SSI and Claiming As Dependent

[shelties2]

My 18-year-old son has autism and we are hoping that he will soon start receiving SSI. I am very confused about charging him rent or room and board. I do not know how much we should charge him, and I am also concerned about this affecting our ability to claim him as a dependent. We need to keep him as a dependent for some other insurance benefits. I really need some advice on this. We live in Florida.

[Mr. Knowitall]

I suggest that you meet with a local lawyer who handles special needs planning issues, not just in relation to the short-term issue of charging rent, but in relation to longer-term issues of dependency, setting up a special needs trust, inheritance, etc.

[shelties2]

We are working on long-term planning, but I need some advice on the immediate issue of rent or room and board. My son has been medically approved, so once he gets financial approval we will need to address the rent issue so he can get the full SSI amount. I have no idea how to go about figuring out an amount to charge him.

[Janke]

SSA will ask you how much your household spends on the following bills (average per month); food, rent or mortgage(s) payment, property taxes and property insurance (if there is a mortgage), heating fuel, electricity, gas, water, sewer, garbage and get a monthly total. These are the basic necessities for food and shelter. The total is divided by the number of people living in the house, regardless of age or consumption. So, if the average monthly household expenses are $2100 and there are three people in the house, his contribution would need to be $700 in order to be paying his pro-rata share. If there were 7 people in the same house, is contribution would need to be $300 in order to be paying his pro-rata share. It is the receipt of free food and/or shelter that affects the SSI benefits. However, in a higher mortgage home, it may be impossible for an SSI recipient to be paying his pro-rata share and the SSI may never be increased.

SSA will also ask you for the effective date. So, if his contribution began in 9/09 and it is the pro-rata share, SSI would probably increase in 11/09, 2 months later.

You as the householder and the payee would have to complete a form giving the amounts. Probably best to do it all in person at an SSA office.

[Janke]

You should read the IRS publications about the types of expenses that you can provide for your son that may allow you to meet the 1/2 support requirement for claiming him as a dependent. If he is contributing to household shelter expenses, you can't say that you are paying his support for those expenses, but the IRS may allow for other types of expenses in order for you to claim him as a dependent.

I would keep good records. SSI will care about payment toward food and shelter and how much is for personal needs from the SSI check. The IRS may or may not ask you to prove the dependency, but you should keep those records too.