Part Three: What’s new in the Social Security Administration’s Approach to Special Needs Trusts?

Part Three: What’s new in the Social Security Administration’s Approach to Special Needs Trusts?

10097-photo_6Third Party Vendor Payments on Behalf of the Disabled Individual.
When a third party, such as a family member, makes a payment directly to a vendor who provided goods or services to the disabled individual, this is known as a third party vendor payment (TPVP). POMS SI 00835.360A.

The vendor might be the seller of goods or services (e.g. a merchant, retailer, or contractor); or a person or entity who takes the place of the vendor such as a bank or credit card company.

In general, third party vendor payments that result in the individual receiving in-kind support and maintenance are considered unearned income when the individual first has use of the item and the reduction in SSI benefits is evaluated under the presumed maximum value rule.

However, if an individual obtains food or shelter using his or her own credit, and a third party later makes a payment for the items as a gift, in-kind support and maintenance resulting from the third party vendor payment is treated as income in the month of payment.

The POMS give an example of a parent purchasing food using a line of credit at the store in the month of August. The parent receives help from his son in the month of September when the bill arrives. The parent is charged with receiving in-kind support and maintenance in the month of September when payment is made, rather than when the parent first received use of the item in August.  POMS SI 00835.360D.1.

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