It can be very difficult to get by on the small amount of Supplemental Security Income (SSI) pays. Many individuals are forced to borrow money from friends or family just to make ends meet. But, how can this negatively affect SSI eligibility?
If you need to borrow money from family or friends, you may be able to do this without affecting SSI eligibility.However, it has to be clear and provable to Social Security that the money was a loan and not a gift.
SSI is a “needs based” program. If a friend of family member is providing money, food, clothing or shelter, the SSI benefits may be reduced or stopped altogether.
I have had a number of cases where a client lives with family while the SSI cases is winding its way through the SSA system. If the claimant is expected to pay back the cost of rent or utilities, I encourage using a written agreement (it does not have to be formal) stating what the claimant will pay for, and an itemization of the expenses.
Keep in mind that this is not fool-proof! However, it can help show Social Security that the money or other assistance was a loan and not a gift.
This is extremely important, especially in SSI disability cases. The problem is the people go so long without any income, that they frequently have to find themselves asking for money. Sometimes their friends and family see what they have been going through, and just want to help them out by giving them money. However, as you mention, if the money is a gift instead of a loan, it can affect the SS Disability that they claimant would otherwise receive. I am glad to see someone is educating claimants about this important issue.