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  1. #1

    Default How to Determine Fair Rent for an Adult Child Who Gets SSI

    Hello everyone. I hope this is not a duplicate. I just typed this post...and lost it when I was almost done. Okay, my 18-year-old daughter was just approved for SSI. She has an autism diagnosis and lives at home. She will not be paying her fair share of the household expenses because our mortgage is high and she would lose 1/3 of her potential SSI amount. Instead, I am preparing a rental agreement. I have researched the FMV for rentals in my area and also researched my county on the HUD website to see what they consider FMV. The amount is between $350-$450. She will be paying for her own food. I would like to separate out the utilities from the amount of rent for the room. I am not quite sure how to do this? Do I need to determine the FMV of the utilities for that room? That would be difficult. Can I state on the rental agreement that the rent amount is $350 and utilities will be an additional $50 per month for a total of $400. I am concerned that they are going to ask me how I arrived at the amount for the utilities. If anyone has any thoughts on how to do this and how much I should charge for utilities, I would be very grateful if you would post your thoughts. Thank you.

  2. #2
    Join Date
    Jan 2006
    Posts
    38,726

    Default Re: Living Arrangement - Rental Agreement

    Why are you going to that trouble if, as you said, she is not going to pay her fair share of the household expenses? Are you suggesting you would commit fraud and claim she is paying her own expenses so her benefits won’t be reduced due to you providing her with housing?

  3. #3

    Default Re: Living Arrangement - Rental Agreement

    Maybe I didn't express myself correctly. I would never commit fraud. I will not be providing her with free housing. I will be charging her a monthly amount of rent comparable to similar rentals in my area because she cannot afford to pay 1/4 of the household expenses. Instead, I will charge her what I would charge anyone else who I rented to.

    There are 2 ways to calculate the rent (or room and board). One is to have the individual pay their fair share of the living expenses. The second is to use a rental agreement and charge the fair market value of the rental. I found all of this information on the SSA website. In addition, here is a link to a site that provides information to people like me who have no idea how this works. https://howtogeton.wordpress.com/201...to-pay-on-ssi/. You will find both options there.

    The only information I could not find on the SSA or wordpress website (or anywhere else) was how to figure out an amount for utilities. I do not want to commit fraud which is why I am asking the question. I don't want to just choose an arbitrary amount--that would be fraud.

    Have a wonderful evening.

    And here is the HUD website that provides the FMV by state and county. https://www.huduser.gov/portal/datas...ta_summary.odn. You will see the FMV for apartments ranging from an efficiency to a four bedroom. Sorry if I didn't present this properly.

  4. #4
    Join Date
    Jun 2014
    Posts
    3,045

    Default Re: Living Arrangement - Rental Agreement

    Add the mortgage, power, gas, water, sewerage, trash pickup and food. Divide that amount by the number of people living in the home. That amount is her fair share.

    If she does not pay her fair share of living expenses. Her SSI will be reduced by 1/3.

  5. #5

    Default Re: Living Arrangement - Rental Agreement

    Okay, thank you very much for the help.

  6. #6
    Join Date
    Jan 2009
    Location
    California
    Posts
    1,036

    Default Re: Living Arrangement - Rental Agreement

    Room rental is a valid option. Check out the link below for policy and proof required. The link is the exact rules that SSI is supposed to follow.

    https://secure.ssa.gov/apps10/poms.nsf/lnx/0500835120


    But because you are the parent of the SSI recipient, additional questions about FMV need to be documented. Per policy below.

    https://secure.ssa.gov/apps10/poms.nsf/lnx/0500835380


    The bulk of the proof required is your signed statement, under penalty of perjury language, that this is your daughter's situation. Although it should (not required but a good idea) be a corresponding check or electronic transfer of that amount of money each month from her account to yours.

    Don't overthink it. You came up with a number that is the same that you would charge a non-family member for the same accommodation. That is CMRV, Current Market Rental Value. Now, with the way SSI computes benefits (Retrospective Monthly Accounting), it is likely that the increase due to paying CMRV in a room rental situation would happen two months after the rent payment began.

    It is actually very normal and a correct use of SSI benefits to pay for room rent and or a share of household expenses and the computation of ISM (in-kind support and maintenance AKA the 1/3 reduction) is a complicated set of questions about the minutia of the cost of living alone vs. the cost of living with others. And if your family and friends are providing part of the cost of your food and shelter, you get less help from the government, less SSI benefits; but only while you are in that free food and shelter situation.

    There have been studies and suggestions to remove ISM from the law, but the arguments against point out that it will not be income neutral; removing ISM ends up paying out more SSI overall that is gained from simplification.

    As long as ISM is part of the system, it is best to just go along with the flow and not attempt to make logical sense of it all the time. IMO.

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