What Is the Loss of SSI Benefits?

Supplemental Security Income provides a monthly check to individuals who are disabled, blind or over 65. Low income, resource requirements and monitoring assure that those who qualify continue to need the funds. SSI payments come from the general revenue funds, and Social Security administers the SSI program. Recipients whose income or resources change may lose SSI benefits. Some recipients lose benefits permanently; others see a reduction for a month or several months.

An SSI recipient may have no more than $2,000 in resources to qualify for a monthly check. Social Security does not count a house and vehicle in the calculations. Once approved, the recipient may receive approval to fund a plan to achieve self-support or similar accumulation of income for future goals. Otherwise, the recipient must maintain resources at less than $2,000. Social Security evaluates earned and unearned income along with in-kind and deemed income to determine SSI eligibility. Social Security requires monthly reporting if income or resources change. If someone lives with you who does not qualify for SSI and earns a monthly income, that income may partially count as yours, since you benefit from it. Deemed income may reduce your SSI benefits.

The SSI monthly federal payment for 2011 is $674, with some states adding a supplement. Social Security offsets this benefit by your earned and unearned income. Earned income in excess of $1,433 a month causes a recipient to lose benefits for the month, but the loss is not immediate. The individual notifies Social Security within 10 days of the month in which the income changed and SSI implements the change two months forward. Unearned income greater than $694 offsets the SSI benefits for a month and you receive no check for that month.

An SSI recipient who receives an inheritance, gift or income that increases resources over the $2,000 limit must report the resources to Social Security. Social Security evaluates the new resources and may require that the SSI recipient sell the resources or forfeit benefits. SSI often gives you time to sell the resource with an agreement to return SSI payments once you sell the resource.

Deception or failure to report a change in income, resources or living arrangements may impose a penalty on the SSI recipient. A recipient who hides resources or gives resources away violates SSI regulations. Penalties may include loss of benefits for 36 months. Selling resources at full value may also disqualify you for benefits for a period of time because it puts you over the resource limits.