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After your child qualifies for SSI, how much money will your child receive monthly? It depends. This article explains how Social Security calculates your child's monthly SSI cash benefits.
SSI is a publicly funded safety net for people aged, blind or disabled, and financially needy. Since SSI is only for financially needy people, your child's monthly SSI payment varies depending on your child’s monthly countable income.
For example, Social Security starts the calculation by assuming your child is entitled to the maximum federal SSI cash benefit ($914 in 2023). The more countable income your child has every month, the less SSI monthly cash benefit your child receives.
How does Social Security define income? Remember, you are on Planet Social Security. They use familiar words (like “income”), but their definition of the word is unique.
Social Security has five types of income:
Unearned income is not earned income such as Social Security benefits such as Social Security Disability Insurance (SSDI) or Childhood Disability Benefit (CDB), pensions, State disability payments, unemployment benefits, interest income, dividends, and cash gifts from friends and relatives.
Deemed income usually comes from parents (or from a spouse). For example, for most parents with middle-class assets and income reading this book, their child will not become financially eligible to receive SSI until age 18 because the parents’ income and assets deem to their child until age 18 (subtracting an allowance for the other children and parents in the family), assuming the child lives with the parents. After their child turns 18, Social Security looks at only the adult child’s income and assets.
In-kind support and maintenance is food, shelter, or both that you get for free or for less than its fair market value. For example, suppose your child lives with you and receives both food and shelter for free and does not pay their fair share of the mortgage, utilities, and food expenses. Because your child receives food and shelter from you, Social Security would reduce your child’s monthly SSI payment by one-third.
Earned income is wages, net earnings from self–employment, and sheltered workshop payments.
Excluded or exempt income includes food stamps, Pell Grants, other scholarships, rental and energy assistance, social service payments, disaster relief, etc.
Countable Income
To understand how Social Security calculates your child’s monthly SSI payment, you must understand the concept of countable income. Generally, the more countable income your child has, the less your child’s SSI benefit will be.
However, Social Security does not count all your child’s “income.” Here are some examples of “income” that Social Security does not count for the SSI program:
Calculating Your Child’s SSI Benefit
Social Security’s calculation to determine your child’s SSI payment breaks down into two primary steps:
Step 1: Social Security subtracts any income they do not count from your child’s total gross income. The remaining amount is your child’s countable income.
Step 2: Social Security subtracts your child’s countable income from the SSI Federal benefit rate.
The result is your child’s monthly SSI Federal benefit as follows:
Step 1: Your Child’s Total Income
- Your child’s income that Social Security does not count
= Your child’s countable income
Step 2: SSI Federal benefit rate
- Your child’s countable income
= Your child’s SSI Federal benefit
Example
Your child, age 19, receives SSI. It’s 2023, and the SSI federal monthly amount is $914. The state you live in does not have a supplemental SSI payment. In March 2023, your child gets a part-time job at the local grocery store, earning $400 monthly. As your child's representative payee at the beginning of April, you report your child’s March earnings of $400 earnings to Social Security. Social Security uses that information to calculate your child’s monthly SSI benefit for May. That’s right; there’s a two-month delay. Social Security calls it retrospective monthly accounting (RMA).
You can figure out your child’s SSI payment for May as follows:
Your Child’s Unearned Income
$0 Unearned income: Your child has no unearned income. Your child’s SSI payment is not considered income.
- $ 20 General Income Exclusion
= $0 Countable Unearned Income
Your Child’s Earned income
$400 Gross Earned income
- $85 Earned Income Exclusion (the Earned Income Exclusion of $65 plus the General Income Exclusion since it was not used).
= $315
Divide by 2
= $157.50 Countable Earned Income
Add Together Your Child’s Unearned and Earned Countable Incomes
$0 Countable Unearned Income
+$157.50 Countable Earned Income
= $157.50 Adjusted Total Countable Income
Your Child’s Countable SSI Adjusted SSI Payment for May
$914 is the 2023 Federal Benefit Rate (add SSA administered state supplement)
- $157.50 Adjusted Total Countable Income
= $756.50 Adjusted SSI Payment
Your child is entitled to receive a $756.50 SSI cash payment in May.
The math is simple. The confusing part is the two-month delay; Social Security takes two months to adjust the SSI monthly cash benefit.
Now you understand how to calculate your child’s monthly SSI cash benefit. It’s easy. It’s essentially just adding up your child’s countable income (unearned and earned) and subtracting it from the maximum SSI Federal Benefit amount. Remember, SSI is for financially needy people. The more “income” your child receives, the smaller your child’s monthly adjusted SSI payment.
Please note that the above example did not include an example of what Social Security calls work incentives. Work incentives are ways to reduce or exclude your child's countable. They are similar to income tax deductions. We’ll discuss these work incentives in another chapter.
After your child qualifies for SSI, how much money will your child receive monthly? It depends. This article explains how Social Security calculates your child's monthly SSI cash benefits.
SSI is a publicly funded safety net for people aged, blind or disabled, and financially needy. Since SSI is only for financially needy people, your child's monthly SSI payment varies depending on your child’s monthly countable income.
For example, Social Security starts the calculation by assuming your child is entitled to the maximum federal SSI cash benefit ($914 in 2023). The more countable income your child has every month, the less SSI monthly cash benefit your child receives.
How does Social Security define income? Remember, you are on Planet Social Security. They use familiar words (like “income”), but their definition of the word is unique.
Social Security has five types of income:
- Unearned income;
- Deemed income;
- In-kind support;
- Earned income;
- Excluded income.
