Neither SSI nor Medicaid determine eligibility by comparing a persons total income and resources to the dollar thresholds that apply in the persons eligibility category. Rather, they count only certain types and amounts. (This practice has a close counterpart in income tax rules, which exempt certain types or amounts of income from taxation and allow certain types or amounts to be deducted from otherwise taxable income.) For this reason, an individual can have total income or resources higher than the nominal eligibility limits (i.e., higher than $674 per month in total income or $2,000 in total resources for SSI) and still qualify for benefits.
The general income rule for SSI specifies the level of countable income at or below which an individual is financially eligible for benefits. Countable income includes cash income plus certain in-kind goods or services that an individual receives in a given month, minus certain types of exempted income (discussed more fully below). In the year 2010, the maximum monthly SSI benefit paid to people with no other income is $674 for an individual and $1,011 for a couple. Persons with income from other sources (e.g., Social Security or a pension) receive a lesser amount--equal to the difference between the full SSI benefit rate and the amount of their countable income from other sources after adjustments for income exclusions. For example, the SSI benefit for an individual with Social Security or pension income of $600 a month would be only $94 per month ($600 minus a $20 disregard on unearned income equals $580, which is deducted from the SSI maximum monthly benefit of $674).
Basic Medicaid Eligibility Rules
SSI rules reduce a persons gross income to get countable income in three important ways. First, SSI disregards the first $20 of every applicant/recipients unearned income. Second--and of great significance to people with disabilities who work--SSI provides a disregard of earnings from work, amounting to the first $65 ($85 if the person has no other income in a month) plus one-half of the remaining earnings amount.9 However, if earnings exceed $1,000 a month in 2010 then the individual is considered to be engaging in Substantial Gainful Activity, and thus does not meet the statutory definition of being disabled.10 Since the individual is not considered to be disabled, he or she will probably have their SSI eligibility denied or terminated. However, there are exceptions to this rule, which are discussed below under Reducing Employment Barriers for Persons with Disabilities.
Third, spouses or children with disabilities in families with other members who are ineligible can qualify for SSI at higher gross amounts of family income, because SSI counts only the portion of the non-disabled spouses or parents income that is left after SSI subtracts amounts used to pay for the basic needs of non-disabled family members. (SSI may apply several other special-purpose reductions also.)
The general rule defines countable resources as cash or other property, including real property, that (a) were acquired some time in the past, (b) the individual has the right to access, and (c) could be converted to cash and used to pay for current basic living needs. Individuals with up to $2,000 ($3,000 for a couple) in countable resources can qualify for SSI. When determining whether resources are below the SSI $2,000/$3,000 thresholds, SSI rules reduce gross resources by exempting the home (regardless of value) and (within limits) such things as an automobile, household goods, surrender value of life insurance, burial funds, and property essential to self-support. States often use SSI resource limits when determining eligibility for Medicaid.