If you are disabled and have a limited work history, you may be eligible for Supplemental Security Income (SSI) disability benefits through the Social Security Administration (SSA). However, even if the SSA finds you disabled, you may not qualify for SSI if you have too much income.
To determine if you fall within the income limits, the SSA counts money (or goods) that you earn from work, money earned by the people you live with, pensions and other retirement payments, and food and shelter that you receive for free or at below fair market value to calculate your income. If you earn too much income, you may not qualify for SSI, or you may have reduced SSI benefits.
What Is In-Kind Income?
If you perform work and are paid with something other than money, the SSA will consider this as "in-kind income."
“In kind support and maintenance" is food and shelter that you receive either for free or at below fair market value. For example, if you are living with someone, such as an adult child, who pays for your rent and housing, the SSA will consider this as in-kind support and maintenance and will count it toward your countable income. The SSA also counts contributions towards electric bills, gas bills, mortgage bills, and property taxes as in-kind support and maintenance.
How Does the SSA Determine the Value of “In-Kind” Income?
The SSA values “in-kind” income differently depending on the type of financial assistance or compensation you receive. If you work for someone and receive payment in a form other than food, shelter, or money, the SSA will generally use the current fair market value of the items you received to determine the amount of “in kind” income. For example, if you perform carpentry work and are given a table saw as compensation, the SSA will use the fair-market value of the table saw to calculate your “in-kind” income for the work performed.
If you are paid with food and shelter in exchange for employment, or if you live with someone who pays your food and shelter costs, the SSA values this in-kind support and maintenance (IKSM) using either the “one-third reduction rule” or the “presumed value rule.” These are complex formulas that determine the value of the food and shelter you received, which is the amount by which your SSI check will be reduced.
One-Third Reduction Rule
The SSA uses the one-third reduction rule if you lived with another person (other than your spouse) and others paid for you’re your shelter and food. In this case, your SSI payment will be reduced by one-third, even if the value of the food and shelter that you received for free exceeds this amount or is less than this amount. In 2013, your SSI payment would be decreased from $710 to $473.33.
Presumed Value Rule
If you lived in your own house but someone else paid your bills, including your food, or if you lived in someone else’s house for free but you paid for your own food, the SSA will apply the “presumed value rule.” This rule is similar to the one-third value reduction rule in that your SSI payment will be reduced by one-third (plus $20), but you are allowed to dispute the reduction if you think you're receiving less than that in food or shelter.
Exception for Public Assistance Household
If everyone living in your household receives some sort of need-based public assistance (for example, Temporary Assistance for Needy Families (TANF), SSI, or any state sponsored need-based program) then the SSA considers yours to be a "public assistance household." In this situation, contributions from other members of your household would not be considered as in-kind support and maintenance. However, if you receive assistance from someone who lives outside the household, the SSA would consider the contributions to be in-kind income.
What Happens If I Don’t Report In-Kind Income?
If you fail to report in-kind income or in-kind maintenance and support, the SSA could determine that you have been overpaid and will withhold or reduce your SSI payments until the overpayment is satisfied.