Many trust beneficiaries ask if their Special Needs Trust can pay for rent. The answer is maybe. Not too helpful, right? But really it all depends on the benefits you are receiving. (See our blog on the “Basics of Benefits.”) The Social Security Administration (SSA) has issued a list of ten expenses referred to as “shelter” costs. They are as follows:
- Mortgage Payment
- Gargabe Removal
- Real Property Taxes
- Rent (Room and Board)
- Gas/Heating Fuel
- Property Insurance (if the insurance is required by mortgage)
If you are receiving Social Security Disability Insurance (SSDI), there are few restrictions on trusts paying shelter costs. We will work together to create a budget based on your personal income and trust assets. From there we can determine what, if any, shelter costs the trust will pay. However, if you are receiving Supplemental Security Income (SSI), the trust cannot pay shelter expenses without an impact on your benefits. Generally, your SSI will reduced by 1/3 (currently that reduction would be about $280.00-$305.00) if the trust pays your rent. According to the SSA, your SSI is earmarked for shelter. The idea is that if you are receiving help with your rent from another source (like a family member, a friend or your trust) then you must not need your entire SSI. That current benefit is $841.00-$914.00 per month. I don’t know about you, but I sure cannot find rent for that amount. Oh and then you also have to pay your electric bill, water, phone and internet. So, there are many instances where it makes sense for you to take a reduced SSI amount and allow the trust to pay shelter costs.