(SSI+DAC) Options for Becoming Self Sufficient, Considering These Problems
Sorry for how off-topic this is (I also haven't posted in a while!)
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My post is very long. I have a TL;DR about 2/3 of the way down, and I hope there's enough information there.
I collect DAC and SSI. I was disabled as a child; I have neurological problems, but I’m primarily limited by musculoskeletal disabilities. I won’t go into detail about my disabilities or limitations – except to say that my limitations are highly sporadic. I might be able to do a reasonable amount of work (assuming the work is conducive to my disabilities) for a couple of years, and then nearly completely unable to do any for over a year. Or, I might be limited one month at a time, for a few months – each year; etc. It’s inconsistent. Working for someone else isn’t an option – there are between one and three things I’m able to do, and I can’t find an employer for those (one requires a degree I don’t yet have.) Thus, I aim for self-employment – so I can work around the times I can’t work.
Currently, after paying my bills and buying toilet paper, etc. (and my bills are limited – no data on cell phone service, no cable TV, no credit cards) I have about $150 to spare each month – and that’s before account for things like vehicle maintenance.
My DAC gives me medicare and $613/mo. There’s no asset (resource) limit with this, but there’s an income limit - $1,171/mo. It has a hard limit – if I receive $1,170 in a single month, I lose it entirely – including the medical benefits, for that month (or year, as I’ll explain later.)
My SSI gives me Medicaid (medigap) and dental/vision. It also gives me $143/mo, and has an asset (resource) limit of $2,000. After I earn $65 in one month, I begin to lose this. For each dollar I earn, they reduce my benefit by 50 cents (2:1). When my benefit becomes 0, I lose my Medicaid (medigap) coverage, meaning my dental and vision. I have MAWD, so I’d still have medigap – but no coverage at all for dental or vision. In addition, SSA(?) stops paying my medicare premium ($134). There are two programs that can cover this – QMB and Slim B.
MAWD has an income limit of about $5,000, and an asset limit of $8,000. MAWD gives me Medicaid insurance, even my SSI (the $143) goes to 0. But, again – it would leave me without dental or vision coverage.
QMB and SlimB pay my medicare premium if I lose my SSI check ($143). As far the benefits they provide, I believe they’re essentially the same: they both pay my medicare premium. QMB has a stricter cut-off, so I’ll only speak about SlimB: It allows me to have … $1,200? income and about $7,600 in resources, and remain eligible. They count my DAC/SSI at 100%. Thus, my $613 check counts as $613 toward my income limit. After that, they count half of my earned income. So, I can earn about $1,200 and not lose this. However, after $1,170 it becomes irrelevant because I’ve already lost medicare: there’s no medicare premium to pay if I don’t have medicare!
Section 8 gives me assistance with paying for my housing; they pay $342 of my $550 total. For every dollar I earn after about $80 (they don’t exclude the first 80, they merely don’t make any changes until I go beyond this), they take away… 50%? of my assistance. So, I lose this entirely after I earn about $684. Also, after the first year (I’m half way there, now) they count my self-employment income the same way social security does – they average it based on the previous year.
LIEAP (Energy Assistance) assists me on average (they only assist in the cold months, but I’m averaging for all 12) with about $30. I don’t know their income requirements, but I assume it’s similar to that of food stamps (below.)
Food stamps – gives me $198/mo. And I use all of it – and I’m not fat and I don’t eat expensive food. I’m 130lb, but I have an absurdly high “metabolism” (or whatever it is that causes the effect often attributed to it.) … Because I’m disabled, my assistance here is tapered. I can earn $300 without losing any of this, but then it begins to taper. After earning $1,000, I’m left with only $50/mo in assistance.
PELL Grant – Pays my tuition entirely. It tapers, too. I don’t lose any of it until I earn around 14k/yr. I don’t remember exactly how much it is, but this is the least stringent assistance to satisfy.
In all, I receive about $704 in non-cash assistance (medicare premium, sec.8, food stamps, energy assistance) and $753 in cash assistance (soc.sec), before accounting for my PELL grant – as this isn’t used to support me. Thus, I receive about $1,457 in assistance – before attributing a value to my medicare, medicaid, vision or dental coverage.
