A. When an AFDC recipient receives a large lump sum for Social Security (or most other sources) the family will be disqualified from AFDC for a number of months. (An exception to the lump sum rule is SSI benefits. A lump sum SSI payment will not affect the recipient's family's entitlement to AFDC.) The period of time your family will be disqualified from AFDC is calculated by dividing the amount of the lump sum by your family's AFDC standard of need.
Example: You receive a lump sum of $13,000 from Social Security. The AFDC monthly standard of need for a family of four is $866. Thus, your family will be ineligible for AFDC for 15 months. ($13,000 divided by $866/month equals 15 months plus $10 left over which will be treated as income in the 16th month.)
To avoid the harsh consequences of the AFDC lump sum rule, get off AFDC the month before the lump sum is received. If you do this, then once you spend the lump sum down below the AFDC resource level, you can reapply and again qualify for AFDC. If you receive an AFDC check the same calendar month you receive the Social Security lump sum, the lump sum rule will apply to you. Since it is difficulty to know when you will receive your Social Security lump sum check you may have to get off AFDC more than one month in advance. The benefits to you from temporarily getting of AFDC can be significant. Using the number from the example above, rather than being ineligible for AFDC for 15 months, you may reapply for AFDC the month after you spend your lump sum award. If you spend your award quickly (by paying off debts, for example) you may be off AFDC for as little as one or two months.
Q. I am disabled and will soon move in with my uncle because I cannot afford to live on my own. My uncle will be paying the rent. If I receive SSI benefits, will the fact that I live with my uncle affect how much I get?
A. Yes. Under Social Security rules you will be receiving in-kind
support and maintenance from your uncle. Your monthly SSI benefits will
be reduced by the value of what you are receiving - in this case free rent
and possibly food if your uncle pays for that also. As long as the support
you are receiving is food and/or shelter, however, the maximum amount Social
Security will reduce your benefits is one-third of the federal portion
of your SSI check ($153.23 in 1996). If you agree to repay the rent when
you can afford to do so (usually this would be when you receive your lump
sum SSI retroactive payment), make sure you inform Social Security of this
agreement when you receive your favorable decision. Social Security will
then pay you, even for past months, at the full SSI rate provided the rent
you have agreed on is a fair market rent and a rent you can afford on a
SSI income. The repayment agreement does not have to be in writing, though
it is advisable to put it in writing signed by both you and your uncle
at the time you move in.