Supplemental Security Income is a federal cash benefit for individuals in New Jersey who are blind, disabled, or aged 65 and older and who have very limited income and resources. The Social Security Administration administers this program using general tax revenues rather than payroll taxes, meaning your eligibility depends on financial need instead of your work history. This program provides long-term financial support that your child with special needs may depend on well into adulthood, but strict financial thresholds mean a single mistake with assets can put this benefit at risk.
The Matus Law Group works closely with you to fit these benefits into your broader financial planning. Our team of special needs trust attorneys in New Jersey takes the time to walk you through eligibility rules, resource limits, and the steps you can take to safeguard these funds for your child. We help you create tailored legal strategies like a special needs trust to protect public benefits while still providing supplemental financial support to your loved one.
This guide explains how this program differs from standard Social Security and details the specific income and resource limits that apply to your situation. You will learn how the government treats homes, life insurance, investments, and retirement accounts when determining eligibility and what can cause a loss of benefits. We also explain how a special needs trust preserves this support while providing for your family. Contact The Matus Law Group today at (732) 785-4453 to schedule a consultation with the estate planning attorneys and secure your legal plan.
What Is SSI and How Does It Differ From Social Security?
Supplemental Security Income (SSI) is not the same as standard Social Security benefits. You can receive both at the same time, but the two programs operate differently.
Workers pay into Social Security throughout their careers, whereas the government funds SSI through general tax revenues to serve individuals who are blind, disabled, or over age 65. Under 42 U.S.C. Section 1382c, a disabled adult is someone with a medically determinable impairment that prevents substantial gainful activity and is expected to result in death or last for at least 12 months.
People often confuse Social Security Disability Insurance (SSDI) with SSI, but the government pays SSDI from your own earnings record and applies no asset limit. In contrast, the SSI program is means-tested and sets strict income and resource ceilings under 42 U.S.C. Section 1382. You or your adult disabled child can receive both programs at once when the SSDI payment falls below a certain threshold.
| Feature | SSI | Social Security (SSDI) |
|---|---|---|
| Funding source | General tax revenues | Payroll taxes paid by workers |
| Work history required | No | Yes, based on the worker’s earnings record |
| Income and resource limits | Yes, strict limits apply | No asset limit |
| Payment amount based on | Federal benefit rate reduced by countable income | The worker’s lifetime earnings record |
| Who it serves | Blind, disabled, or age 65+ with limited means | Insured workers and certain family members |
Who Qualifies for SSI Benefits in New Jersey?
People who are 65 and older who are living on restricted incomes can also qualify. Other requirements include:
- Being a U.S. citizen or a qualifying non-citizen
- Having limited income and resources
- Living in the U.S. permanently
- Not living in a government-funded institution
The restriction on government-funded institutions applies primarily to public hospitals, nursing homes, and prisons. The government does not automatically disqualify disabled adults from receiving SSI when they live in community-based group homes with live-in care.
Children under 18 qualify under a separate disability standard. The child must have a medically determinable impairment that causes marked and severe functional limitations and that has lasted, or is expected to last, at least 12 months. The Social Security Administration reviews medical records, school records, and statements from treating sources to evaluate these claims.
Key Takeaway: SSI eligibility rests on two separate tests. An applicant must meet the medical standard for blindness or disability, or be age 65 or older, and they must fall under strict financial limits on income and countable resources.
What Are SSI’s Income and Resource Limits?
SSI provides financial support to disabled children and adults who meet strict income and resource requirements. The Social Security Administration reviews both income and assets to determine eligibility, capping an applicant’s countable resources at $2,000 for an individual or $3,000 for a couple.
For children under 18, the government deems a portion of the parents’ assets to the child under 20 C.F.R. Section 416.1202. If the child lives in a single-parent household, the first $2,000 of the parent’s assets is exempt. If the child lives with both parents, up to $3,000 of their assets is exempt, and any amount over these limits is applied toward the child’s $2,000 personal resource limit.
The SSA considers a wide range of items as resources. These include cash, bank accounts, stocks, bonds, life insurance, land, vehicles, and any property or asset that can be sold for cash and used for support and maintenance. Deemed resources from parents also count toward the child’s total.
However, certain assets are exempt under 42 U.S.C. Section 1382b. A family’s primary residence and the land it sits on are not counted. Household goods, personal effects, burial plots, and life insurance policies with a face value of $1,500 or less are also excluded. Additionally, grants, scholarships, fellowships, or gifts used for education, certain trusts such as a supplemental needs trust, and property essential to self-support are not considered resources.
