How Child Support Payments Affect your Supplemental Security Income Benefits

There are many hardworking, single, divorced parents living in Florida. In a 2010 list of the 50 cities with the worst divorce rates, Florida had four cities in the top ten, with Panama City taking the number one spot with a 2009 divorce rate of 4.3 percent, the second highest in the nation. Deltona, Palm Bay and Jacksonville also made the top ten, and Miami ranked 26 on the list with a 2009 divorce rate of 2.8 percent and Bradenton and Orlando close behind.

Divorced parents of children otherwise eligible for Supplemental Security Income (SSI) benefits should be aware that the Social Security Administration considers a substantial percentage of child support payments as income for purposes of calculating SSI benefits. SSI provides monetary benefits to people with disabilities based on their limited income and assets. Therefore, even small increases in income, such as child support payments, will affect the amount a person is eligible to receive as SSI benefits. The child support payments may also affect eligibility for Medicaid benefits.

Under current law, the Social Security Administration excludes one-third of child support payments received each month by the custodial parent on behalf of the child from countable income in determining the SSI payment. This means that two-thirds of the monthly child support payment will be counted as income and will offset or eliminate eligibility for SSI benefits.

The current law creates a disincentive for the non-custodial parent to agree to pay child support, and for the custodial parent vigorously to pursue it. In some cases, it may be advisable to create a special needs trust for the child’s benefit legally to shelter the child support payments and allow the child to retain SSI benefits. When the child is already receiving SSI benefits prior to the divorce, before reaching any child support settlement, the potential impact on the child’s current SSI benefits should be taken into account.

Unfortunately, none of these options are without complications and should not be undertaken without first consulting with an experienced SSI attorney. We are committed to helping parents get the benefits they are entitled to by law to care for their children.

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