As of September 30th, gifts of food will no longer be considered in-kind income for purposes of Supplemental Security Income (SSI). This continues a trend of easing up some of the draconian SSI rules.
SSI provides a minimal income for low-income disabled or blind individuals or those aged 65 or older, $967 a month for an individual and $1,450 for a couple in 2025.
Many states, including Massachusetts, supplement this amount. So qualified individuals in 2025 receive between $1,081 and $1,117 and married couples between $1,995 and $2,233 a month. The reason for the range is that Massachusetts provides different supplements depending on whether the beneficiary is disabled, blind or aged.
However, since this benefit is supposed to supplement the income the beneficiary is otherwise receiving, they lose a dollar of SSI for every dollar of income they receive. So, for instance, if a beneficiary has annuity income of $100 a month, their SSI benefit is reduced by $100.
ISM
This dollar-for-dollar reduction rule also applies to so called “in-kind support and maintenance” (ISM). If the beneficiary receives free housing or food, their SSI benefit is also reduced by their value up to a cap of a third of the SSI benefit. But as of September 30th, this rule will no longer apply to food. (In the past, the rule also applied to gifts of clothing, but that was removed from ISM in 2005.)
The food reduction was always a bit complicated and probably was rarely enforced. If an SSI beneficiary received donations from a food bank or was taken out to dinner by a relative, in theory they were supposed to report it as income to the Social Security Administration. I doubt that this happened very often. More likely food was included in the one-third reduction in benefits when a beneficiary was living in someone else’s home, for instance a parent’s house, who was providing free room and board. But in such situations, the inclusion of food really had no effect since the one-third reduction applied for the rent-free living in any case.
Paying for Housing
In most cases, it makes sense for a third party or special needs trust to provide housing or pay rent despite the one-third reduction since the benefit of decent housing is worth so much more than the few hundred dollars of reduced SSI payments each month.
One way to avoid the one-third reduction in benefits, at least for some SSI beneficiaries, is to use an ABLE account. These are special accounts — in Massachusetts available through Fidelity Investments — available to SSI beneficiaries who became disabled before age 26. (The age limit will rise to 46 as of January 1st.)
ABLE accounts may hold up to $100,000 and receive up to $19,000 a year (in 2025) of deposits without this being considered to be income to the beneficiary. So, for instance, a parent or special needs trust may deposit $1,500 a month into the ABLE account of an SSI beneficiary who can, in turn, use the funds to pay their rent without suffering a one-third reduction in their monthly SSI benefit.
Other Stuff
It’s a strange feature of the SSI rules that the in-kind income reduction only applies to necessities, not just housing. Anyone can pay for other things for beneficiaries without it affecting their benefits. This can include entertainment, education, computer systems, and travel.
The theory behind this policy is that SSI exists to make sure that people have just the basics they need to survive. If they can survive without the SSI benefit because they get their basic necessities provided by other means, then they have no need for the SSI benefit. Non-necessities, such as entertainment, are simply not a concern.