Receiving Child Support Payments and its Impact
The Social Security Administration (SSA) defines child support payments as “a payment from a parent to meet the child’s needs for food and shelter. Child support can be in cash or in-kind; it can be voluntary or court ordered.” Child support payments are considered unearned income to the child who receives supplemental security income (SSI) benefits. For supplemental security income (SSI) purposes, according to the Social Security Act, a child is neither married, nor the head of a household and is either:
When a beneficiary wishes to purchase home from his/her settlement proceeds that are placed into a First Party Special Needs Trust with CPT, CPT, as Trustee must consider the following:
A thorough analysis of the budget and additional factors must be considered before a home purchase is approved. Why? As a Trustee, CPT has the responsibility to administer the trust in such a manner that preserves and maximizes the beneficiary’s eligibility for public benefits. If not, CPT, as Trustee will be in breach of its fiduciary duty.
What is unearned income? Per the Social Security Administration (SSA) and the rules pertaining to Supplemental Security Income (SSI), any amount of money received (not earned) by a beneficiary who receives SSI benefits is referred to as unearned income. If a beneficiary receives any money will reduce a beneficiary’s Supplemental Security Income (SSI) benefits on a dollar-for-dollar basis.
If a beneficiary receives Medi-Cal (California’s Medicaid Program), and not Supplemental Security Income (SSI), CPT, as Trustee, can pay for a certain portion or percentage of the beneficiary’s request to purchase food, shelter, utilities, or other In-Kind Support Maintenance (ISM) items without impacting Medi-Cal eligibility. Other items that are not considered as In-Kind Support Maintenance, can be paid in full without jeopardizing Medi-Cal eligibility.
In-Kind Support and Maintenance is also referred to as ISM. The Social Security Administration (SSA) defines in-kind support and maintenance as “food or shelter that someone else provides for you (trust beneficiary).” The SSA counts in-kind support and maintenance as income when they are determining the amount of supplemental security income (SSI) benefits payment.
William E. Lindahl, MBA, CLPF