The $20 Rule-Explained Simply

The SSI $20 rule deducts from countable income, so people who qualify for SSI also qualify for Medicaid or other Medicare Savings Program Buy-In (MSP).

ABD Buy-In Programs: How to calculate and code unearned and earned income

The following are examples of calculating and coding unearned and earned income on ABD cases.

CASE EXAMPLE 1:

Billy Wright has both RSDI Income and earned income. He receives $1124 RSDI income. He also works and earns $950 a month.

$1124

Apply Earned Income Formula: (Gross Earned -$65)/2

Earned income deduction: ($950 – $65)/2 = $442.50 ($443) countable earned income. No additional GIE is given as it is built into the C.1.

Diverted Income Calculation $950 – $443 = $507

Total Countable Income is $443 + $1124 = $1567

RSDI box: $1124

Earned income box: $950

Diverted Box: $507

Review total countable income and refer to Appendix C-1 for eligible buy-in program.  In this example, Billy is eligible for SLMB.

ABD Buy-In Programs: Buy-In Example with No Earned Income

John McEnroe receives RSDI in the amount of $1150 and has Medicare Part A and B. He has applied for medical assistance.

John only has unearned income (SSA) $1,150.

There are no other exclusions (since there is no earned income).

John’s countable monthly income for MSP = $1,150 (John is eligible for QMBP based on C.1 (04/01/2026).

RSDI Box: $1150

How to determine Medical and SSP eligibility using the SDX screen

CASE EXAMPLE

Harry Truman is receiving SSI and RSDI. He’s applied for the SSP and Medicaid.

It’s coded in FACS like this.

$827 RSDI

$187 SSI

*Do not code the $20 GIE in the diverted block or any other block.  The reduction is already built into the SSI amount. If SSA already counted it, we don’t count it again.

Total countable income is $827 RSDI + $ 187= $1014.00.  Review total countable income and refer to Appendix C.1 for eligible buy-in program.  Harry is eligible for QMB and $1034 SSP standard-minus $1014 countable income=$20 SSP.

Explanation of How SSI Calculates the Payment:

SSA determines the SSI check like this: Start with the maximum SSI account (FBR). Subtract the person’s countable income. What is left is the SSI payment.

Before subtracting income, SSA applies exclusions such as $20 General Income Exclusion (GIE), $65 earned income exclusion (if working) and Other allowed deductions.

If someone receives SSI, and other income: SSA has already applied the $20 GIE. The SSI amount you see is already reduced. We do NOT need to apply the $20 GIE again to SSI.