Recognizing these limits is important for families in Monmouth County and throughout New Jersey seeking SSI benefits. Careful planning and awareness of exemptions can make the difference in maintaining eligibility for necessary support.
Key Takeaway: The countable resource ceiling is $2,000 for an individual, and a portion of a parent’s assets is deemed to a child under 18. Deeming ends at age 18, meaning a young adult who was denied as a minor can qualify once parental resources no longer count against them.
How Does SSI Treat a Home, Life Insurance, or Investments?
Under 20 C.F.R. Section 416.1212, the government excludes your primary residence and the land it sits on as a resource regardless of its value. A second property, a vacation home, or a rental unit is a different matter and counts at its equity value unless it qualifies as property essential to self-support. One vehicle is excluded when it is used for transportation for the recipient or a member of the household.
Life insurance is counted by face value first. If the total face value of all policies owned on any one person is $1,500 or less, the policies are excluded entirely; if the total exceeds $1,500, the cash surrender value of those policies counts toward the resource limit. Term policies with no cash value are not counted as resources, which is why parents in Monmouth County often name a trust rather than the child as beneficiary of a larger policy.
Investments are treated as countable resources at their current market value. Stocks, bonds, mutual funds, certificates of deposit, and brokerage accounts count in full, but the dividends or interest they generate are excluded from income and instead simply increase the value of the countable resource over time. A custodial account opened for a child, including a Uniform Transfers to Minors Act (UTMA) account, becomes the child’s countable resource, which can end eligibility once the balance passes $2,000.
Key Takeaway: A primary residence and one vehicle are protected, but nearly every other asset counts against the limit. Life insurance is excluded only when the total face value on one person is $1,500 or less, while investment and custodial accounts count at their current market value.
Special Needs Trust Attorney in New Jersey – The Matus Law Group
Christine Matus, Esq.
Christine Matus, Esq., is the founder and owner of The Matus Law Group. She was admitted to the Bar of the State of New Jersey and to the U.S. District Court of New Jersey in 1995. She earned her Bachelor of Arts in Economics from Douglass College, Rutgers University, and received her J.D. from Touro College, Jacob D. Fuchsberg Law Center. Additionally, she studied International Criminal Law and Ethics at St. Anne’s College, Oxford University.
At The Matus Law Group, Ms. Matus assists clients with estate planning, real estate transactions, and setting up special needs trusts. She serves on the Attorney Arbitration Committee and as Board of Trustee Secretary of the Ocean County Bar Association, and regularly lectures on special needs planning and nonprofit regulations. A strong believer in giving back to her community, she is an active mediator with the Superior Court of New Jersey and dedicates time to pro bono work for local nonprofit organizations.
Do Retirement Accounts Count as SSI Resources?
A retirement account owned by an SSI applicant, such as an IRA or a 401(k), is a countable resource when the owner has the legal right to withdraw the funds. The government counts the amount available after any early withdrawal penalty rather than the gross balance. The account is excluded from countable resources if the plan prohibits withdrawals while the owner remains employed, and this exclusion lasts until that restriction ends.
The Social Security Administration treats money taken out of a retirement account differently from the account itself. A withdrawal or periodic payment counts as unearned income in the month it is received and becomes a countable resource the following month if the recipient still holds the funds. This timing is important since a single distribution can push a recipient over the income limit one month and the resource limit the next.
Parents also need to consider retirement accounts on their own side of the ledger. Naming a child with special needs as the beneficiary of an IRA can transfer a countable asset directly to that child, which is one of the more common ways a well-intentioned New Jersey estate plan disrupts SSI eligibility.
How Much Does SSI Pay in New Jersey?
The federal benefit rate sets the maximum monthly SSI payment before any reductions, and the government adjusts these rates each year based on changes in the Consumer Price Index. For 2026, the maximum federal rate is $994 per month for an eligible individual and $1,491 per month for an eligible couple, up from $967 and $1,450 in 2025.
Few recipients receive the full amount since the Social Security Administration subtracts countable income directly from the federal benefit rate. Receiving free shelter from someone else counts as in-kind support and maintenance and can reduce the payment as well. New Jersey residents can also receive a state supplement in addition to the federal payment, with the exact amount depending on the recipient’s living arrangement.
Key Takeaway: The 2026 federal benefit rate is $994 monthly for an individual and $1,491 for a couple. Countable income and free shelter reduce that figure, meaning the actual check a New Jersey recipient receives is often lower.
What Causes a Loss of SSI Benefits?
A recipient can lose SSI benefits for several reasons, such as displaying medical improvement or experiencing a change in financial status. People receiving SSI face a strict limit on how much income they can earn, and their countable assets cannot exceed $2,000.
