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 

  1. Loan Agreement in Effect at Time Assistance Is Provided

The loan agreement must be in place when the assistance is given. You cannot reach an agreement to repay after you have already received the help. 

  1. Acknowledgment of an Obligation to Repay

There must be an unconditional agreement that you will repay the lender. This obligation cannot be contingent on receiving SSI benefits. 

  1. Plan or Schedule for Repayment

The agreement must include a specific plan or schedule for repayment. For example, you might agree to repay $50 on the first of every month. 

  1. Repayment Plan Must Be Feasible

The repayment plan must be realistic. The SSA will review your monthly expenses to ensure that the repayment plan is doable. 

  1. Enforceable Under State Law

The loan agreement must be enforceable under state law. Consulting with an attorney is crucial to ensure your loan agreement meets all necessary legal requirements. An experienced attorney can help draft an agreement that the SSA will accept. 

By adhering to these requirements, you can potentially avoid a reduction in your SSI benefits and receive the help you need without penalty. 


If you would like assistance with your Social Security Disability Insurance application or appeal, please contact one of Hawks Quindel S.C.’s experienced disability attorneys for a free consultation. We help individuals throughout the state of Wisconsin. 

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