Can You Sell Some Assets if You Have Too Much to Qualify for SSI?

If you have too many assets (resources) to qualify for Supplemental Security Income (SSI), Social Security allows you to sell some of your assets. (SSI is a federal benefit available to elderly and disabled people who meet the Social Security Administration's strict income and resource guidelines.)

Resource Limits for SSI

A single person must not have more than $2,000 in resources and a married couple cannot have more than $3,000 in resources in order to be eligible for SSI.

What counts as resources? Resources are anything you could sell to pay for your living expenses. Examples of resources include:

• cash
• checking or savings accounts
• real estate other than the home you live in
• vehicles (other than one car)
• stocks and bonds, and
• retirement funds.

Even if you are deemed disabled by the SSA, owning excess resources can prevent you from getting SSI benefits. For more information, see our article on SSI resource limits.

Conditional Payments Program

The SSA has developed a program that allows people with too many resources who would otherwise qualify for SSI to sell their excess assets. Under this program, the SSA will allow you to get SSI benefits for up to nine months while you are trying to sell your excess real estate and up to three months if you are trying to sell personal property (however, you can get one three-month extension to sell personal property if you can show a good reason it wasn't sold). The benefits received during these time periods are called "conditional benefits."

Selling Real Property

Real property is real estate such as land, condominiums, or second homes (including mobile homes). Remember, you are allowed to keep the home you live in without it being counted against your resource limit.

The SSA will contact you every three months to make sure you are really trying to sell the property. You need to let the SSA know about any offers you get. If you turn down an offer, you must be able to explain to the SSA why the offer was unacceptable. If you are single and your equity in the property is $2,000 or less (or if you are married and the equity in the property is $3,000), the SSA will only contact you every six months.

Selling Personal Property

Personal property includes things like jewelry, clothing, automobiles, clothing, or savings bonds. Remember, you are allowed to own one vehicle without it counting against your resource limit. Also, you do not need to sell wedding rings or engagement rings, and up to $2,000 household goods and personal effects don't count toward the resource limit.

Paying Back Conditional Benefits

Once your property is sold, you will probably have to repay the conditional benefits you received during the nine-month conditional payment period, using your net proceeds. The conditional benefits are treated as "overpayments," since you weren't technically eligible to receive them during that time.

If you sell your property at its current market value, you don't necessarily need to pay back the entire amount of conditional benefits paid to you. You don't need to pay the whole amount back if the amount by which your resources now exceed the SSI limit is less than the amount of conditional benefits paid to you. Specifically, the SSA's rule if that you have to pay the lesser of the following:

• the amount of the conditional benefits you actually received, or
• the amount by which your new countable resources exceed the SSA's asset limits in effect at the start of the payment period.

Your new amount of resources now includes the sale proceeds (minus the costs of the sale).

If you sell the property for below its market value, the SSA will make its own determination of its value. The SSA will consider your resources to include those extra proceeds (what you should have received in the sale). In other words, the SSA will assume that you have that extra amount of money available to pay back the conditional SSI benefits you received. Also, if you purposely sell property for less than its market value, you can lose eligibility for SSI benefits for up to 36 months (called the period of ineligibility), depending on the actual value of the property you sold.

How to Apply for Conditional Benefits

In order to take advantage of this program you will have to file an "agreement to sell" application with the SSA. Additionally, the SSA will have to accept the agreement. This application is called Form SSA-8060-U3 and is available for download online or at your local SSA field office.

The application requires that you list the estimated market value of your property and an estimate of your proceeds from selling the property. The form also requires that you agree to sell the property for its highest possible value.

You must let the SSA know as soon as the property is sold.

If You are Unable to Sell Real Property

The SSA may allow you to continue to receive SSI payments beyond the nine-month time limit if:

• you haven't been able to sell the property
• you can show that you have tried your best to sell the property, and
• the value of the property would result in an SSI denial because of excess resources.

The SSA will not use the benefits you get during this extended time period to repay your conditional benefits (the money paid to you during the first nine months.) Its important that you make sure you let the SSA know if you are having trouble selling your property.

If You Own Your Property Jointly

The SSA will not require you to enter into an agreement to sell your assets if you own real property jointly with someone else and selling the property would cause the other owner undue hardship because he or she would no longer have a place to live. This is because the SSA will not consider this joint property as a countable resource under these conditions. However, if the joint owner moves, dies, or would be otherwise unaffected by the sale of the property, then the SSA can consider the property as a resource and you would have to apply for the conditional benefit program.

What Happens After You Sell Your Property

Once your property is sold, you will have to repay any benefits you received while waiting for the property to sell, as discussed above. If the proceeds from the sale of your resources exceed the SSI resource limits discussed above, you will still be ineligible for SSI. If your resources are now under the limit, you can begin to receive regular SSI payments.

Placing Your Assets into a Trust

You may be able to place your assets into a trust to preserve your eligibility for SSI. For more information, see our article on Using Trusts for SSI Eligibility.