Does it create a problem for me to have a credit card if I am receiving SSI/SSD benefits and would my available credit represent income to the Social Security Administration?
(Column: Ask the Attorney)
Credit Cards: Are They Countable SSI/SSD Income or Resources?
The Social Security Administration pays SSI disability benefits only to persons who both are unable to work and whose income and total assets are below the agency's limits. Income an SSI beneficiary might receive other than benefits concerns Social Security because SSI is a "needs-based" program. If a beneficiary gets income other than SSI, agency rules explain, then his or her need for SSI is less and SSI benefits must be reduced. Similarly, assets over the agency's limit are thought to demonstrate the ability to get along without assistance. The Social Security Administration's resource limit is a paltry $2000.
The harshness of the basic rule that SSI benefits must be reduced to reflect other income, and cut off entirely if a beneficiary has too many assets, is lessened somewhat by limiting definitions and exceptions. One such limit covers the use of credit cards.
Credit cards seem to share qualities both of income and assets. Like cash, a card with a line of credit may be used to obtain food, clothing, furnishings, etc. Held in reserve, credit is like an asset in the bank waiting to be spent.
Yet the use of credit for purchases gives no net benefit to the purchaser. Whatever value is obtained on credit is matched by a debt that must be repaid. Following this view, it is the Social Security Administration's position that a line of credit on a card is neither income nor an asset, but a loan, and may not be used to reduce SSI benefits.