My husband passed away January 2016. My youngest daughter is a senior in high school and receives social security benefits until the end of August when she turns 18. We have been depositing the money in a savings account for her. This account only contains money from the SSI survivor benefit. I understand we do not include them as income on her FAFSA. My question is — where it asks for balances on savings and checking accounts, do we have to include the balance on that savings account that is strictly the SSI money or not? I would think that we shouldn’t have to since we don’t report the amount received as income for her. Help!!!
I believe they are included as assets. Assets do not have to be from income.
Yes, I haven’t heard of any asset exclusion for funds that aren’t reported as income on financial aid forms. For example, an inheritance and life insurance death benefits are not FAFSA reportable income, but those same funds are reportable as assets if they are on hand at the time that FAFSA is filed.
so sorry to hear about the loss of your husband.
Yes, unfortunately, that is counted as a student asset.
It would be better if it were in your account OR put the money into a 529 acct.
It’s the student’s benefit; it can’t legally be converted to a parent asset unless the student makes a bona fide gift of the money. Using the money to open a student-owned 529 account, however, would be perfectly acceptable and would mean that the asset would be counted as a parent asset for financial aid purposes.
Thanks everyone! This is very helpful.
Yes, putting the money into a student owned 529 would make it a parent asset, so it won’t hurt EFC as much.
That said, as I understand, SS benefits for surviving minors are really to go towards their living expenses, and therefore the surviving parent can direct where that money goes and is spent. The mom, in this case, was being nice by letting the money go into a child’s savings acct rather than go into the household budget where legally she would be allowed to do so while raising a minor child.
Now, it’s probably better to move the money into a 529 before FAFSA is filed.