If a never-employed, disabled adult receives CDB/DAC (from parent's retirement), and he pays a portion of those benefits for food/housing to his parents while living in their house, would that affect his DAC benefits? Conversely, would the DAC benefits be affected if he paid nothing to his parents for those expenses and saved the money instead? Does SSA Code of Federal Regulations 404.366 pertain to DAC benefits? It's confusing to me, so I truly hope you can help. Thank you.
No. The amount that an eligible Disabled Adult Child (DAC) child can be paid is derived strictly from the primary insurance amount (PIA) of the parent on whose record he or she is eligible. A DAC entitled to benefits on a living parent's record is eligible for a benefit rate equal to 50% of the parent's PIA, whereas a DAC entitled on a deceased parent's record is eligible for 75% of the parent's PIA.
About the only thing that might reduce the benefit rate payable to a DAC would be if other beneficiaries are drawing benefits on the same record, in which case the family maximum benefit could limit their benefit rates.
The regulation that you cited (https://www.ssa.gov/OP_Home/cfr20/404/404-0366.htm) has nothing to do with benefit rates. What that regulation refers to are the dependency rules used to determine whether or not a child qualifies for benefits on a parent' record. In most cases dependency is deemed, which is always the case with a natural biological child of the parent. The reference you cited would be used to determine entitlement in cases such as stepchildren, adopted children or grandchildren filing on the record of a grandparent. Even then, however, things such as 'living with' and 'contributions for support' are only used in determining whether or not the child is eligible for benefits, not their benefit rate.