Will My Child Support Lower My Child's SSI Amount?

by Beverly Bird

If you have a special-needs child and you're facing divorce, the issue of child support can be tricky, because it could affect the government benefits she's receiving. Supplemental Security Income provides money to disabled and blind individuals, including children. They do not receive this income simply because they're infirm, however. They must also have limited earnings and assets. The Social Security Administration has taken the position that child support is unearned income to your child.

Reduction or Loss of Benefits

As unearned income, the child support you pay results in a dollar-for-dollar reduction in your child's benefits, up to two-thirds of your monthly support obligation. For example, if your child receives $250 a month in SSI and if you pay $600 a month in support, she would not receive her SSI benefits because two-thirds of your support obligation is $400. The $400 is deducted from her monthly benefit amount, resulting in a negative balance. SSI also provides Medicaid eligibility, so your child could potentially lose this benefit, as well.

A Trust May Be an Option

If you're facing a situation in which your divorce is likely to eliminate your child's SSI and Medicaid eligibility, speak with an attorney. It's possible that you could form a special-needs trust for your child and then obtain a court order to make your payments to the trust, rather than directly to your spouse. There are pros and cons to this option, but it can preserve your child's Medicaid eligibility and her benefits, as well -- if done correctly.