Harsh Transfer Penalties for Supplemental Security Income Applicants

An applicant for Supplemental Security Income (SSI) who transfers assets out of his name prior to applying for benefits could be subject to a strict transfer penalty.  The transfer penalty results in very long penalty periods, which may harm the poorest citizens.

The SSI transfer penalty is similar to the transfer penalty for those applying for Medicaid long-term care, but it results in longer penalty periods. The Medicaid penalty period is obtained by dividing the transfer by a monthly nursing home rate, while the SSI penalty period calculation just divides the transfer by the amount of the beneficiary’s award. The monthly nursing home rate can be up to $6,000, while the beneficiary’s award is usually only a few hundred dollars a month.

See SSI Transfer Penalty Rule Causes Concern, Special Needs Answers, Sept. 12, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.