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What is the One-Third Reduction Provision?

What is the One-Third Reduction Provision?

| Jun 26, 2015 | Supplemental Security Income (SSI) |

The Supplemental Security Income Program, which is run by the Social Security Administration, is meant to support those people who are disabled, blind or over the age of 65 years and have limited income or other resources. Additionally, some children with disabilities and blindness may also be eligible for SSI.

Since SSI benefits are primarily based on an individual’s income and resources, the SSA tries to ensure that a recipient is not awarded more than what is actually required because the SSI program is funded by money that the government collects from personal income taxes, corporate taxes and other similar taxes. In order to achieve that goal, the SSA may reduce the benefits of a recipient under certain circumstances.

One such reduction in SSI is known as the One-Third Reduction Provision. This provision applies if an SSI benefits recipient lives in another person’s household for an entire month and does not contribute to the food and shelter expenses of that home. In this event, the SSA reduces that recipient’s monthly SSI benefits by one-third, or 33 percent.

According to existing guidelines, an SSI recipient should inform the SSA about the change of residence within 10 days after the change occurs. Along with the intimation of the change of residence, the SSI recipient must also inform the SSA regarding any contributions made to that household. The recipient should also inform the SSA about how many people live in that household and who purchases the food.

Under certain circumstances the One-Third Provision does not apply. For example, if a recipient moves in with a four-member family and starts contributing 20 percent of that household’s monthly expenses, SSI benefits will not be reduced. Similarly, if the recipient moves out of a household in the middle of a month and starts pay for the person’s own food and shelter, the person’s SSI benefits will remain unchanged.

Source: Social Security Administration, “SSI Spotlight on the One-Third Reduction Provision — 2015 Edition,” Accessed on June 18, 2015