How In-Kind Income and Support Affects Your SSI Disability Payment

In-kind income and support refers to free room and board, and the Social Security Administration (SSA) wants to know if you're getting it. Why does it matter? When you receive monthly Supplemental Security Income (SSI) checks from the government, any type of income you receive can reduce the amount of your payment.

And Social Security counts things other than money as income. Here's how Social Security defines in-kind income and support and how receiving it can affect your SSI benefits.

What Does Social Security Consider In-Kind Income?

In-kind income is something you get for free, according to Social Security. It can include goods given to you as a gift or in trade for services. But free food and shelter are the main types of in-kind income that are "unearned" (not a result of employment).

Social Security categorizes free room and board as "in-kind support and maintenance" (ISM). You're receiving ISM if someone else is paying any of the following for you:

• food
• rent or mortgage payments
• homeowners' insurance
• real estate taxes
• utilities, including electricity, natural gas, propane, or heating oil
• water and sewer services, and
• garbage removal.

If someone provides you with shelter (room and board) that you don't pay for, Social Security will reduce your monthly SSI payment to account for this in-kind support and maintenance using specific rules (more on this below).

What Does Social Security Not Count as In-Kind Support?

What's not considered in-kind support and maintenance? Under Social Security rules, when someone else pays for any of the following, it doesn't count as ISM and won't affect your SSI benefits:

• cable, telephone, and internet services (including cell phone service)
• vehicle expenses (including purchase or lease, fuel, maintenance, and insurance)
• household furnishings and furniture
• pet expenses (including pet food and vet bills)
• clothing
• travel and entertainment expenses
• tuition or scholarships used for your education
• medical expenses (including treatment, medication, therapy, and medical equipment), and
• taxes (other than real estate taxes).

In addition, Social Security doesn't count the following forms of assistance as in-kind support:

• food stamps (SNAP)
• Section 8 assistance or other rental supplements from the government or a nonprofit, or
• public assistance payments (sometimes called general assistance).

Are You Receiving In-Kind Support and Maintenance?

You're not receiving ISM under Social Security's rules if you:

• live with other people and pay your share of the food and shelter expenses
• live only with your spouse and minor children, and nobody outside the household pays for your food and shelter (although a working spouse's income could potentially affect your SSI eligibility in other ways), or
• live alone and pay for your own food and shelter.

If the first situation applies—say you live with three roommates and pay a portion of the rent, utilities, and food costs—Social Security will examine the amount you pay for shelter and food. If you pay at least one-fourth of the actual food and shelter costs, you aren't receiving ISM. But if your monthly contributions are less than one-fourth of the monthly expenses, Social Security will find that you're receiving ISM and will reduce your SSI benefit.

There's one more exception: if you're given food or shelter as a loan and need to pay it back, it won't count as in-kind income and shouldn't affect your SSI payment. For details on the requirements for this exception, see our article on how loans of food and shelter affect SSI.

How Will Free Room and Board Lower Your SSI Payment?

First, know that the amount of your SSI payment is based on the current "federal benefit rate" (FBR), a value established by the government that changes each year. In 2024, the FBR is $943 for an individual and $1,415 for a couple. This is the maximum monthly amount you can receive in SSI benefits (unless your state pays an extra supplemental payment).

If you're awarded SSI benefits and have no income, you'll receive the FBR amount each month—$943 or, if your spouse receives SSI too, $1,415. But Social Security will reduce your monthly payment if you have any other income, including ISM. The SSA uses one of two rules when calculating the value of your in-kind support and reducing your SSI payment.

SSI and the One-Third Reduction Rule

The "one-third reduction rule" is applied if your situation meets both of the following conditions:

• you lived in another person's household for the full calendar month, and
• you received both shelter and food from others living in that household.

The one-third reduction rule simply means that Social Security will reduce your SSI payment by one-third—even if the value of the food and shelter you received for free is more or less than one-third of your SSI payment. This means that if you get free room and board and receive SSI in 2024, and have no other income, you'll receive $609 per month instead of $943.

If you don't get free room and board, the one-third reduction rule doesn't apply.

The Presumed Value Rule and Your SSI Benefit

The one-third reduction rule doesn't apply to you if, for example, you lived in your own household but someone else paid your bills, or you lived in someone else's household but they didn't provide your food. In that case, Social Security will apply the "presumed value rule."

Under the presumed value rule, the value of the food and shelter that you receive is set at one-third of the federal benefit rate ($943) plus $20. But unlike the one-third reduction rule, if you believe the actual value of your ISM isn't equal to the presumed value, you can dispute the amount. You can show that the amount of ISM you receive is actually less by proving that:

• the actual amount that another person pays for your food and shelter is less than the presumed value, or
• the current market value of the ISM is lower than the presumed value.

Once Social Security determines the value of your ISM, that amount will be deducted from your monthly SSI payment. The maximum presumed value is one-third of the FBR plus $20 (for 2024, that would be $334 per month).

Additional provisions can apply to children who receive SSI benefits, as well as homeless adults and those residing in a medical institution.

How to Avoid a Reduction of Your SSI Benefits Because of In-Kind Support

The simplest way to avoid a reduction of your SSI benefits because of in-kind support is to avoid receiving anything that counts as ISM. Of course, that's hard to do if you're living without someone who isn't charging you rent. But if someone is paying for your rent or light bill, pay for those things yourself and ask for help with other expenses instead, like:

• phone bills
• cable bills
• internet bills
• transportation
• medication copays, or
• doctors' visits.

However, you can't receive cash for these items; the family member or friend helping you has to make direct payments for these items to the providers (such as your phone company or your doctor).

Other strategies to protect your monthly SSI payment include:

• treating the room and board you're receiving as a loan (which you would need to repay eventually), or
• establishing an ABLE account (if you became disabled before turning 26). Others can deposit money into your ABLE account without affecting your SSI.

What If You Have Other Unearned Income Plus Free Room and Board?

If you receive other money (besides from working), that income is also subtracted from your SSI benefits—after the one-third reduction or presumed value reduction.

Does Social Security Count Gifts as In-Kind Income?

Social Security will count some types of gifts against your SSI payment, including cash gifts. But you can receive up to $60 in cash per calendar quarter without it lowering your SSI amount—but only if the cash gifts are infrequent or irregular. And many types of gifts won't count against you, including personal gifts of clothing, jewelry, and bus and plane tickets.

Cash gifts are in-kind income and lower your SSI payment dollar for dollar. And any non-cash gifts you receive that are considered in-kind income (like gift cards) are simply valued at their current market value and subtracted from your SSI payment like other income.

For more information on income rules and financial eligibility for SSI, see our article on SSI income limits.

_{Updated January 22, 2024}