For children to qualify for SSI benefits, their families must meet the income and resource limitations for the program. Social Security attributes some of parents’ income to children for the purpose of deciding SSI eligibility in a process called “deeming.”
Social Security will deem parental income to the child if the child is under age 18 and either lives in the home with a natural or adoptive parent or is in the parent’s control, even though the child may be away at school. Social Security will also count stepparent’s income if the stepparent lives in the same home with the child and a natural or adoptive parent.
SSI Formula for Deeming Parent's Income
Social Security has a complicated formula for deeming parental income to children. Assessing whether a child is financially eligible for SSI is done on a monthly basis.
First, Social Security totals up all of the parents’ gross earned and unearned income. Social Security will not count certain kinds of income. Examples of non-countable income are food stamps, welfare payments, and income tax refunds.
Then, Social Security deducts $356 per month for each nondisabled child, first from unearned income, until none remains, and then from earned income (wages). The deduction amount can change every year because it represents the difference between the federal benefit rate (the federal SSI amount) for individuals and couples. (For 2013, the couples' benefit rate is $1,066, minus the individual benefit rate of $710, for a deduction amount of $356 per non-disabled child.)
Next, Social Security takes a $20 deduction from the parents' unearned income, or, if there is no more unearned income, from their earned income. Then, Social Security deducts $65 from the parent's earned income and reduces the remaining total of earned income by half. Social Security then reduces the resulting combined total of earned and unearned parental income by the federal SSI benefit rate ($710) for an individual if the child lives with only one parent, or the rate for a couple ($1,066) if the child lives with both parents or one parent and a stepparent.
If there is only one disabled child in the household, Social Security deems the remaining total countable income to the one child. If there is more than one disabled child receiving SSI, Social Security divides the total countable income and deems it equally among the children.
Formula for Calculating Amount of SSI Child Will Receive
Social Security treats deemed income as unearned income to the child during its calculations. To figure out how much SSI is due to a child with deemed income, Social Security has perform a separate income calculation for the child. If the child has no earned income of his/her own, Social Security simply calculates the amount of the child’s SSI benefit by taking the parent's deemed income, subtracting the $20 deduction, and then subtracting this amount from the current maximum monthly SSI amount ($710, in a state that doesn't supplement SSI). The balance is the amount of SSI the child will receive each month.
If the household receives child support on behalf of the disabled child, Social Security treats it as unearned income received by the child, but only counts two-thirds of the total monthly support as countable income. Also, Social Security only looks at child support that is actually received, so if the non-custodial parent fails to pay support, it will not have any effect on the child’s SSI benefit.
Sierra is six years old and meets the medical disability criteria to receive SSI. She lives in a house with her mother, stepfather, and two nondisabled siblings. Sierra's mother works and has gross monthly income of $1,000. Sierra's stepfather works and has gross monthly income of $2,000. Sierra's father pays $250/month in child support for Sierra.
Sierra's mother and stepfather have no unearned income, and a combined total of $3,000 in earned income. Social Security will deem Sierra's stepfather's income to her because he is living in the same house with her and her mother. Social Security deducts $712 from the parents' income, or $356 for each non-disabled child. From the remaining $2,288, Social Security will deduct $85 (the $20 and $65 deductions) and divide the remainder by half, to come up with $1101.50 of countable income. Since Sierra lives with a parent and a stepparent, Social Security reduces the amount by the couples' benefit rate, $1,066. The total monthly income deemed to Sierra is $35.50.
Sierra also has $250 per month in unearned income in the form of child support. Social Security counts $166.67 of the child support as income (two-thirds of the total). So, Sierra's total monthly unearned income is $166.67 + $35.50, or $202.17. Social Security then performs the calculation on Sierr'a unearned income.
Sierra's $20 deduction is subtracted from the $202.17 to come up with a total countable income of $182.17. That income is subtracted from the current maximum monthly SSI for a child ($710), to leave Sierra with $527.83 in SSI each month. (Sierra lives in a state without a state supplementary payment.)
For more information, see our overview of how Social Security calculates SSI payments.
Income Deeming for Children Over 18
For children who are over 18, no income deeming occurs, but if the child lives with his or her parents rent-free, Social Security will assume that the child is getting free rent and board and can decrease the child's SSI benefit by one-third. For this reason, some parents charge their children rent and/or board. For more information, see our article on "in-kind income."