, if a beneficiary is paid for doing in 20 hours what a non-disabled worker would do in 10 hours, the 10 hours times the person’s hourly wage would be considered a Subsidy and would be subtracted from earnings in an SGA determination. Subsidies do not apply during the Trial Work Period. If the employer cannot provide an exact value for the Subsidy there is a form that can be used to help SSA determine the value. See 20 C.F.R. § 404.1574(a)(2).

Where possible, advocates should draft letters for employees to sign when establishing a subsidy. It is helpful for the employer to decide on a percentage of the work that is subsidized and state this in the letter. Under current rules, SSA will generally take the employer’s subsidy calculation without further development. POMS DI 10505.010.

Unsuccessful Work Attempts

An Unsuccessful Work Attempt (UWA) is when a beneficiary goes back to work and begins earning over the SGA amount, but stops within 6 months because of:

• The person’s disabling conditions; or
• Elimination of the special services or assistance that the individual needed in order to work

In these cases, earnings are not counted, but the months may count towards the Trial Work Period. 20 C.F.R. § 404.1574(c). 

Business Expenses

Self-employed persons can deduct the reasonable cost of business-related expenses from monthly gross earnings. This would also reduce countable wages.

Unincurred Business Expenses refers to self-employment business support that someone provides to an employee at no cost. In deciding whether someone is working at the SGA level, SSA will deduct the unincurred business expenses from net earnings of self-employment (NESE). Examples of unincurred business expenses are (1) a Vocational rehabilitation agency provides a computer that is used in a graphic arts business; or (2) a friend works for a business as unpaid help. One way to indentify an un-incurred business expense is that the IRS does not allow the deduction of the cost of an item or services that was given to the business person.

Averaging Income

If someone’s work is continuous with significant change in work patterns or earnings, SSA will average earnings over the entire period of work requiring evaluation to determine whether substantial gainful activity has been done. 20 C.F.R. § 404.1574a. Averaging cannot occur during Trial Work Period Months or after a cessation due to work activity has been determined. Wages are generally averaged over the entire work period being evaluated. However, distinct periods must be averaged separately where the SGA level has changed or there is a significant change in work patterns or earnings. POMS DI 10505.015

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. A 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 a 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, the first advice given to a beneficiary is 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 a 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 a 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

          $674 (Federal Benefit Rate) minus $180 = $494 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 generally 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 a SSI beneficiary receives food or shelter. §§416.1130-416.1147.

Counting In-Kind Support

If a 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. 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 $674 (for 2011), a person on SSI who lives in another person’s household would, assuming no other deductions, received $449.34, reflecting the one-third deduction of $224.66. For more recent updates, please see the SSA website.

SSA's basic rule is the one-third reduction will be applied to a 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 a number of 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)(9). 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.

SSI Work-Related Overpayments 

Since SSI is a means-tested program based on financial need, any income will affect the amount of the SSI check. For an individual who is on SSI and working, SSA has a method to disregard a percentage of earned income, so that not all earnings will be counted to reduce the SSI benefits. First, SSA will deduct $20, the General Income Exclusion, if it was not used against any unearned income. Second, SSA will disregard the first $65 of a beneficiary’s gross monthly earnings. This is called the Earned Income Exclusion. Then, SSA will deduct one dollar from the beneficiary’s SSI check for ever two dollars earned.”

For example, if an SSI recipient earns $501, uses no other work incentives (described under “SSI Work Incentives”), and has no unearned income, SSA will calculate the new SSI check as follows:

$501 minus $20 (General Income Exclusion) minus $65 = $416
$416 divided by 2 = $208 Countable Earnings
$674 minus $208 (Countable Earnings) = $466

SSI Work Incentives
 

Like SSDI, SSI recipients can utilize work incentives to reduce their countable income. The SSI and SSDI work incentives are not exactly the same. In addition, the SSI work incentives are deducted at various points in the SSI check calculation. See “SSI Calculation Sheet”. It is often possible to reduce or eliminate an SSI overpayment by retroactively utilizing these deductions in the benefit calculation.

