Will I Lose My SSI Benefits If I Sell My Home?
An important feature of the Supplemental Security Income program is the ability to retain ownership of a home used as your primary or principal residence. Its value does not get included as a resource to determine if you qualify for SSI benefits. If you decide to sell your home, you need to talk to a New Jersey SSI attorney to discuss options that do not jeopardize your benefits.
What is SSI?
SSI pays benefits to adults and children who are blind or disabled. Another way to qualify for benefits is to be 65 years old or older regardless of disability status. The purpose of the program is to provide monthly payments to aged, blind, or disabled individuals to assist them to pay for food, clothing, and shelter.
How to get SSI benefits
You must complete an application that shows you meet the requirements to qualify for benefits. In addition to meeting the age or disability requirements, other eligibility rules that apply include the following:
- Your income and resources must be limited. The value of resources for an individual cannot exceed $2,000 and $3,000 for a couple.
- You must be a U.S. citizen or national. Aliens may qualify provided they fall into one of the categories used by Social Security. An SSI attorney can offer more information to help determine if you qualify as an eligible category of alien.
- You must reside in the United States or the Northern Mariana Islands.
Social Security checks to verify that you do not exceed the resource limits. The value of the following resources counts toward the $2,000 or $3,000 limits:
- Money on deposit at financial institutions, including banks.
- Cash on hand.
- Real estate.
- Personal property.
- Cars, trucks, and other types of motor vehicles.
- Cash value of life insurance policies.
Anything of value that can be used to pay for food, clothing, and shelter counts toward the resource limits, including help received from friends or relatives. If a family member lets you stay for free in their home, the value of the rent you should have paid counts as a resource.
One of the more notable exceptions to the resource rules is the ownership of a home that you live in as your principal residence. Its value does not count toward the resource limits, but you must comply with specific guidelines for occupancy.
SSI rules to know about a principal residence
You may exclude the value of a home and the land on which it is built from countable resources to qualify for SSI as long as it serves as your principal place of residence. A common occurrence is for recipients of SSI to require an increased level of care requiring them to leave their home and reside in a nursing home or an institution. Should this occur, the home retains its status as an excluded resource as long as it continues to be used as the principal residence of their spouse or dependent relative, such as a child.
If you receive SSI benefits and leave your home in response to domestic abuse, the home retains its status as an excluded resource regardless of whether or not you intend to return and continue to live there. Social Security continues to treat the home as excluded until you establish a new principal residence.
What happens to SSI benefits when a home is sold?
You have three months from the date that you receive the money from the sale of a principal residence to purchase another home to use for the same purpose. The money invested from the old home into a new one is treated as the conversion of a resource that does not affect payments received from SSI.
Any money received from the sale that does not go into the purchase of a new principal residence within three months becomes a countable resource. Social Security includes it when calculating whether or not you exceed resource limits of $2,000 for one person and $3,000 for a couple.
If you sell an excluded home to a buyer in exchange for a promissory note instead of receiving all of the proceeds at the time of sale, the rules about reinvesting the money into another principal residence remain the same. The only difference is that payments made to you by the buyer under the terms of the promissory note must be invested in your new residence within three months of receipt of each of the installments.
Speak with an SSI attorney before selling a home
Unless you comply with complex federal regulations when selling a home used as a principal residence, it can affect the payments you receive from SSI. A skilled and knowledgeable New Jersey SSI attorney guiding you through the process avoids mistakes from being unfamiliar with the rules and procedures that can jeopardize your SSI benefits.