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How does the One-Third Reduction Provision affect SSI benefits?

As people in Tennessee may be aware, the purpose of the Social Security Administration's Supplemental Security Program is to support those people who have limited resources and are unable to work because of their disability, blindness or advanced age. The SSA may also grant SSI benefits to certain disabled and blind children. In all cases, the SSI benefits are determined based on the applicant's existing income.

In order to ensure that an SSI benefits recipient does not receive more than what is required, the SSA monitors an applicant's earnings closely and it makes certain adjustments and reductions from time to time. The SSA does that to keep expenses under control, as the SSI program is funded by money that the government collects from personal income taxes, corporate taxes and other similar taxes.

One provision that the SSA uses often is known as the One-Third Reduction Provision. This provision is applicable to those recipients of SSI benefits who have lived in another person's household for an entire month without contributing to the expenses for food and shelter of that household. If that is the situation, the SSA applies the One-Third Reduction Provision and reduces the beneficiary's SSI benefits by 33 percent.

According to current rules, the SSA requires a recipient of SSI benefits to communicate the change of residence within 10 days. In addition to the information about the change of address, the SSA also requires the SSI benefits recipient to communicate about any financial contributions made by the recipient to that household. Moreover, the SSA also requires the recipient of SSI benefits to communicate how many people are living in that new household and who pays for the household's food.

However, there are certain circumstances under which the One-Third Reduction Provision is not applicable. For example, if an SSI benefits recipient moves in with a family of four and starts contributing 20 percent of the monthly household expenses, the provision will not apply.

SSI recipients and applicants should understand the One-Third Reduction and all other provisions that could affect their eligibility or benefits amount.

Source: SocialSecurity.gov, "SSI Spotlight on the One-Third Reduction Provision -- 2015 Edition," Accessed on Aug. 17, 2015

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