Social Security attributes some of parents’ income to children for the purpose of deciding SSI eligibility in a process called “deeming.”
Social Security will deem parental income to the child if the child is under age 18 and either lives in the home with a natural or adoptive parent or is in the parent’s control, even though the child may be away at school. Social Security will also count stepparent’s income if the stepparent lives in the same home with the child and a natural or adoptive parent.
Social Security has a complicated formula for deeming parental income to children. Assessing whether a child is financially eligible for SSI is done on a monthly basis.
First, Social Security totals up all of the parents’ gross earned and unearned income. Social Security will not count certain kinds of income. Examples of non-countable income are food stamps, welfare payments, and income tax refunds.
Then, Social Security deducts $375 per month for each nondisabled child, first from unearned income, until none remains, and then from earned income (wages). The deduction amount can change every year because it represents the difference between the federal benefit rate (the federal SSI amount) for individuals and couples. (For 2018, the couples' benefit rate is $1,125, minus the individual benefit rate of $750, for a deduction amount of $375 per non-disabled child.)
Next, Social Security takes a $20 deduction from the parents' unearned income, or, if there is no more unearned income, from their earned income. Then, Social Security deducts $65 from the parent's earned income and reduces the remaining total of earned income by half. Social Security then reduces the resulting combined total of earned and unearned parental income by the federal SSI benefit rate ($750) for an individual if the child lives with only one parent, or the rate for a couple ($1,125) if the child lives with both parents or one parent and a stepparent.
If there is only one disabled child in the household, Social Security deems the remaining total countable income to the one child. If there is more than one disabled child receiving SSI, Social Security divides the total countable income and deems it equally among the children.
Social Security treats deemed income as unearned income to the child during its calculations. To figure out how much SSI is due to a child with deemed income, Social Security has perform a separate income calculation for the child. If the child has no earned income of his/her own, Social Security simply calculates the amount of the child’s SSI benefit by taking the parent's deemed income, subtracting the $20 deduction, and then subtracting this amount from the current maximum monthly SSI amount ($750, in a state that doesn't supplement SSI). The balance is the amount of SSI the child will receive each month.
If the household receives child support on behalf of the disabled child, Social Security treats it as unearned income received by the child, but only counts two-thirds of the total monthly support as countable income. Also, Social Security only looks at child support that is actually received, so if the non-custodial parent fails to pay support, it will not have any effect on the child’s SSI benefit.
For more information, see our overview of how Social Security calculates SSI payments.
For children who are over 18, no income deeming occurs, but if the child lives with his or her parents rent-free, Social Security will assume that the child is getting free rent and board and can decrease the child's SSI benefit by one-third. For this reason, some parents charge their children rent and/or board. For more information, see our article on "in-kind income."