Does Getting Free Room and Board Reduce Your SSI Benefits?

Supplemental Security Income (SSI) is a needs-based program for seniors and people with disabilities whose income and resources fall below specific limits. How much income you have affects both your eligibility for SSI benefits and the amount you receive each month. SSI pays up to the federal benefit rate ($943 per month in 2024), minus any countable income.

But not all income counts for SSI purposes, and not all countable income is cash. For instance, the Social Security Administration (SSA) treats free room and board as "in-kind support and maintenance" (ISM). Social Security has special rules for valuing free rent or housing that you receive, which can affect your monthly benefits.

Here's a look at what qualifies as in-kind income and the impact it has on SSI payments.

What Counts as In-Kind Income and What Doesn't?

Social Security defines income as anything you receive, whether earned or unearned, that you can use to meet your basic food and shelter needs. "In-kind income" is free food and housing or something (other than cash) you can use to get food or shelter. (20 C.F.R. § 416.1102.)

For SSI purposes, all of the following count as in-kind support and maintenance:

• living in someone else's home rent-free
• living on your own but having someone else (other than your spouse) pay any of the following shelter costs for you:
• rent
• mortgage
• real estate taxes
• home insurance premiums
• water
• electricity
• heating fuels (gas, propane, or heating oil)
• sewer service, or
• garbage removal.

But it's not ISM when someone else pays your phone (landline or cell phone), internet, or cable bill, as long as the friend or family member helping you pays the company providing the service directly. The same is true when someone else pays other expenses for you, such as medical or transportation expenses.

And as of October 2024, Social Security no longer counts any free food you receive as ISM. (89 F.R. 21199.) But receiving free food can still affect how the SSA calculates your monthly SSI benefit, which we'll cover below. Public assistance, like food stamps (SNAP) and government rental subsidies (Section 8), also doesn't count as ISM.

When Free Rent Doesn't Count as ISM

There are a few situations when Social Security doesn't count free room and board as in-kind support and maintenance, including the following:

• You're receiving free housing as a loan that you must repay. (20 C.F.R. § 416.1103(f).)
• You're receiving ISM from people living in your household, and at least one person in the household (besides you) is receiving public assistance. (20 C.F. R. § 416.1142(b).) Qualifying public assistance includes:
• SNAP benefits
• SSI
• needs-based veterans benefits (like a VA pension), or
• other needs-based federal, state, or local government assistance (except tax credits).

How Much Will Free Room and Board Reduce Your SSI Payments?

If you have no income, SSI pays the federal benefit rate of $943 per month (in 2024). If you're receiving ISM, Social Security subtracts the value of your in-kind support and maintenance from the federal benefit rate using one of the following rules:

• the one-third rule (when you receive free shelter and all your meals from others living in your household), or
• the presumed value rule (whenever the one-third rule doesn't apply).

Under the one-third rule, Social Security subtracts one-third of the FBR from your monthly SSI payment—no matter the actual value of the food and shelter you receive. One-third of the 2024 FBR is $314.33. So, if you have no other income, any month that the one-third rule applies in 2024, you'd receive $628.67 ($943 - $314.33).

If someone else pays for your shelter, but you don't get all your food for free, Social Security sets the value of the ISM you receive at the "presumed maximum value" (PMV). The PMV equals one-third of the FBR plus $20 (in 2024, that's $334.33).

Social Security doesn't count the first $20 of your unearned income (whether cash or ISM). So, if the SSA values your housing (which is ISM) at the maximum presumed value ($334.33), Social Security would reduce your SSI payment by $314.33 ($334.33 minus $20). Your reduced SSI payment would be $628.67 ($943 - $314.33).

But unlike the one-third rule, when the presumed value rule applies, you can dispute the value of the ISM you receive. For example, let's say you can prove that the value of the free room and board you're getting is only $250, and you have no other income. In that case, Social Security wouldn't count the first $20 of your ISM and would subtract $230 from the FBR. In 2024, your SSI benefit would be $713 ($943 - $230).

What Happens if You Pay Some Rent, But Get a Discount?

If you pay reduced rent (not based on government assistance), Social Security might count what you save over the current market value as ISM. (Current market value is what the apartment or house could rent for on the open market.) But if your rental agreement qualifies as a "business arrangement," the discount doesn't count as in-kind income.

To qualify as a business arrangement, you must pay at least the presumed maximum value for the shelter. (20 C.F.R. § 416.1130(b).) Remember, the PMV is one-third of the federal benefit rate (FBR) plus $20, which is $334.33 in 2024.

If you pay less than the presumed maximum value, Social Security will count the difference between the current market value of the dwelling (up to the PMV) and your rent as in-kind support. For example, if you pay your uncle $200 per month for a studio apartment that normally rents for $400, the SSA will count $114.33 as in-kind income ($334.33 - $200). If you have no other income, Social Security would exclude the first $20 of ISM and reduce your SSI by $94.33 ($114.33 - $20), leaving you with a benefit amount of $848.67 ($943 - $94.33).

Learn more about the factors that affect how much SSI you can get.