1. Presents Supplemental Security Income (SSI) Overview With David Lillesand, Esq. Sponsored by: January 14, 2014

2. Social Security Act Title II – Retirement and Disability Insurance Title XVI – Supplemental Security Income Title XVIII – Medicare Title XIX – Medicaid For the relationship between them, see the Lillesand Matrix in Appendix 1 of the materials

3. Our focus Paid up millonaire’s social insurance T2 Social Security RIB (age 66 = FRA) DIB a/k/a SSDI CDB/DAC Survivors Dependents Eligibility triggers Medicare T16 SSI Welfare Categorical Eligibility SSI-Disabled & Blind SSI-Elderly Asset limit $2,000/$3,000 Low income – FBR less countable income SSI Eligibility triggers Medicaid in most states

4. Lillesand Matrix T2 SSA $$ RIB, SSDI, CDB Medicare T16 SSI $$ from SSA Medicaid Concurrent benefits Monthly SSA checks Public Health Insurance Paid Up Insurance Welfare

5. Supplemental Security Income (SSI) Background – Nixon nationalized state welfare Administered by SSA Financing – federal general revenue funds Relationship to Medicaid - $1 of SSI = Medicaid Section 1634 of SS Act State Enabling Statutes Categorical Eligibility + Poverty – both are required Either Aged – 65+ or Disabled Countable Assets less than $2,000 plus low income

6. Sequential Evaluation Process (“Substantive Law” - see Appendix 2) Methodology to determine if someone is “disabled” under SS Act: 1.Engaging in Substantial Gainful Activity? 2.Has a non-severe impairment? 3.Meets federal Listing of Impairments? 4.Can perform Prior Relevant Work? 5.Can perform new occupation? Given the claimant’s RFC + Age + Education

7. SSA Claims and Appeals Procedure Mostly the same for T2 and T16 (“Procedural Law” - see Appendix 3) 1.Initial application 2.Reconsideration 3.Administrative Law Judge Hearing 4.Appeals Council – Washington, D.C. 5.U.S. District Court 6.U.S. Circuit Court of Appeals 7.U.S. Supreme Court

8. SSI non-financial requirements Citizen or lawful resident Not be a fugitive felon, in prison, violating parole Not be outside the U.S. for more than one month Must apply for all other benefits for which you are eligible Accept medical treatment And other requirements (see written materials) If an alien, meet special requirements

9. SSI financial eligibility - principles Two tests –income and resources (assets) Measured on a month-by-month basis Amount paid has nothing to do with “calculated need” – it is Federal Benefit Rate (FBR 2014 is $721) less all “countable income” “Income” is not IRS income but “public benefits income

10. SSI financial eligibility principles, continued Claimant’s responsibility to report income and assets Retrospective monthly accounting “Income in the month received becomes resource (asset) if retained on first of following month” For cessations, Goldberg vs. Kelly rules apply No liens at death to repay SSI

11. SSI financial eligibility principles, continued “Countable Income” is anything “that comes in” that is not counted nor excluded by law Things that are “not income” by law Proceeds of a loan Tax refunds Payments made to third parties for goods or services that are not ISM Others (see list in materials)

12. SSI financial eligibility principles, continued “Exclusions of income” Ten Earned Income exclusions – applied in strict order Twenty-Two Unearned Income exclusions – Deemors (healthy parent or spouse) entitled to exclusions before deeming applies to SSI claimant

13. SSI Income – Four Types The four types of income are treated differently in terms of how much is subtracted from the SSI monthly check. The four types are: Earned income Unearned income In-kind Support and Maintenance (ISM) Deemed income – parent to child, spouse-to spouse

14. SSI – Earned Income Earned (vs. Unearned) is highly favored by the law Subtract $20 general income disregard, then take $65 off the top, then subtract 50%, and the remainder is “countable income.” Example: Joe’s part time work pays $400 that month Earned Income$400 Less general income disregard ($20) Less earned income exclusion ($65) Remainder$315 Less 1/2 of earned income ($315 - $157.50) ($157.50) TOTAL COUNTABLE INCOME $157.50 SSI Federal Benefit Rate$721.00 Less Countable Income($157.50) TOTAL SSI CHECK AMOUNT$563.50

15. SSI – Unearned Income Gifts are countable “unearned income” SSDI, pensions, etc., are “unearned income” Everything is unearned unless it is earned All unearned income, except $20, counts unless on the specifically excluded list – examples of exclusions: One third of child support WWII war reparation payments Interest on excluded burial space purchase Etc.

