A Step in The Right Direction: Changes Coming to In-Kind Support and Maintenance
By Beth Misak, CLPF, Sr. Investment Advisor at True Link Financial Advisors, LLC and Becky Minaglia, CTFA, Senior Client Services Manager at True Link Financial, Inc.
The Social Security Administration (SSA) recently announced long awaited changes to the way it calculates its in-kind support and maintenance calculations. What does this mean for those receiving Supplemental Security Income (SSI)?
SSI is a United States government program providing financial assistance to individuals with disabilities who have limited income and assets. In-Kind Support & Maintenance, or “ISM”, is one form of income that SSI recipients may be receiving. Under current rules, ISM is received when a person, organization, or trust (essentially anyone other than the SSI recipient) provides or pays for food and shelter expenses, such as room, rent, mortgage payments, real estate taxes, heating fuel, gas, electricity, water, sewerage, and garbage collection.
On March 27, 2024, the SSA published its final rule “Omitting Food from In-Kind Support and Maintenance (ISM) Calculations. ”This new rule takes effect on September 30, 2024, and is designed to help SSI recipients who struggle to pay for basic necessities like rent and groceries when relying on their monthly SSI check alone (maximum benefit of $943 per month for 2024). Instead, SSI recipients may soon be able to receive assistance from a third-party for these items, rather than having to choose between paying their rent, or affording groceries or medicine.
In a statement, Martin O’Malley, commissioner of the SSA, said, “A vital part of our mission is helping people access crucial benefits, including SSI. Simplifying our policies is a common-sense solution that reduces the burden on the public and agency staff and helps promote equity by removing barriers to accessing payments.”
This change will substantially enhance the way that a trustee of a special needs trust (SNT) can supplement the needs of their beneficiaries. Since the new rule will allow food supplementation, without reducing someone’s monthly SSI benefit, a trustee could provide food security to their beneficiaries who may not have otherwise been able to afford healthy options. It may also allow a trustee to provide pre-cooked meal services for beneficiaries whose disability prevents them from cooking via traditional methods. This change is a critical step toward promoting independence and autonomy for individuals in our communities, especially those with disabilities.
It is always exciting when regulatory changes help to improve the lives of those we serve. True Link Financial Advisors asked three California Licensed Professional Fiduciaries (CLPFs) to share how this new rule change will positively impact the quality of life for a SNT beneficiary receiving SSI.
“As trustees of special needs trusts, we see our beneficiaries having to deal with many forms of tracking, in regard to the public benefits they receive. Frequently, special needs trusts augment the food purchases of a beneficiary. Now that the beneficiary will no longer have to track each of these purchases, a huge burden is removed. Not only will the beneficiary not have to track these purchases, they will also not have to report them to Social Security on a monthly basis.It is not uncommon for us to see ten to twenty purchases per month for food.These had to be totaled, they also had to be sent to Social Security every month, creating a reporting burden for the beneficiary, even if the amounts were relatively small. This is a welcome change.”
“The SSI stipend that beneficiaries receive, while meant to cover their food and shelter expenses, is entirely insufficient and outdated. This change will allow their SNT's to assist with their food costs without risk to or reduction of their benefits. This is fantastic! Meanwhile beneficiaries can now use their SSI benefits 100%towards their housing expenses, which is needed in our current economy with continually rising living costs. While I believe the SSI stipend is still insufficient to meet our typical California beneficiary's housing expenses, this upcoming change is progressive and very much needed.”
“Taking out food purchases for SSI beneficiaries is practical. SSI and CalFresh (Food Stamps/SNAP benefits) often aren't enough to cover most people's food and shelter. If their trust says funds cannot be used for anything that may reduce benefits, my options are limited without court intervention, which creates extra expenses for the trust. When funds are allowed by the trust to pay for in-kind-support-and maintenance, documenting all the food transactions becomes a hassle for the client and the trustee. Taking out the food limitation is a step in the right direction.”
“I believe this to be a very important step in the right direction as it will give more flexibility to the Trustee to help meet a beneficiary's basic needs. That being said, we often have to subsidize their housing that would end up with a 1/3reduction in their SSI benefits anyway but their quality of life would improve if the trust could afford it. It is near impossible to find housing in CA for the rates that SSI pays unless they want to rent a room in someone's home. The rates for room rental in my area are approximately $1000 a month with a shared living environment. This leaves little left for the beneficiary to spend on life's other necessities. I am excited about this progress but so much more is needed.”
Read the final ruling in full.