Unearned income is not earned income such as Social Security benefits such as Social Security Disability Insurance (SSDI) or Childhood Disability Benefit (CDB), pensions, State disability payments, unemployment benefits, interest income, dividends, and cash gifts from friends and relatives.
Deemed income usually comes from parents (or from a spouse). For example, for most parents with middle-class assets and income reading this book, their child will not become financially eligible to receive SSI until age 18 because the parents’ income and assets deem to their child until age 18 (subtracting an allowance for the other children and parents in the family), assuming the child lives with the parents. After their child turns 18, Social Security looks at only the adult child’s income and assets.
In-kind support and maintenance is food, shelter, or both that you get for free or for less than its fair market value. For example, suppose your child lives with you and receives both food and shelter for free and does not pay their fair share of the mortgage, utilities, and food expenses. Because your child receives food and shelter from you, Social Security would reduce your child’s monthly SSI payment by one-third.
Earned income is wages, net earnings from self–employment, and sheltered workshop payments.
Excluded or exempt income includes food stamps, Pell Grants, other scholarships, rental and energy assistance, social service payments, disaster relief, etc.
Countable Income
To understand how Social Security calculates your child’s monthly SSI payment, you must understand the concept of countable income. Generally, the more countable income your child has, the less your child’s SSI benefit will be.
However, Social Security does not count all your child’s “income.” Here are some examples of “income” that Social Security does not count for the SSI program:
- The first $20 of most income received in a month;
- The first $65 of earnings and one–half of earnings over $65 received in a month;
- The value of Supplemental Nutrition Assistance Program (food stamps) received;
- Income tax refunds;
- Home energy assistance;
- Assistance based on need funded by a State or local government, or an Indian tribe;
- Small amounts of income received irregularly or infrequently;
- Interest or dividends earned on countable resources or resources excluded under other Federal laws;
- Grants, scholarships, fellowships or gifts used for tuition and educational expenses;
- Food or shelter based on need provided by nonprofit agencies;
- Loans to you (cash or in–kind) that you have to repay;
- Money someone else spends to pay your expenses for items other than food or shelter (for example, someone pays your telephone or medical bills);
- Income set aside under a Plan to Achieve Self-Support (PASS);
- Earnings up to $2,220 per month to a maximum of $8,950 per year (effective January 2023) for a student under age 22;
- The cost of impairment–related work expenses for items or services that a disabled person needs in order to work;
- The cost of work expenses that a blind person incurs in order to work;
- Disaster assistance;
- The first $2,000 of compensation received per calendar year for participating in certain clinical trials;
- Refundable Federal and advanced tax credits received on or after January 1, 2010; and
- Certain exclusions on Indian trust fund payments paid to American Indians who are members of a federally recognized tribe.
Calculating Your Child’s SSI Benefit
Social Security’s calculation to determine your child’s SSI payment breaks down into two primary steps:
Step 1: Social Security subtracts any income they do not count from your child’s total gross income. The remaining amount is your child’s countable income.
Step 2: Social Security subtracts your child’s countable income from the SSI Federal benefit rate.
The result is your child’s monthly SSI Federal benefit as follows:
Step 1: Your Child’s Total Income
- Your child’s income that Social Security does not count
= Your child’s countable income
Step 2: SSI Federal benefit rate
- Your child’s countable income
= Your child’s SSI Federal benefit
Example
Your child, age 19, receives SSI. It’s 2023, and the SSI federal monthly amount is $914. The state you live in does not have a supplemental SSI payment. In March 2023, your child gets a part-time job at the local grocery store, earning $400 monthly. As your child's representative payee at the beginning of April, you report your child’s March earnings of $400 earnings to Social Security. Social Security uses that information to calculate your child’s monthly SSI benefit for May. That’s right; there’s a two-month delay. Social Security calls it retrospective monthly accounting (RMA).
You can figure out your child’s SSI payment for May as follows:
Your Child’s Unearned Income
$0 Unearned income: Your child has no unearned income. Your child’s SSI payment is not considered income.
- $ 20 General Income Exclusion
= $0 Countable Unearned Income
Your Child’s Earned income
$400 Gross Earned income
- $85 Earned Income Exclusion (the Earned Income Exclusion of $65 plus the General Income Exclusion since it was not used).
= $315
Divide by 2
= $157.50 Countable Earned Income
Add Together Your Child’s Unearned and Earned Countable Incomes
$0 Countable Unearned Income
+$157.50 Countable Earned Income
= $157.50 Adjusted Total Countable Income
Your Child’s Countable SSI Adjusted SSI Payment for May
$914 is the 2023 Federal Benefit Rate (add SSA administered state supplement)
- $157.50 Adjusted Total Countable Income
= $756.50 Adjusted SSI Payment
Your child is entitled to receive a $756.50 SSI cash payment in May.
The math is simple. The confusing part is the two-month delay; Social Security takes two months to adjust the SSI monthly cash benefit.
Now you understand how to calculate your child’s monthly SSI cash benefit. It’s easy. It’s essentially just adding up your child’s countable income (unearned and earned) and subtracting it from the maximum SSI Federal Benefit amount. Remember, SSI is for financially needy people. The more “income” your child receives, the smaller your child’s monthly adjusted SSI payment.
Please note that the above example did not include an example of what Social Security calls work incentives. Work incentives are ways to reduce or exclude your child's countable. They are similar to income tax deductions. We’ll discuss these work incentives in another chapter.