Your spouse is disabled, not employed and has no private disability insurance or reasonably priced health insurance, and you are getting a divorce. Your family law attorney reviews with you the main public benefit programs that may be available. They are:
- Social Security Disability (SSDI)
- Supplemental Security Income (SSI)
- Housing Assistance Program
- Medically Needy Program
This blog will address the income and asset restrictions of SSI.
Before SSI becomes an issue, the spouse must be disabled? The question is whether the spouse is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment, which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. If so, the spouse may be eligible to receive SSI if the income and asset limitations of the program are met. There is an important distinction between SSDI, which is not income or asset based, and SSI, which is.
The 2014 monthly maximum SSI federal payment is $721. Subtracting countable income, being cash or in-kind that can be used to meet food and shelter needs, will reduce this monthly amount. Receipt of these monies reduces the SSI payment dollar for dollar, except for medical care, services and medical insurance paid by a parent or third party directly to the provider; some social services; receipts from the sale; exchange or replacement of a resource; proceeds of a loan; and bills paid for the SSI claimant other than food or shelter.
Countable income is earned and unearned income. Both reduce the monthly SSI payment. Earned income is earnings from employment or self-employment. Unearned income includes alimony, support payments, annuities, pensions and other periodic payments, dividends, interest, certain royalties, rents, death benefits, prizes and awards, gifts and inheritances, and support and maintenance in kind. Maintenance and support in kind are considered unearned income.
There are special rules for valuing food and shelter. Shelter includes: room, rent, mortgage, real estate taxes, electricity, gas, water, sewer, garbage collection, and heating fuel. If an SSI recipient lives in a separate household, it is presumed that the value is one third of the federal SSI benefit rate. However, if you can prove otherwise, the actual dollar value is used if it is less. If an SSI recipient lives in another’s household and receives both food and shelter, the SSI benefit is reduced by one third of the federal SSI benefit rate.
Generally, countable resources of an SSI recipient cannot exceed $2,000. Resources are cash and other liquid assets, or real and personal property that can be converted to cash for support and maintenance. Certain items are exempt from being counted. They are the individual’s principal residence, household goods and personal effects, burial plot and irrevocable burial/funeral contract, one automobile, a life insurance policy with no more than a $1,500 cash value, and certain income producing property, but not rental property.
What does all this mean to a divorcing spouse? If an alimony payment will not exceed the current benefit amount (in 2014 that’s $721.00) and the payer spouse’s income is uncertain, such that a petition for modification or abatement of alimony is likely to occur and health insurance is not available at a reasonable cost, the disabled spouse may be better served by pursuing the SSI benefit and Medicaid rather than alimony. The Court can reserve jurisdiction to award alimony in appropriate cases in the event that the disabled spouse no longer meets the SSI requirements. Consideration of SSI and Medicaid is a complex issue and an experienced family law attorney who has experience in dealing with social security matters can offer insight into proper planning for a divorce.