When a married individual is applying for Supplemental Security Income, the income of the disabled claimant’s spouse will be taken into account when determining the disability benefit. This is because the income of the spouse who is not medically eligible for SSI may be deemed available to the SSI claimant.
How much spousal income can be deemed available to the SSI recipient, thereby reducing his or her social security benefits?
The rules for deeming spousal income available to an SSI claimant are complicated. In general, the first thing SSA does is to exclude from the spouse’s income, all types of income that cannot be counted when determining income. Income from food stamps and housing subsidies, for instance, cannot be included.
Once countable income is determined, SSA deducts an allocation for each of the spouse’s children who are ineligible for social security benefits. The amount of the allocation is the difference between the Federal Benefit Rate for an individual ($674 in 2010) and the Federal Benefit Rate for a couple ($1011 in 2010). Thus, an allocation of $337 is allowed for each child ineligible to receive a disability benefit.
Example: if a spouse has $900 of countable income and two ineligible children, $674 (or $337 x 2) will be deducted from the countable income (reduced from unearned income first, then earned), equaling $226.
Once all exclusions and deductions are made, if the spouse’s income is greater than the amount above ($337 in 2010, or FBR for a couple minus FBR for an individual), SSA will calculate the claimant’s disability benefit as if he/she were a couple receiving SSI rather than an individual. In the example given above, the individual rate would be used rather than the one reserved for couples receiving SSI, as the reduced amount is less than $337. In other words, there would be no spousal income deemed to the SSI claimant.
However, if the total amount of spousal income after all exclusions and deductions is greater than $337, the amount for couples would be used instead. In this case, countable income for both the individual applying for social security benefits and the individual’s spouse would be determined. First, all earned income for both the individual and the spouse (as deemed in the method described above) is totaled. Then, all unearned income is totaled.
Exclusions are calculated next. i.e., the first $20 of unearned income (gifts, inheritances, pensions, etc.) cannot be included and will be deducted from the combined unearned income for the couple. This $20 is referred to as the “general income exclusion.” Similar to the general income exclusion for unearned income, the first $65 of earned income cannot be counted, nor can the remaining half of earned income after the $65 deduction.
Thus, if a claimant and spouse earn a total of $1000 per month, and receive a total of $100 in the form of a monthly gift or inheritance, only $80 of the unearned income can be counted ($100 – $20). $467.50 of the earned income can be counted ($1000 – $65 = $935 divided by 2). So, of $1100 total monthly income, only $547.50 is countable. This final amount is subtracted from the FBR amount for couples, or $1011. Thus, in the example given, the SSI recipient would be eligible to receive $463.50 in social security benefits.
