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During an insightful presentation at the Special Needs Planning Symposium, Special Needs Planning Advocate and Attorney Kevin Urbatsch shared positive updates to regulations related to In Kind Support and Maintenance programs.  The Social Security Administration (SSA) will be unveiling changes to their In Kind Support and Maintenance (ISM) penalty over the next two months. These changes will positively impact the Social Security beneficiary and in turn reduce the administrative burden for the Special Needs Trust (SNT) trustee. 

For many years, the SSA has penalized SSI beneficiaries for receiving free food and/or free shelter by reducing the amounts from their SSI benefit payments. The current rules can be complex, but generally if the beneficiary receives free food and rent, the amount of SSI eligible benefits that the beneficiary is able to receive is reduced by approximately one third.  In 2024 this amount is $334.33.  The two regulation changes, proposed in 2023, will not only benefit thousands of SSI receivers, but also lessen the administrative constraints for the SSA and in turn streamline SSI program compliance. 

Here are the two significant changes you can expect in 2024. 

The SSA proposed a new rule in August 2023 that would revise existing regulations and adjust how the In Kind Support and Maintenance rental support penalty is calculated nationally. 

Under the current regulation, the SSA uses a calculation based on the current monthly rental value (CRMV) in order to determine if SSI beneficiaries should receive reduced benefits.  Most special needs individuals are paying a reduced rental rate due to help from a family member, loved one or trust. Oftentimes this calculation means that a family member or trust is paying for a large share of the rent even if the beneficiary is also paying for part of the rent.  The amount of rent provided by the family or trust is then considered In Kind Support and Maintenance, and the beneficiary’s SSI payments are reduced. This issue has been especially pronounced in states with a high cost of living . 

Cases in the Second and Seventh Circuit challenged the SSA’s current policy and calculations. The rulings found that there should be no penalty to the beneficiaries benefits if the SSI receiver secured a rental agreement and paid equal to or more than the government’s Presumed Maximum Value of $334.33 (PMV) in rent each month. The court rulings from Connecticut, New York, Vermont, Wisconsin, Texas, Indiana, and Illinois helped to support this nationwide change.  In other words, lawsuits in 7 states challenged the SSA calculation, and based on the court rulings these 7 states now use a simpler calculation in determining whether a family or trust’s payment of rent would impact a beneficiary’s SSI benefits.

In order to reduce administrative costs and standardize the rental subsidy policy nationally, the government is proposing to define fair market rent as “when the monthly rent required to be paid equals or exceeds the Presumed Maximum Value (PMV) or the current market value, whichever is less.” As of 2024, this PMV amount is $334.33 monthly or $4,011.96 annually. 

How does this change positively impact the Social Security benefit receive? The SSA is redefining the term “business arrangement” based on the PMV, rather than the CMRV, making regulations equitable across state borders. With the new rules that are proposed to be implemented, this means that if the beneficiary is paying $334.33 or more (i.e., the PMV amount for 2024) in their share of rent, they no longer will be penalized with a deduction to their SSI benefits. This also means that for higher cost areas, a family member or trust can now contribute more to the beneficiary’s rental cost without impacting the beneficiary’s SSI benefits.  It is estimated that 41,000 Social Security benefit receivers will see their monthly payments increase by an estimated $128 per month. Furthermore, an estimated 14,000 non-receivers will now qualify for the program. 

The new rule is set to be implemented on April 29, 2024. 

Another new regulation that is much more straightforward is the omittance of food from In Kind Support and Maintenance calculations. Issued in February 2023, the SSA proposed that food be completely removed from ISM calculations, which will help simplify administration and acceptance of overall program requirements. 

Beginning sometime in September 30, 2024, Social Security benefit receivers will no longer be penalized for third parties (e.g., family members, loved ones, trusts)  providing them with free food. According to Attorney Urbatsch this will result in an estimated $1.5 billion of SSI payments over the next decade. 

For SNT trustees, these two regulation changes means that you may now pay for 100 percent of the beneficiaries food and most of their rent without risking SSI penalty. 

In the case of the rental subsidy policy, Attorney Urbatsch recommends that the SSI recipient pays the PMV amount each month ($334.33)  as part of their rental agreement, plus any agreed upon utilities. A special needs trust can then pay for food and the rental balance without it impacting the recipient’s benefits. If the SSI recipient also has an ABLE account, the account can pay for utilities without penalty.  

At Prudent Investors, it is important that we stay abreast of policies and changes that will affect fiduciaries and special needs trust beneficiaries.  We’ve found the Special Needs Planning Symposium organized by attorney Kevin Urbatsch to be a wonderful resource and recommend that family members with special needs or trustees that work with special needs trust consider attending.


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Jared Ong

Jared Ong oversees portfolio management, trading and technology. He previously worked at the Capital Group as a business systems analyst where he was integral in improving the trade operations group’s equity, fixed income, and foreign exchange trade processes. A graduate from Brigham Young University, Jared holds a Bachelors in Music. In his spare time, he enjoys composing and arranging music.