- Loan Agreement in Effect at Time Assistance Is Provided
- Acknowledgment of an Obligation to Repay
- Plan or Schedule for Repayment
- Repayment Plan Must Be Feasible
- Enforceable Under State Law
Understanding When Social Security Reduces Supplementary Security Income Benefits
The Social Security Administration (SSA) treats SSDI (Social Security Disability Insurance) benefits and SSI (Supplemental Security Income) benefits differently. If you receive SSDI benefits, the SSA generally won't reduce your benefits even if you receive help from others to pay for expenses like food or shelter. However, the rules for SSI are different.
In a previous blog post, we discussed how SSI beneficiaries might see their benefits reduced if they receive help from family or friends for basic needs like food and shelter. For example, SSI beneficiaries living in someone else’s home for free could have their SSI benefit reduced by one-third under the “one-third reduction rule.” Similarly, SSI beneficiaries who have someone else paying their rent directly to their landlord could see their benefit reduced by one-third under the “presumed value rule.”
How Can I Avoid a Reduction in My SSI Benefit?
What if you cannot afford a reduction in your SSI benefits? Individuals with minimal resources often need help paying for basic needs, and every dollar of SSI can make a substantial difference in their lives. Fortunately, there is a solution: The SSA might not reduce your SSI benefit if you have a bona-fide loan agreement to repay the person assisting you. However, this agreement must be enforceable under state law and meet other strict requirements.
Requirements for a Bona-Fide Loan Agreement