Will Gifts Affect My SSI Eligibility?
Posted December 27, 2022 by Premier Disability Services, LLC®Some gifts may count as income, in which case they can affect your SSI eligibility. But determining which gifts do and do not affect your eligibility can be complicated. First, you have to determine whether or not specific exclusions apply. Then you have to determine if particular conditions apply that would preempt or otherwise invalidate those exclusions. Finally, there’s one more round of exclusions to review before a gift is considered income, should the first set not apply.[1]
The first set of exclusions are household goods and personal effects. Per 20 CFR § 416.1216(a) and (b), these are excluded from being counted as resources, which effectively keeps them from being counted as income as of April 1, 2005, as explained in a Social Security Administration operating manual, SI 01130.430. Unfortunately, the CFR isn’t particularly useful in determining whether these exclusions apply to a particular gift, because it doesn’t provide useful definitions of either.
Luckily, SI 01130.430 fills this gap, providing not only robust definitions but examples of each exclusion. Household goods are “items of personal property, found in or near the home, [that] the householder uses on a regular basis… for maintenance, use, and occupancy of the premises as a home.” ((C)1). Personal effects are “items of personal property ordinarily worn or carried by the individual, or items that have an intimate relation to the individual.” ((C)2).
There are limits to these exclusions. First, neither can apply to items an individual acquires or holds because of their value or as an investment, including animals kept for breeding or resale purposes. Furniture, appliances, and household electronics (i.e. televisions) are used for their utility around the home, not their dollar or investment value. Similarly, jewelry and other trinkets that are regularly worn or that have sentimental value are valued for factors other than their dollar or investment value. However, if it isn’t regularly worn (or designed to be worn), and if it doesn’t have some sentimental value (i.e. a family heirloom), it may not be considered a personal effect. (More detail is provided in 20 CFR § 416.1205.)
If your gift doesn’t qualify for either the household good or personal effect exclusion, there is one more set of exclusions to review. Necessary medical devices and personal care devices, such as prosthetic devices, are not counted as income. Items of cultural or religious significance also are not counted as income. Finally, educational gifts such as books and money used toward tuition are not counted as income. These exceptions can be found in 20 CFR § 416.1216.
If none of the above exclusions apply to your gift, it will be counted as income. In that case, a fair market value will be assumed for your gift, and it will count toward the SSI asset limit. If your total assets, including the fair market value of your gift, exceeds the asset limit, you will be ineligible for SSI. As of 2022, the SSI limit is $2,000 for individuals and $3,000 for couples.
By: Devon Brady of Premier Disability Services, LLC®
[1] These are actually a subset of the same exclusions reviewed in the first step. They’re also reviewed along with all other items during that step. They’re presented separately here only to highlight their importance and to aid understanding of the overall process.
