Will I Lose My SSI Benefits If I Sell My Home?
If you receive benefits through the Supplemental Security Income program and own a home, you should speak to an SSI advocate at London Eligibility before selling it. Social Security regulations controlling what you can and cannot do with the money you receive on a sale of your home can be confusing, and not understanding them could cause you to lose the financial assistance and Medicaid coverage provided by the program.
What is SSI?
SSI is a program administered by the Social Security Administration providing cash payments to individuals with very limited assets and low incomes who are 65 years of age or older or to blind or disabled adults and children. Eligibility is based on financial need as determined by an applicant’s financial resources.
Countable resources, which may not have a total value over $2,000 for an individual and $3,000 for a couple, include the following:
I). Cash on hand and bank deposits.
II). Stocks, bonds, and U.S. savings bonds.
III). Personal property.
IV). Real property.
V). Motor vehicles.
VI). Other assets capable of being converted to cash or offered in exchange for food and shelter.
If you have available resources that exceed value limits, selling or transferring some or all of them to qualify for SSI benefits generally will not work because Social Security will consider its value when determining whether you qualify. However, some resources do not count.
How to get SSI benefits when you have available resources
Some resources do not count, so their value will not prevent you from qualifying for SSI. The value of a motor vehicle, which normally would be a countable resource, does not count if it is used by you or by a member of your household primarily for transportation.
The value of the land you own, and any structures built on it, including a house, usually counts as a resource except when you use it as your principal residence. Social Security regulations classify a house that you live in as your home, which means that its value does not count toward the resource limits.
If you move out of your home without intending to return to it as your principal residence, it becomes a countable resource. Some important exceptions apply to a home becoming a countable resource, including the following situations:
A). Your home remains your principal residence when you leave it to live in an institution, and your spouse or your dependent relative continues to reside in the home. Whether or not you intend to return to live in the home does not matter. However, it becomes a countable resource one month after your spouse or dependent relative leaves.
B). Leaving your principal residence to escape from domestic abuse does not convert the home to a countable resource provided you intend to eventually return.
C). The sale of your principal residence may not result in the proceeds counting toward your allowable resource limits.
How you handle the sale of your home will determine whether the money you receive from it puts your SSI benefits at risk.
Protecting your SSI benefits when selling your home
Selling a home that served as your principal residence need not jeopardize your eligibility to continue to receive SSI payments and Medicaid coverage, but you need to be careful about what you do with the money you receive from the sale. Discussing the transaction with the disability advocates at London Eligibility in advance of putting your home on the market can avoid problems later on when the sale is completed, and you receive the proceeds from it.
According to federal regulations, the money from the sale of your principal residence must be used to purchase another place to live. You have three months from receipt of the proceeds from the sale to reinvest all or part of them into a new principal residence. Receiving the money will not affect your SSI benefits because it is excluded from your resources for three months.
When you use the money you got from the sale of your home to purchase another residence, the new property will be excluded. However, any of the proceeds from the sale not invested into the new property may affect your eligibility for SSI. The funds not reinvested in an excluded resource become a countable resource and could make you ineligible for SSI if countable resources exceed the allowable limits.
Talk to the SSI professionals at London Eligibility
The sale of a home may affect your eligibility for SSI benefits, so let the disability advocates at London Eligibility explain the regulations and procedures you must follow to avoid loss or interruption of benefits. Real estate transactions that involve payments made to you under a promissory note can be particularly troublesome unless you invest what you receive into the acquisition of your new primary residence. Contact London Eligibility today for a free consultation.