Social Security makes it difficult: I’m self-employed, so they will only go by estimated income for the full year – and they base this on the previous year. So, if in year 1 I earn an average of $1,171 (just $1 over the limit), I lose all soc.sec benefits and housing assistance in year 2 (this accounts for $1,095). I’d still have MAWD (which doesn’t cover vision or dental). Now, again – my disabilities are sporadic. My hope is that I can learn to work with my body, or work around by body, and not become too severely limited for an extended period. However, I can’t rely on this. Also note: the amount I earned in this example is $300 less than what I receive now - and I lost some of my medical coverage. Also note my asset limit: Social security doesn’t count my income in the first year, so to keep my Medicaid coverage for the first year, I have to keep my assets below $2,000. If I’m below $2,000, I wasn’t able to save up for the second year. Heck, even if I surrendered my Medicaid coverage – I’d still have an $8,000 asset limit from MAWD and $7,600 from SlimB – this isn’t enough to cover the tragedy that may befall me in the second year. (This isn’t an unreasonable fear, I’ve gone over a year being very limited – this happened just 2 or 3 years ago.)
And then at this point, I’m also paying taxes – which I didn’t add in my calculations! So, my $1,170 isn’t really $1,170. In addition, my pell grant beings to lower. At this point, the loss in pell grant isn’t significant – but as my income rises above this, it becomes so.
So, what if I earn less than 1,170? Well, if I earn – for example, $1,100 – I lose approximately (there’s no need to add this one precisely, it simply can’t work.) $800 in benefits and my dental/vision. This leaves me with $450/mo (my previous $150, plus this $300), and a $2,000 asset limit. I can’t pay for school this way, and I can’t ensure my ability to continue work: my work requires a vehicle, and at some point in my life it’s going to require more than $2,000 in assets to fix it.
TL;DR
If I do an LLC – my LLC’s income is counted as my income. If I do a sole proprietorship – the same thing applies. If I do an S-Corp, I’m required to pay myself a normal wage for the field. If I do a C-Corp, my business income is supposedly protected. SSA, PCH, and even food stamps will be counting my self-employment income based on my tax return; if there’s nothing on the self-employment line, they count it as 0. C-Corps pay taxes on their income, and if I retract funds from it to pay myself – we (my business and I) end up paying tax twice. However, it would allow me the possibility for either A) I'm eventually reliably making enough $$ to not need assistance, and then I can pay myself and drop my assistance. B) The business has enough assets for me to simply sell it and pay for my doctorate degree.
I’ve already spoken to dept. of social services, and to SSA – they both told me I can do this because the corp’s income isn’t my income. However, I don’t trust them. They’ve screwed up many times, and given me completely incorrect information which affected my benefits. So, my concerns:
Is C-corp counted as an asset? SSA told me it’s not, since I’m the owner/quasi-"self-employed." (Remember my $2k asset limit.)
If I perform duties for this business but don’t take any income for myself, am I still performing substantial gainful activity? (AKA “Three Tests”) SSA told me no, that I’m able to volunteer all I want and I won’t be affected.
Do they really disregard this business’ income until I pay myself? SSA and Soc.Services said this is correct.
My other option is to take student loans and get a doctorate. However, as far as I can see – I can’t apply for IBR (income-based repayment) until after I’ve taken the loan. Also, I can’t be approved for IBR if I’m in default on the loan. So, this is what happens: I finish school, then I have to do a 2-year unpaid internship, but the loan provider wants me to start paying after … 6 months? Obviously with my income, I can’t. I also can’t be approved for IBR, because now I’m behind; I wasn’t paying.
I’ve already considered PASS (Plan to Achieve Self Support), but this is no-go. My local benefits specialist told me that the cadre for my region hasn’t approved even one of her clients. And she’s the only specialist in this area, so it’s not as though she has a small sample size. Even if he wasn’t difficult to deal with, it would still be a big question mark: I can’t apply until shortly before I want to begin using the funds they’d give me, which means I have to finish my undergrad (another 4 years.) It’s possible, of course – but it’s not reasonable to spend another 4 years in school, full-time, for an unlikely possibility.
I also considered doing a simple LLC and paying myself a little, and buying business equipment with the rest. That way, I have taxable income - it's not a hobby, and I'm increasing its assets. However, this won't work either - my taxes would be too high, because the nature of my business uses few, but expensive individual items. Thus, I can't deduct them as a business expenses - I can only depreciate them, making my taxes too high in the early years.
If these are a no-go, do I have any other options – or am I simply screwed, will I forever be a leech to society?
