PESS, OR Property Essential for Self-Support

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When you apply for or receive SSI, the Social Security Administration takes into account any income you receive, and any resources you have.
In order to remain financially eligible for SSI if you are a student under age22, your countable income must be less than $1550/month (in 2008), and your countableresources must be below $2000 ($3000 for a couple).
If you receive SSI and you are self-employed or have your own small business, you can use PESS to reduce countable income and resources. In this situation, SSA counts your earnings for SSI differently than it does for those who work for wages:
  • SSA begins with your gross or projected gross earnings for the entire year, less your annual expenses. This is your net earnings.
  • That is divided by 12 for an average earnings per month. This is treated as wages, subtracting the $65 earned income exclusion, the $20 general income exclusion, any IRWEs, and then dividing by 2.
  • If you have a PASS or any Blind Work Expenses, these are also set aside.
  • The result is your countable net income. Your benefit is the SSI monthly federal benefit rate minus your countable income.
1: Property Excluded Regardless of Value or Rate of Return SSI will not count any property used in your trade or business. The property that SSI doesn’t count can be things like tools, equipment, or permits, and/or it can also be the cash in your business account. Your business account can accumulate money well over the $2000 you are allowed as your personal resources with no adverse effect on your financial eligibility for SSI.
2. Property Excluded up to $6,000 Equity, Regardless of Rate of Return This excludes from resources up to $6000 of the equity value of nonbusiness property that is used to produce goods or services for home consumption.
 

Example: Alberto is 18 years old and has an intellectual disability. His family owns land not attached to their home that he uses to grow a garden of vegetables eaten at home. According to the local assessor, the land is worth about $6,500.

Because the land is not part of his business it can’t be excluded under the PESS #1 above. However under PESS #2, because it helps Alberto to feed his family, up to $6000 of the value of the land will not be counted.

Value of land
$6,500
Amount not counted by SSI
$6,000
Amount counted by SSI
$500
SSI resource limit
$ 2,000
Alberto’s bank account
-$400
Countable value of land
-$500
Amount of resource limit unused
$1100
3: Property Excluded up to $6,000 Equity if it Produces a 6% Rate of Return Up to $6000 of the equity value of nonbusiness income-producing property is excluded from resources if the property produces a net annual return equal to at least 6 percent of the excluded equity value. Any portion of the property's equity value that exceeds $6000 is treated as a countable resource.