A supplemental security income (SSI) recipient, C, paid $350 per month in rent for her lodgings. This was a reduction of $200 per month in the apartment’s fair market value.

The property manager, who was also C’s landlord, gave her this rent reduction in exchange for her services in collecting rents from the other tenants in the apartment complex. As a condition of rendering this collection service, C was required to reside in the apartment complex.

Social security characterized this reduction in rent as in kind unearned income and reduced C’s monthly SSI payment dollar for dollar for the reduction. C appealed and received a hearing by an Administrative Law Judge.

The ALJ sided with C, holding that the rent reduction was earned income, which reduced SSI benefits at a lower rate than unearned income. However, the Appeals Council for social security did not accept this result.

The Appeals Council, in its ruling, stated that the test for determining earned income for SSI purposes was the same as determining wages for purposes of the Social Security Retirement program.

Under this test, where a person received a rent reduction for providing rent collection services and was required as a condition of providing such services to reside on the landlord’s premises, the rent reduction was considered in kind unearned income.

See Social Security Ruling (SSR) 90-4a.