The SSI In-Kind Support and Maintenance (ISM) rules have long been a burden for SSI beneficiaries. Under current rules, when a third party (e.g., parent) pays the “food” or “shelter” expenses for an SSI recipient (e.g., adult child), that counts as ISM and the SSI benefit is reduced by the Presumed Maximum Value (PMV), or 1/3 of the Federal Benefit Rate plus $20. The FBR in 2024 is $943.00, so that’s a reduction of $334.33 in SSI benefit for each month the SSI beneficiary receives ISM.  However, SSA just issued two new rules which will help SSI beneficiaries with the challenge of ISM.

Effective September 30, 2024, “food” will no longer count as ISM; only “shelter” provided by a third party will count as ISM reducing the SSI benefit. In addition, SSA will have a new rental subsidy rule which means ISM rules will not apply if the SSI beneficiary has rental liability in an amount that is equal to or more than 1/3 of the SSI Federal Benefit Rate ($334.33 in 2024).

Elimination of “Food” as ISM:

So, let’s say a parent pays $500 per month for food expenses for their disabled child who receives SSI benefits. Since food currently counts as ISM, the SSI benefit is reduced by $334.33 each month and the disabled child receives $608.67 in SSI to pay for his or her other expenses.

However, beginning September 30, 2024, under the new rules (published March 27, 2024) if the parent pays $500 for food expenses there will be no reduction in SSI benefit and the disabled child will receive the FBR of $943.00 per month in SSI.

This will be so helpful for many SSI recipients whose family help pay for the cost of meals and groceries.

New Rental Subsidy Rule and Its Impact on ISM:

“Shelter” expenses will still be counted as ISM. Under current law, ISM for rent is triggered if the SSI beneficiary pays less than Current Market Value (CMV) for rent. In some instances, it is difficult to determine CMV and in others the CMV might even exceed the SSI paid so 1/3 reduction in SSI is unavoidable. However, when the new rule (published April 11, 2024) goes into effect (September 30, 2024) ISM for rent will not apply so long as the SSI beneficiary has rental liability in an amount that equals or exceeds the PMV value for the year (e.g., $334.33 in 2024).

So, beginning September 30, 2024, if a disabled adult child who lives with his mother pays mom rent in an amount of at least the PMV for the year ($334.33/month 2024) pursuant to a written rental agreement, the disabled child will continue to receive the FBR ($943.00 per month 2024).

These new rules will make it easier for families to support their disabled loved one with less reduction in SSI benefit.

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If you have a loved one with a disability or special needs and have questions about structuring your estate planning in the best way possible for them or are already administering a special needs or supplemental care trust for their benefit and have questions, call our office today at 480-922-1010 or email info@bivenslaw.com to schedule a consultation.

This is not an area of the law an estate planning attorney handle; you need a special needs planning attorney. We are one of the very few law firms that handle special needs planning matters and have decades of experience. We are here to help.