As a Social Security Insurance (SSI) benefit recipient, you probably know how strict the Social Security Administration (SSA) is about the amount of income you receive. If you receive more than $750 in any one month or obtain more than $2,000 in assets, your benefits could subsequently be reduced or cancelled. Thus, it can a bittersweet moment when you receive a financial windfall that puts you over the limit. Here are a couple of things you can do to prevent the money you receive from affecting your benefits.
Open an ABLE Account
An ABLE account is a financial instrument created with the passage of the Achieving a Better Life Experience Act. It is a savings account designed for people who receive income-based public benefits that allows them to have more than the maximum income/asset limit set by the respective programs and not have the money affect their eligibility for program payments.
For instance, someone receiving SSI can put up to $14,000 per year in an ABLE account and SSA will not consider that money income as long as the person uses the cash for approved expenses (e.g. housing, transportation, and assistive technology). So, you can accept your windfall and still use it for your living expenditures.
While this account provides SSI recipients more freedom and flexibility when it comes to receiving money, it is restricted to people who have a recognized disability. Additionally, any money in the account would become the property of the state when you pass away, so you wouldn't be able to will the cash to your heirs.
Spend Down the Amount
If you're not eligible for an ABLE account, the other option you have for dealing with an unexpected windfall is to spend the money quickly. You are required to report any money you receive to the SSA. The agency will only count the money as income for the month you receive it. Anything left over at the end of the month will be counted as part of your assets. This means the agency will adjust your payment for the money if the money receive puts you over the $750 limit and you may lose your benefits altogether if you have over $2,000 in assets at the start of the next month.
To protect your future benefits, you can use the money to pay bills and other living expenses, particularly if the amount you receive is just enough to be troublesome. This could be a good opportunity to pay your rent in advance, stock up on groceries, or pay off some of your medical bills.
For more suggestions on things you can do to protect your SSI benefits when you receive a windfall, contact a Social Security attorney, such as at Van Gilder & Trzynka PC .Share
22 January 2018
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