What Happens When Your Child Receiving SSI Goes to College?

by Thomas D. Begley, Jr., Esquire, CELA

SSI is a monthly income program. For 2018, the maximum federal benefit is $750 per month. In addition, some states have supplements. Unearned income reduces the SSI payment dollar-for-dollar after a $20 per month disregard. Earned income reduces the SSI payment by $1 for every $2 earned after an $85 per month disregard. SSI is intended to pay for food and shelter. If a third party provides food and shelter, the SSI payment is reduced by one-third or one-third plus $20, depending on the individual’s living arrangement.

Protected Savings

A Special Needs Trust, an ABLE Account or a Social Security Pass (Plan to Achieve Self-Support) are good was to set aside money for education. These tools enable individuals with disabilities to accumulate money without affecting SSI and/or Medicaid.

Monthly Earnings

There is something called a Student-Earned Income Exclusion (SEIE). This enables students to take summer or part-time jobs. SSI disregards the first $1,820 of monthly earnings up until an annual total of $7,350. Earnings over $1,820 per month will then receive the same earned income exclusion and general income exclusion available for non-students, after which earnings reduce SSI dollar-for-dollar. SSI does not count the first $65 of monthly earnings and half of the remainder. In addition, there is a $20 per month general income disregard. To be eligible, a student must under age 22 and “regularly attending school.” This means that the student goes to classes at least one month during the quarter. For high school students, this must be 12 hours per week, for vocational training it is 12 hours per week, and for college students the requirement is eight hours per week.

Different rules apply to home schooling and to “homebound” students. For earned income for students, SSI disregards the first $1,820 per month up to an annual total of $7,350. Earnings in excess of $1,820 per month are treated under the same earned income exclusion set forth above.

Financial Aid

Any financial assistance from Title IV of the Higher Education Act of 1965 or Bureau of Indian Affairs programs is not counted as income. Interest and dividends from unspent funds are also exempt. Pell Grants, federal Work-Study and direct loans are just a few of the covered programs. There is no effect on SSI as long as the funds are spent on education-related needs within nine months of receipt.

Student Housing

Since SSI is intended to pay for food and shelter, non-students would receive a reduction of one-third of the federal SSI benefit ($750 per month in 2018) plus $20. Therefore, the maximum reduction would be $270 per month. However, if the student resides on campus and room and board is covered by either parents or Financial Aid, the rules are different. Under these conditions, the school living arrangements are considered temporary and are not categorized as ISM if the individual is over age 18 and will return to his or her permanent address during holidays, vacations, or following graduation, and lived at their permanent address for at least one calendar month prior to attending school. However, if the student receives free housing and meals at their permanent residence, ISM applies and SSI will be reduced.

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