These limits demand careful attention when you draft an estate plan to provide reliable financial support for your child. A recipient’s assets and income must stay below strict thresholds, meaning you can inadvertently disrupt their eligibility by directly leaving a special needs adult an asset with significant value like a home.
The same risk applies to an inheritance from a grandparent, a direct gift, a personal injury settlement, or a life insurance payout made directly to the beneficiary. The government can also stop benefits after a continuing disability review, a change in living arrangements, or a failure to report income and resources to the Social Security Administration.
How Can a Special Needs Trust Protect SSI in New Jersey?
A properly drafted special needs trust holds assets for the benefit of a person with disabilities without those assets counting as the beneficiary’s resources. The trust owns the property, the trustee controls distributions, and the beneficiary has no right to demand principal or income, which is why the Social Security Administration does not treat trust assets as available.
New Jersey Statutes Section 3B:31-37 dictates that the beneficiary has no control over the funds and prevents creditors from reaching the assets. This structure allows the trust to comply with federal rules that exclude it from counting against public benefit limits.
Families use one of three structures depending on whose money funds the trust:
- A third-party special needs trust funded with a parent’s or relative’s assets can receive an inheritance, life insurance proceeds, investment accounts, or retirement plan proceeds and does not require Medicaid payback.
- A first-party or self-settled trust under 42 U.S.C. Section 1396p(d)(4)(A) is funded with the beneficiary’s own money from a settlement or a direct inheritance and includes a Medicaid payback provision at death.
- A pooled trust administered by a nonprofit combines accounts from many beneficiaries for investment purposes while keeping a separate sub-account for each person.
Trust funds are meant to supplement what SSI and Medicaid already cover. A trustee can pay for therapies, education, transportation, adaptive equipment, travel, and recreation. Distributions of cash to the beneficiary or payments for shelter can reduce the monthly SSI payment. Families in Monmouth County frequently need guidance to coordinate the trust with beneficiary designations, a will, and any ABLE account. Families administering an established SNT can review our special-needs-trustee course overview.
Work With a Red Bank Special Needs Trust Attorney
Deciding how to provide for a child with special needs while keeping SSI intact involves rules that reach into your will, your beneficiary designations, and your retirement accounts. Getting this sequence right protects the public benefits and the money you intend to leave behind.
The Matus Law Group has more than two decades of experience helping families throughout New Jersey plan for a child or adult with disabilities. Our special needs trust attorneys serve clients across Monmouth County and the surrounding communities, and we can review your current plan to identify anything that may jeopardize eligibility.
Call The Matus Law Group at (732) 785-4453 or visit our office at 125 Half Mile Rd #201A, Red Bank, NJ 07701 to schedule a consultation. We look forward to assisting you and your family.
Frequently Asked Questions
Can my child receive both SSI and Social Security benefits?
Yes. A person can receive SSI and Social Security at the same time when the Social Security payment is low enough that the household still falls under the SSI income limits. The Social Security benefit counts as unearned income and reduces the SSI payment dollar for dollar after a small general income exclusion.
What happens to my child’s SSI when they turn 18?
Once a child reaches 18, the SSA no longer counts their parents’ income or assets against them, opening the door for eligibility if they were previously denied. The agency will also re-evaluate the individual’s medical condition under the adult rules to see if their impairment prevents them from working.
Does an inheritance disqualify my child from SSI?
An inheritance received directly by the beneficiary counts as income in the month it is received and as a resource afterward, which can suspend or terminate benefits. Directing the inheritance into a properly drafted special needs trust instead avoids that result.
Is the family home counted as a resource for SSI?
No. Your primary residence and the surrounding land do not count toward the resource limit. However, the Social Security Administration will count the equity value of any additional real estate you own, like a vacation house or rental property.
How much life insurance can an SSI recipient own?
The SSA ignores life insurance policies if the combined face value on a single person is $1,500 or less. If the amount goes over that cap, the policy’s cash surrender value applies directly to your $2,000 resource limit, which is why naming a special needs trust as the beneficiary is a safer planning strategy.
Can a special needs trust pay for anything the beneficiary wants?
Trustees have the authority to cover supplemental expenses like medical therapies, schooling, modified vehicles, and leisure activities. However, giving cash straight to the beneficiary can lead to a dollar-for-dollar reduction, and covering their basic housing costs can also reduce their monthly SSI check.
Do I need to report changes to the Social Security Administration?
Yes. Changes in income, resources, living arrangements, marital status, and medical condition must be reported, and failure to do so can result in an overpayment the recipient has to repay. Reporting promptly is often the difference between a small adjustment and a large debt.
