Erin discusses where government benefits, such as SSI benefits, has helped her family. Meanwhile, Marc discusses a time when a client turned down Social Security Disability Income benefits during a pivotal moment, and built a better life.
How Supplemental Security Income (SSI) Can Be Beneficial
I’d like to tell you a personal story from my household about how my mother’s family managed to survive by being well educated about government benefits. I personally know the feeling of not having extra pocket money due to house, car, and personal welfare payments (among other expenses), which sometimes can create a feeling of hopelessness and despair.
My grandmother is 82 years old and has to take care of her 64-year-old disabled son. She is currently a stay-at-home caregiver and, due to age and physical health restrictions, is not able to work and earn income. My mom is supporting my grandmother, plus her brother and her children, along with trying to meet her own payments on just an estimated income of $50,000 a year.
I learned that it was very tough for her to make ends meet, so she helped my grandmother and uncle apply for Supplemental Security Income (SSI) to assist with their personal expenses and also relieve some stress from all the bills. The SSI benefits helped support our family with the little extra money.
The Cases Where SSI Benefits May Not Be Helpful
SSI was helpful in my family, but in other families, it may not make as much sense. We had a client who was 60 years old, who never received a formal diagnosis. Efforts would have been made to get him Social Security Disability Income (SSDI) since after the age of 60, SSDI is much easier to get. However, this would have still been a year long process, and even that length of time is not guaranteed. Then, there is a 2 year waiting period before the client could have gotten Medicare, which comes automatically two years after receiving SSDI. This would have given him 2 years of extra Medicare benefit and 1 year of extra SSDI earnings, if we had gone through all that effort.
Without going through that hassle, and if he just waited, at age 62, he could have gotten an early benefit, albeit with a penalty. Then Medicare would arrive at 65. He was already on Medi-Cal. The client and his family collectively decided that he would just work the next few years and have that flexibility to retire when he wanted, maybe even at 70, when he could maximize his benefit and lead a productive life for the next 10 years.
The client’s loved one decided that the client should have the ability to be the best he could be. They made the right bet. He remains a productive member of society and is very healthy, especially compared to the years he wasn’t working, when he had gained weight and was sedentary.
And here’s a friendly recap:
Supplemental Security Income (SSI) Requirements:
- Over the age of 65, blind, or disabled
- Blindness is defined as an adult or a child having a ventral visual of 20/200 or less in the better eye and a visual field is no greater than 20 degrees.
- Disabled is defined as physical or mental impairment, and also may include emotional or learning problems.
- Does not have the resources to provide for oneself.
- Low income: Individual’s income must be below certain limits, which vary based on the individual’s state of residency, living arrangement, number of people living in the residence, and income type.
- Resources: Total bank accounts should not have more than $2,000 in total.
- Resident of one of the 50 United States or the District of Columbia. Eligibility not limited to just U.S. citizens.
- Did not leave the United States for a full month or 30 consecutive days.
- Is not in an institution at the government’s expense (Examples: hospital or prison).
- Does not apply for any other government cash benefit that you are eligible for (ie.: pension, Social Security benefits).
- Gives Social Security Administration (SSA) the permission to access financial records.
- Must file an application to receive supplemental security income.
Disadvantages of Supplemental Security Income:
- Supplemental Security Income claimants are required to document and compile personal information, such as medical records. Claimants giving any inadequate or inaccurate documentation to justify their disability can cause the Social Security Administration to deny the SSI benefit.
- SSI creates a life of restrictive ability to keep assets (you must have under $2,000 as a single person or $3,000 as a married couple).
- For some, the SSI benefit may actually demotivate the individual from working. In certain cases, removing someone off the government entitlement, actually did wonders for their ability to work, achieve and grow.
Erin Bui is the Mangus Finance Circles specialist based in Riverside, CA, focused on helping special needs and senior communities with financial education and awareness.