Maximizing Social Security family benefit - SSI, disabled adult child + minors strategy question

You're right that your disabled daughter's SSI would be reduced by her Child's Insurance Benefit (CIB) amount, minus the $20 general income exclusion. The family maximum is going to limit everyone equally - so each eligible person gets the same percentage reduction when the maximum is reached. Have you calculated what your disabled daughter's SSI reduction would be? That's the key piece. If she gets $914 in SSI now, and gets $800 in CIB, her SSI would drop to around $134 ($914 - ($800-$20)). In my experience, having everyone apply usually maximizes total household income because the SSI offsets work in your favor.

omg the family maximum stuff is SOOO confusing i went thru this last year when my husband died and had to figure out benefits for me and my 2 kids. The SSA people gave me different answers everytime i called!!!

The Family Maximum Benefit calculation is quite complex, but let me break this down for you: 1) When the total auxiliary benefits exceed the family maximum, each person's benefit is proportionally reduced 2) For your disabled adult daughter, applying for Disabled Adult Child (DAC) benefits on your record is mandatory once you're entitled to retirement benefits. This isn't optional. 3) Your wife (at FRA) would be entitled to 50% of your Primary Insurance Amount (PIA) 4) Each child would be entitled to 50% of your PIA However, once the family maximum applies, everyone gets reduced proportionally. The total strategy that maximizes household income usually involves having everyone eligible apply because: - SSI is reduced by other income, but it's a safety net that ensures your disabled daughter maintains a minimum income level - The family maximum applies regardless, so spreading benefits among more people doesn't typically reduce the total household income Tax-wise, dependent benefits aren't taxable unless the dependents have other income that pushes them over the threshold. Your retirement benefits may be taxable depending on your combined income.

You might actually want to run the numbers both ways. When I was dealing with family maximum stuff, I actually found that having my ex-wife NOT apply until our youngest turned 16 gave us more total $$ overall because of how the calculations worked. The SSA calculator on their website was useless for figuring this out.

The SSA uses a weird formula for the family maximum. Its not just a simple percentage of ur benefit. They do this weird calculation with "bend points" that makes no sense to normal people. Your disabled daughter DEFINITELY needs to apply for DAC benefits because those are better than SSI longterm - SSI has asset limits but DAC doesn't!!

I had a similar situation last year with my disabled son and minor grandchildren I'm raising. I spent WEEKS trying to get through to someone at Social Security who could actually explain how the family maximum would affect everyone. After getting disconnected five times and waiting on hold for hours, I finally used this service called Claimyr (claimyr.com) that got me connected to a real SSA agent in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with ran calculations for different scenarios and found that having everyone apply actually maximized our total household income because of how the SSI offset worked for my disabled son. The key was finding someone who could run the actual numbers instead of giving general advice.

This whole SSA system is DESIGNED to be confusing!!! I bet they make it complicated on purpose so people don't get what they deserve. When my kids were eligible for benefits on my record, the SSA "forgot" to tell me about the family maximum for MONTHS and I had to fight to get backpay. And don't even get me started on how they handle the disabled adult child benefits - they made my nephew reapply THREE TIMES before they got it right!!!

To address your tax question: auxiliary benefits paid to dependents are potentially taxable to the dependents, not to you. But minor children and most disabled adult children rarely have enough other income to trigger taxation of Social Security benefits. Regarding the whole family applying: The family maximum will be the same regardless of who applies, but having different people apply changes how the money is distributed. Since SSI serves as a floor for your disabled daughter, having her receive benefits on your record typically works out better overall because it frees up SSI funds for others who need them. As for your wife waiting until the children age out: there's no penalty for her waiting since she's already at FRA. From a household income perspective, it might make sense for her to wait if the proportional reduction would give her very little now, but she could get the full 50% of your PIA after the children age out. If I were you, I'd have everyone apply now, then reassess when your minor children approach 18.