South Dakota SSI Food Rule Change and ISM Rules
For years, if a parent bought groceries for their adult child on SSI, Social Security could reduce the monthly check. That rule quietly changed in September 2024 — and many South Dakota families still don't know about it.
What Changed: Food Is No Longer Counted as ISM
Effective September 30, 2024, the Social Security Administration finalized a policy update that removed food from the In-Kind Support and Maintenance (ISM) calculation entirely. Before this change, any food provided by a third party — a parent stocking the fridge, a special needs trust paying for groceries, a roommate covering a shared Costco run — was counted as in-kind support and maintenance. SSA would reduce the recipient's monthly SSI payment by up to one-third of the Federal Benefit Rate plus $20.
Now, food is excluded. A parent, grandparent, trust, or any other third party can purchase groceries and prepared meals for an SSI recipient without triggering any reduction in the monthly cash benefit. This is a permanent regulatory change, not a temporary waiver.
What Still Counts: Shelter Expenses
The ISM rules for shelter remain unchanged. If someone else pays for an SSI recipient's housing costs — rent, mortgage payments, property taxes, homeowner's insurance, electricity, gas, water, or sewer — SSA still counts that as In-Kind Support and Maintenance.
The reduction works through the Presumed Maximum Value (PMV) rule. For 2026, the PMV caps the ISM reduction at roughly $351 per month (one-third of the $994 individual Federal Benefit Rate plus $20). So even if a parent is paying $800 per month in rent for their adult child's apartment, SSA will only reduce the SSI check by $351.
This matters for families navigating the transition to adulthood. A common arrangement in South Dakota is for the young adult to continue living at home after turning 18. If the adult child lives in another person's household, receives shelter and all meals from that household, and isn't paying a fair-share portion of the household costs, SSA may apply the one-third reduction rule (VTR) — reducing the monthly SSI payment by one-third of the FBR. If the household provides shelter but not all meals, the PMV rule applies instead, with a 2026 maximum of roughly $351.
How This Affects Special Needs Trusts and ABLE Accounts
The food exclusion opens practical spending options that were previously risky:
Special Needs Trusts (SNTs): A third-party SNT can now pay for groceries, meal delivery services, and restaurant meals without affecting SSI. Before September 2024, a trustee who used trust funds for food had to weigh the ISM reduction against the benefit of the purchase. That calculation is gone for food. Shelter payments from a trust still trigger ISM, which is why many South Dakota families direct trust distributions toward non-shelter, non-food expenses like transportation, entertainment, education, and medical costs not covered by Medicaid.
ABLE Accounts: South Dakota doesn't administer its own ABLE program, so residents use out-of-state plans like Ohio's STABLE Account or Virginia's ABLEnow. ABLE withdrawals for qualified disability expenses — including food — were already exempt from ISM under the ABLE Act. The September 2024 change means that even non-ABLE food purchases by third parties are now safe, but ABLE accounts remain the better vehicle for sheltering assets (up to $100,000 is disregarded by SSA) and covering a broader range of expenses.
Free Download
Get the South Dakota — SSI at 18 Checklist
Everything in this article as a printable checklist — plus action plans and reference guides you can start using today.
What South Dakota Families Should Do Now
If you've been avoiding grocery help for your adult child because of ISM concerns, that constraint is lifted. Here's what to act on:
Review your current ISM exposure. If your young adult lives at home and you're already absorbing the one-third VTR reduction on shelter, adding food purchases no longer creates additional reduction. The shelter reduction is already at its maximum.
Update your trust distribution strategy. If a special needs trust has been limiting food-related distributions, notify the trustee that food is no longer an ISM trigger. This frees trust funds for nutritional supplements, dietary supports, and meal programs that improve quality of life.
Document everything. Even though food is excluded, SSA field offices sometimes lag behind policy changes. Keep receipts that clearly separate food purchases from shelter-related expenses. If a redetermination reviewer questions a food expenditure, the final rule (89 FR 21199) is the citation.
The South Dakota SSI at 18 & Adult Disability Benefits Guide includes a Benefits Income Calculator that accounts for the updated ISM rules, plus worksheets for tracking shelter costs, trust distributions, and ABLE account balances. It walks through the full SSI landscape for young adults turning 18 — including the age-18 redetermination, work incentives, and how DAC benefits interact with Medicaid in South Dakota's 1634 system.
Get Your Free South Dakota — SSI at 18 Checklist
Download the South Dakota — SSI at 18 Checklist — a printable guide with checklists, scripts, and action plans you can start using today.