Social Security Considers Change in SSI Income Rules

Because SSI is a means-tested program, Social Security considers a wide range of income and financial support in determining eligibility. The monthly payments can be reduced or even erased if you receive income from work or other sources, including ISM, although in the case of in-kind support the reduction is capped at about a third of the benefit amount. 

The ISM rules come into play if a beneficiary lives with others and pays less than a proportional share of food and shelter costs — for example, one-fourth in a four-person household — or receives help paying these bills from someone outside their household.

“We have historically included in-kind receipt of food in our consideration because food assistance helps people meet their basic needs,” the SSA says in the Federal Register. “However, the complexities of our current food ISM policies may outweigh their utility.”

The agency took a similar step in 2005, when it eliminated help paying for clothing as an ISM category.

Of the more than 7.3 million people who received SSI in January 2022, 793,000 — about 1 in 9 — had a share of their benefits docked because of in-kind support and maintenance, according to SSA data cited in the proposal.

The mean reduction was $207 a month, although the bulk of that likely stems from SSI recipients getting help with shelter costs such as rent, mortgage payments, property taxes and utilities rather than from food bills.

Still, Social Security says the proposal on the table could increase financial security and lessen food insecurity for beneficiaries by eliminating one source of potential payment reductions and removing a “possible disincentive for family and friends to help applicants or recipients obtain food.” 

The change would also make the ISM rules “less cumbersome to administer and easier for the public to understand and follow,” the agency says.

That could end up being the most significant aspect of the rule change, says Cheryl Bates-Harris, a senior disability advocacy specialist at the National Disability Rights Network.

“The ISMs are a very, very time-consuming, labor-intensive process for both Social Security to manage and for people to keep detailed records of,” she says. “There’s more important work to be done, I believe, at the Social Security Administration than determining whether or not food somebody received from someone is [in-kind support]. It just doesn’t make sense.”

‘First step’

Disability and antipoverty advocates have long called for broad changes in how SSI benefits are calculated and paid, but most would require congressional action.

Federal legislation introduced in 2021 proposed increasing SSI benefits to 100 percent of the federal poverty level; raising how much income beneficiaries can receive without triggering SSI reductions; ending the “marriage penalty,” the rule that eligible couples get the equivalent of 1.5 times as much as individual benefits rather than twice as much; and eliminating all reductions for food and shelter support.

A September 2021 Urban Institute report estimated that enacting all four changes would lift more than 3.3 million SSI recipients out of poverty but that, taken individually, ending ISM would have by far the least impact.

Smalligan, a coauthor of the report, calls changing the food rules “an important first step.”

“There is a lot more to be done, but it’s a meaningful difference. Food is a fundamental aspect of life, so it’s significant,” he says. “I certainly wouldn’t want us to stop here. I think it would be a disappointment if this is all they did.”