Benefits Highlights

Application of Parent-to-Child Deeming Rules for SSI recipients under age 18.

When SSA determines the eligibility and amount of payment for an SSI recipient, the income and resources of people responsible for the recipient’s welfare are also considered. This concept is called “deeming” and is based on the idea that those who have a responsibility for one another share their income and resources. Since SSI is a means-tested program, the portion of parental income/resources shared with the child is “deemed” by Social Security as being available to that child for the purposes of SSI eligibility and when calculating the amount of the SSI payment. Determining how much of the parental income or resources to count against the child is called “parent-to-child deeming”. It does not matter if money is actually provided to an SSI eligible child for deeming to apply.

Families of school-aged children with disabilities really struggle with the concept of parent-to-child deeming. Deeming rules and calculations seem inscrutable to families and are often perceived as “unfair” since they cause so many children with severe disabilities to be ineligible for both SSI cash payments and Medicaid coverage. Since deeming rules are so complex, school personnel, VR staff and even Benefits Specialists are often at a loss to explain the deeming process in a way that is understandable. Parents end up feeling frustrated and powerless. This sense of helplessness contributes to the fear of benefit loss and aversion to the potential risks of paid employment.

Strategies for Success

1. While parent-to-child deeming is certainly complex, the general rules are not beyond the understanding of the average layperson. It is true that Benefits Specialists cannot determine the exact amount of parental income or resources deemed to a child, but a trained Benefits Specialist can explain broad deeming concepts and how the process works. The most important message to pass along to parents is that not all income or resources count – there are myriad deductions and exclusions. Parents should never assume their child is ineligible without completing the application process, nor assume that ineligibility is a permanent condition. Only the Social Security Administration can determine how much parental income is actually deemed.

2. Deemed income from a parent to an eligible child is treated like unearned income when determining the SSI payment amount. For this reason, children with deemed income have a lower “break-even point”. The break-even point is the point at which total countable income causes the SSI cash payment to be reduced to zero. Benefits Specialists must discuss this effect with parents, but should always point out that use of work incentives such as the Student Earned Income Exclusion in combination with the general and earned income exclusions and the SSI one-for-two reduction often causes earned income to be completely disregarded. Students receiving SSI always come out ahead by working.

3. Benefits Specialists must also remember that since deemed parental income is counted as a particular type of unearned income for SSI, it may be used to fund a Plan for Achieving Self-Support (PASS). PASS is a work incentive under which individuals with disabilities may set aside income and/or resources to be used to achieve a specific occupational goal. A PASS can be established to cover the costs of education, training, starting a business, or buying support services and equipment needed to work. Funds set aside in an approved PASS do not count when determining SSI eligibility or SSI payment amounts. A student with deemed parental income actually has an advantage when it comes to writing a PASS since he/she has income and/or resources to set aside in the PASS without even going to work. For students under age 22 without any unearned income (such as deemed income from the parents), a PASS can be difficult to use since most if not all earned income will be already be excluded by the student earned income exclusion.

Using deemed income in a PASS is not difficult. Simply verify the amount of income SSA has determined to be deemed and have the parent(s) contribute that amount of income into the PASS account each month. Deemed resources may be treated in the same manner. Rather than viewing parental deemed income as a thing to be avoided, Benefits Specialists need to see it as a potential opportunity to help students achieve long-term career goals. Keep in mind that a Plan for Achieving Self Support may also be used to help a student become initially eligible for SSI. If deemed income has precluded eligibility in the past, this income can be set aside in a PASS and thus disregarded during the SSI eligibility determination. Assuming all other SSI eligibility criteria are met, Benefits Specialists can use work incentives to reduce countable income and/or resources, thus allowing the student to receive SSI and Medicaid.

To learn more about the specifics of Parent-to-Child Deeming, read the VCU BARC Parent-to-Child Deeming Briefing Paper, Vol 3.2, July, 2002. This document can be used very effectively to train parents as well as school personnel on key deeming concepts.