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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