Impairment Related Work Expense (IRWE)

Like SSDI, SSI recipients can claim Impairment Related Work Expenses. These are expenses that are related to the primary disability or any secondary disability on record that are necessary for the SSI recipient to go to work and stay on the job. In the SSI calculation formula, IRWEs are deducted from gross income before dividing by 2 just as the General Income Exclusion and Earned Income Exclusion are. IRWEs can include any number of out-of-pocket expenses, such as:

• Medical appointment payments
• Prescription co-payments
• Prosthetic devices
• Transportation costs
• Costs of adaptive devices for automobiles by persons who cannot drive an unmodified automobile

Before an IRWE can be subtracted from countable earnings, SSA must approve the expense. All receipts for IRWEs should be kept for verification with SSA.

Blind Work Expense (BWE)

A Blind Work Expense include any expense that a blind SSI recipient incurs reasonably related to work. POMS SI 00820.535. BWEs encompass a much broader range of expenses than the Impairment Related Work Expense. BWEs are deducted differently than the General Earned Income Exclusion, Earned Income Exclusion, or IRWEs. BWEs are subtracted in the SSI calculation formula AFTER dividing by 2. A comprehensive list of possible BWEs is located at POMS SI 00820.555 and include:

• Federal, State and local income taxes and Social Security and Medicare taxes
• Professional association, union dues, costs of license
• Mandatory Contributions
• Meals consumed during work hours

Student Earned Income

The Student Earned Income Exclusion allows qualified individuals to exclude up to $1640 (in 2011) per month in gross earnings from countable income, up to $6600 per year. POMS SI 00820.510. This exclusion can often be used by students to work part-time while going to school or take a summer internship with no impact on the SSI check. It is very important that SSA be affirmatively informed that the individual meets the requirements for this exclusion. Otherwise, SSA will not know to use it. It is not uncommon for overpayments to be reduced or completely eliminated once SSA is informed that an individual’s income can be excluded by the Student Earned Income Exclusion.

In order to qualify for the Student Earned Income Exclusion, an individual must be:

• under age 22 years
• a student regularly attending school.

Regularly attending school has a specific definition that can take into account taking less courses because of a disability or other reasons beyond that person’s control. School also includes more than just traditional education such as college POMS SI 00501.020.

Plan for Achieving Self Support (PASS)

SSI recipients can set aside income or assets that would normally count against an SSI check or eligibility into a separate account that is designated as a Plan for Achieving Self Support. The money set aside in a PASS must be used to pay for expenses that will help an individual meet a vocational goal. PASS plans must be approved by SSA. POMS SI 00870.001 et seq.

Common PASS plans include money to pay for books and tuition to college, money to pay for a car to get to work, or money to buy tools of a business. SSA makes sure that the plan is feasible, the individual can still meet necessary expenses while putting this money to use in a PASS, and that all money is spent on expenses related to the goal. It is possible to retroactively establish a PASS in order to erase an overpayment.

SSI Calculation Sheet

It is common for those trying to utilize the SSI calculation to determine the correct amount of the SSI check to forget where to deduct the work incentives or deduct incorrectly. The SSI Calculation table set out below can assist an individual in accurately determining the amount of an SSI check in a given month.

Please keep in mind that SSA utilizes something called “Retrospective Monthly Accounting” and “Transitional Computational Cycle” when determining the amount of SSI due in a particular month. POMS SI 02005.010 and POMS 02005.050. In general, this means that the SSI check amount is based upon 2 months prior with limited exceptions. Therefore, a SSI recipients earned income in April will impact the SSI check in June in most cases.

 

Step	Calculations
Unearned Income
General Income Exclusion (GIE)	-
Countable Unearned Income	=
Gross Earned Income
Student Earned Income Exclusion	-
Remainder
GIE (if not used above)	-
Remainder
Earned Income Exclusion (EIE)	-
Remainder
Impairment Related Work Expense (IRWE)	-
Remainder
Divide by 2
Blind Work Expenses (BWE)	-
Total Countable Earned Income	=
Total Countable Unearned Income
Total Countable Earned Income	+
PASS Deduction	-
Total Countable Income	=
Base SSI Rate (check for VTR or PMV)
Total Countable Income	-
Adjusted SSI Payment	=