16. SSI Income – In-kind Support and Maintenance (ISM) ISM consists of ten “food and shelter” items ISM is payments made to third parties that give the SSI claimant one or more of the ten “food and shelter” items No matter how much is paid, the Presumed Maximum Value of the “food and shelter” is $260.33 that month $721 FBR minus $260.33 = SSI check of $460

17. SSI and ISM, continued: The ten “food and shelter” items are: 1.Food 2.Mortgage (including property ins. required by lender) 3.Real property taxes (less any tax rebate/credit) 4.Rent 5.Heating fuel 6.Gas 7.Electricity 8.Water 9.Sewer 10.Garbage removal ONLY THOSE TEN TRIGGER THE PMV REDUCTION FOR ISM !!!

18. The Second Financial Eligibility Test: Few Resources (assets) - Principles Measured on the first moment of the first day of each month “X” is “income in the month received, and if retained becomes a resource on the first of the next month” Resource is anything owned by the claimant that can be converted to cash, unless excluded by law It is a resource “if the claimant has the right, authority, or power to liquidate the property” Resources of deemor may count

19. SSI Resources - exclusions The first $2,000 ($3,000 if married couple) Home of any value Car of any value Household goods and personal effects used by claimant SNT investments (“my millionaires on welfare”) Retroactive SSI or SSDI payments for 9 months And others (see list in written materials)

20. SSI – Deeming of Income and Resources - Principles Deeming applies in ONLY THREE situations – 1.parent to minor child (stops on child’s 18th Birthday) 2.Spouse to spouse 3.Sponsor to alien For parent and spouse deeming, only applies if deemor lives with SSI claimant Certain things not deemed – e.g., deemor’s IRAs and pension funds

21. SSI Deeming – cont. No deeming upstream nor laterally Child’s income not deemed to SSI sick parent Siblings’ incomes not deemed to SSI sick child Remember: Parental deeming stops at age 18

22. The Following Deeming Eligibility Chart for Children does not apply when: The parent(s) receives both earned income (for example, wages or net earnings from self-employment) and unearned income (for example, Social Security benefits, pensions, unemployment compensation, interest income, and State disability). The parent(s) receives a public income maintenance payment such as Temporary Assistance for Needy Families (TANF), or a needs–based pension from the Department of Veterans Affairs. The parent pays court-ordered support payments. The child has income of his or her own Any ineligible (healthy child not on SSI) child has income of his or her own, marries, or leaves the home. There is more than one disabled child applying for or receiving SSI Benefits.

23. Deeming Eligibility for Children Gross monthly income BELOW the dollar amounts* shown means a disabled child may be eligible for SSI benefits. * Amounts given are general guidelines only. Number of ineligible children in household All income is earnedAll income is unearned One parent in household Two parents in household One parent in household Two parents in household 0$ 2,917$ 3,617$ 1,436$ 1,786 1$ 3,267$ 3,967$ 1,786$ 2,136 2$ 3,617$ 4,317$ 2,136$ 2,486 3$ 3,967$ 4,667$ 2,486$ 2,836 4$ 4,317$ 5,017$ 2,836$ 3,186 5$ 4,667$ 5,367$ 3,186$ 3,536 6$ 5,017$ 5,717$ 3,536$ 3,886

24. Application of SSI Income & Resource Rules January 1 – SSI claimant receives SSI payment of $721 January 10 – Claimant receives court settlement of $250,000 – spends $15,000 in Vegas January 31 – Claimant places $235,000 in Special Needs Trust February 1 – Claimant receives SSI payment of $721 February 10 – Claimant reports (in writing) to SSA that he had income in January of $250,000

25. Application of SSI Income & Resource Rules March 1 – Claimant receives no SSI check for that month because his unearned income in January was too high ($721 FBR minus $250,000 income = $0 SSI) April 1 – Claimant receives SSI check of $721 – the $250,000 of “income” in January was spent & the rest converted to an “exempt resource” (non-countable asset – a Special Needs Trust) before February 1st May 22 – SSA tells claimant that he was overpaid in January and owes SSA $721; SSA begins deducting $72/month (with no interest) to recover the $721

26. SSI Penalty for Transfers Look back period is 36 months Penalty is amount transferred divided by FBR in the month transferred (Example: $10,000 divided by $721 yields a penalty of 13 months from the past date of transfer) Result is the number of months of ineligibility for SSI

27. SSI Transfer Penalty (cont.) Exceptions to Transfer Penalty Transfers to SNTs Transfer of home under certain conditions Non-home transfer exceptions Resource returned, then claimant seeks conditional benefits pending sale Transfers for purposes other than to qualify for SSI Undue hardship

28. Fees in Social Security Claims Highly regulated Failure to follow = civil and criminal penalties and disbarment from appearing before SSA Fees cannot be paid unless approved by SSA in most cases

29. How to file a claim www.SocialSecurity.gov (T2 only) or (800) 772-1213 (for T2 and T16) or Local Social Security office (for T2 and T16)

30. Support (866) 296-5509 support@specialneedsplanners.com Contact David Lillesand: David@LillesandLaw.com