Utilizing Social Security and SSI Benefits for Assisted Living
We may earn a commission if you make a purchase through one of our links. McClatchy newsrooms were not involved in the creation of this content.
When seniors need more help with activities of daily living than an at-home caregiver can provide, it may be time to move into an assisted living community. This can be expensive, especially for seniors with limited resources who rely on Social Security to make ends meet. Social Security and Supplemental Security Income benefits can help with some of the costs of assisted living, but many of the more than 71 million American seniors who count on these benefits may not understand how to fully utilize them.
This article gives an overview of SS/SSI benefits for seniors. It explains how these programs help with assisted living costs, lists hidden benefits you might qualify for, and offers tips to maximize Social Security for comfortable assisted living when it’s needed most.
Understanding Social Security Benefits
Social Security benefits are managed by the federal Social Security Administration and are available to all eligible U.S. citizens and permanent legal residents. These benefits are divided into four main categories:
Retirement Benefits
The main and fundamental offering from SSA is retirement pensions for enrolled seniors. Depending on your work history, you could be eligible for monthly support upon reaching retirement age, which ranges from 62 to 67. In 2023, the average monthly check is $1,701.62, with a maximum benefit of $4,555. SSA employs a complex formula to determine most seniors’ benefits eligibility, and the amounts can change slightly each year.
Survivor Benefits
Surviving spouses, divorced spouses and dependent children may qualify for survivor benefits when a Social Security beneficiary passes away. In addition, the SSA can pay out a one-time death benefit of $255 within two years of a person’s death.
Disability Benefits
If you’re unable to work due to a medical disability, you might be eligible for disability benefits. In 2023, the highest SSDI benefit is $3,627 per month. To qualify, you need a work history and a medical diagnosis of a lasting or lifelong disability.
Supplemental Security Income
SSI helps low-income adults who aren’t eligible for SSDI due to disabilities. In 2023, the maximum amount SSI pays is $914 a month for singles and $1,371 for couples. In 45 states, SSI recipients may also receive varying monthly state supplements.
Who Is Eligible for Social Security?
If you’re a citizen or legal resident of the United States and have reached retirement age, you need 40 lifetime work credits to qualify for Social Security benefits. You can earn these credits from your own employment or that of your spouse.
In 2023, you receive a credit for each $1,640 earned and taxed, maxing at four per year. For most, 10 years of consistent work is plenty to meet this history requirement. After collecting all 40 credits, your benefits are calculated based on earnings and age.
What Is Supplemental Security Income and Who Is Eligible?
Social Security and Supplemental Security income are both part of SSA, which can be confusing due to their shared application. However, unlike Social Security retirement benefits, SSI is based on assets and income, not work history. In 2023, SSI has a $1,000 monthly income limit, permitting $2,000 in assets for singles and $3,000 for couples. Your benefits aren’t linked to your work history but may change with your income. You can calculate your benefit by starting with the max SSI of $914 and subtracting countable income, which falls into four categories:
Earned income (wages)
Unearned income (pensions, dividends, VA and SSA benefits)
In-kind income (food, housing and other non cash benefits you get for less than market value, not counting SNAP or Medicaid)
Deemed income (income shared with a housemate or caregiver)
Calculating your countable income can be tricky. The initial $20 of any income doesn’t count. If your income comes from a job, the first $65 a month is exempt, and half of what follows. The remaining amount is subtracted from $914 to determine your SSI award. For instance, if you get $1,000 monthly from Social Security and $500 from part-time work, your SSI calculation would be:
$500 unearned income, minus the first $20 = $480
$500 earned income, minus the first $65 = $435, of which only half is countable = $217.50
$480 + $217.50 = $697.50 countable income
$914 - $697.50 = $216.50 monthly SSI award
Does Social Security or SSI/SSDI Pay for Assisted Living?
Social Security and SSI/SSDI do not directly pay assisted living communities, but they do directly pay you and you’re free to use the funds however you wish. Many seniors set up direct deposits for their benefits to pay monthly bills. However, with the average cost of assisted living nationwide being $4,500 a month, most seniors need additional income to pay for their care.
How to Maximize Your Social Security and SSI Benefits for Assisted Living
If you’re not receiving the full Social Security and SSI benefits, it’s worth trying to maximize your award amount. This is especially important for seniors budgeting for assisted living with a fixed income. Retiring at the right time is one of the most effective ways to maximize your monthly benefits.
Retire early at 62 and you could get up to 30% less. On the other hand, waiting past your full retirement age (which varies by birth year) means higher monthly payments. Born before 1960? You hit full retirement during the year you turn age 66. After 1960? Your full retirement age is 67. Either way, your final benefit will increase by 8% for each year you keep working beyond full retirement, up until age 70. So, if you’re born after 1960 and work until 70, you can get your regular benefit plus up to 24% extra.
To maximize SSI benefits, aim to lower countable income. The SSA counts only half of earned income, but fully counts other incomes like noncash items. Adjusting the source of monthly earnings can also increase SSI. For example, selling crafts from a hobby business has a more favorable impact on SSI than pension or Social Security benefits. While the top SSI payment is $914, achieving this with $65 or less of countable income is possible. Every little bit helps, as earnings count more than other income types.
Overall, the amount you receive in SSI/SSDI each month is influenced by various factors. Here are four other ways to up your entitled payment amount:
State Supplements
Several states will supplement your SSI with a state-level supplement of their own. This can make a big difference for many seniors, depending on the maximum benefit your state offers.
Cost of Living Adjustments (COLA)
The SSA uses the national Consumer Price Index to adjust benefits upward to keep pace with inflation. You don’t have to do anything to qualify for a COLA, since your benefits will automatically increase with each annual review.
Work at Least 35 Years
The SSA calculates your benefit using your top 35 earning years. If you worked fewer years, they use your whole work history. Working beyond 35 years lessens the effect of low-earning years, maximizing your lifetime earnings.
Hire an Attorney to Review Your Application
Maximizing benefits hinges on providing accurate info in your first application. Benefit law experts and local senior law services can spot errors, upping your benefits.
The Bottom Line
Social Security is an indispensable support for millions of seniors, especially for those dealing with the cost of assisted living. Though Social Security benefits may not be enough to fully cover the cost of senior care, they can be the bedrock of your senior care financing strategy. By working to maximize benefits, combining programs and making use of supplements where they’re available, you may be able to use your Social Security benefits to pay for the senior care you need.
Rachel Lustbader is a writer and editor with a decade of experience working in and writing about health care, the last five of which she has focused on senior health and senior living. Before joining Caring.com, Rachel worked with websites including HealthCare.com, BiteSizeBio.com, MedicareGuide.com, and BetterHelp.com. She studied health science as an undergraduate at Boston University and continued her education in health communication at BU in 2019. She can be reached at editorial@caring.com.
