Child Support and Alimony Payments - What you Need to Know
We are often asked about what happens to SSI benefits when there may be child support or alimony involved with a Special Needs Trust. We hope you find this blog post helpful and a good resource to reference when you are advising your clients.
When a child is receiving Supplemental Security Income
(SSI) benefits and the custodial parent is receiving child support (including
arrearage payments) from a non-custodial parent, Social Security counts the
support as unearned income to the child. (SI 00830.420(B)(1)).
Similarly, when an SSI recipient receives alimony or
spousal support, Social Security counts the support as unearned income to the
SSI recipient. (SI
00830.418B). Each dollar of unearned income (after a general disregard of
$20) will reduce the recipient’s monthly SSI amount by a dollar. If the monthly
child support, alimony or spousal support is great enough, it could completely
eliminate the recipient’s monthly SSI check.
SSI recipients and their attorneys should know that
there is a way to use a Pooled Special Needs trust to receive child support,
alimony or spousal support that allows the SSI recipient to receive the support
without reducing the monthly SSI check.
Specifically, SI
01120.201(J)(1)(d) states “A
legally assignable payment to a trust or trustee is income for SSI
purposes, unless the assignment is irrevocable. If the
assignment is revocable, the payment is income to the individual legally
entitled or eligible to receive the payment. For example, child support or
alimony payments paid directly to a trust or trustee because of a court order
are considered irrevocably assigned and thus not income.”
Feel free to contact
our office today if you think your client can benefit from a Special Needs
Trust.
Kole. J. LongElder Law AttorneyCo-Trustees, Guardian Trusts
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