Creating a Shared Living home for your Loved One can feel like a jigsaw puzzle with a thousand tiny parts, and no box top to show you the big picture … especially when it comes to finances. When I talk to families about what makes their situation unique, often the discussion revolves around affordability. Understanding your Loved One’s potential benefits is crucial, so you don’t inadvertently leave potential financial resources on the table.
We work with families to give them a clear picture of benefits and their finances, and we spend a lot of time helping them understand four key areas:
Let’s take a closer look at each of these areas; hopefully, I can shed some light on ways your family might be able to make a shared living solution easier to manage.
First, avoid this common “in-kind” income mistake with SSI
The Supplemental Security Income (SSI) federal program pays benefits to adults and children with disabilities who have limited income and resources. The 2022 maximum benefit that an individual adult with disabilities can receive is $841 (that's up from $749 in 2021).
The benefit your Loved One receives depends on their income -- income they’ve earned and also what’s known as “in-kind” income. According to ssa.gov, in-kind income is defined as “food, shelter, or both that you get for free or for less than its fair market value.” This means if a family allows their adult child with IDD to live in their home without paying rent, their SSI payment can be reduced by up to one-third.
The good news? Your Loved One’s benefits can often be immediately bumped up to the maximum amount by completing a simple rental agreement and submitting it to SSI.
And while every family’s tax situation is different, most families we’ve worked with find there is no additional income to report on their taxes because the cost of maintaining the living space for your “renter” outweighs the income from their rent. Talk to your tax advisor to learn more. Check with your attorney for a sample rental agreement, as regulations vary by state. This sample rental agreement was created to meet the requirements for SSI by an attorney in Washington state. (This is a sample only. Please consult your own attorney to be sure this meets your family's needs.)
Next, improve your chances of securing that Section 8 voucher
HUD’s Housing Choice Voucher Program (Section 8) provides a valuable housing subsidy that makes rent more affordable. But waitlists are generally long, and the process has potential stumbling blocks.
Start by paying close attention to waitlist openings in your area, and apply as soon as you can. Affordablehousingonline.com can help you find open lists in your area; read more about them in our last issue. Partners4Housing also monitors these lists nationally, and we identify lists in your area as part of our Benefits and Housing Review.
Keep in mind that to be eligible for “preferred status” for Section 8, you should be charging your Loved One at least 50% of their monthly income for rent, typically around $500-600/month. This Statement of Household Expenses and Contributions from SSA can help you work out the numbers you should be charging.
And, you can sign up for more than one Section 8 waitlist at a time, even if a Housing Authority is outside the area where you want your Loved One to live. Most housing authorities require a recipient to live in their jurisdiction for one year before their voucher becomes transferable. However, people with disabilities may request “reasonable accommodations” to be able to transfer immediately. Other examples of reasonable accommodation might be needing an extra bedroom for a live-in caregiver or renting from a relative. We often help families create “reasonable accommodations requests” to help expedite that process.
Want some inside information? One mother shares her recent journey through the Section 8 process and offers valuable insights for other families.
Be prepared for your state assessment for Medicaid waiver programs
To make the most of this state assessment for Medicaid waiver services, look to your local Arc or other advocacy organization to connect with someone who can help you prepare for this assessment. It’s so important to understand what is taken into account during the assessment and to make sure the assessor is presented with the information that will maximize the potential benefits. This can often lead to financial solutions for caregiving and other services your Loved One needs to thrive in a shared living home.
Don’t forget to apply for SNAP
Once your Loved One is paying rent, they are considered the head of their own household, even if they are still living in your home. If your Loved One is paying you rent, they are considered your roommate, with their own income and expenses.
As the head of their own household, your Loved One can apply for Supplemental Nutrition Assistance Program (SNAP) benefits from your state to get help with food costs. (Check out this SNAP state directory to easily connect with the program in your state. Most states require a simple online form to apply.)
Begin preparing for independence
While taking care of all the nitty-gritty of applying for benefits and getting the finances in order, please don’t lose sight of the big picture. The reason you are going through all of this is to help your Loved One launch into a more independent and meaningful life.
One way to prepare them is to practice their new transportation routines. Getting to and from work or using specialized or public transportation can be a challenge. Parents often find it’s easier to just drive them everywhere they need to go. But that can hinder their ability to truly live a more independent life. So help them get comfortable with transportation options so they can feel more self-reliant.
Housing isn’t just about the bricks and mortar or the rent and the benefits; it’s about building a life. Encourage them to get involved in meaningful community activities prior to their move-out date. Encourage them to think about volunteer opportunities, or find some community groups to join. Make time to explore their new community and help them find ways they can engage.
When it’s time for them to move into their new Shared Living home, you’ll all feel that much more confident.