How Does Income Affect SSI Disability Benefits?

Posted on behalf of Phillips Law Group on Dec 28, 2017 in Social Security Disability

social security cardsSupplemental Security Income (SSI) is a needs-based program that pays monthly benefits to blind, disabled, or elderly individuals over the age of 65.

However, to qualify for SSI, you must earn a limited income and own very few assets. This means any additional income you may earn can affect the amount of disability benefits you may be able to receive.

If you believe your SSI claim has been denied because of your income, contact our Phoenix Social Security Disability attorneys for a free consultation. We will review your wages and assets to determine if you were wrongfully deprived of your benefits and help you file a claim to receive the amount you deserve.

Earned Income

Earned income is the amount of money you have made from working, including your wages, net earnings from self-employment and certain royalties.

The amount of earned income you make is important when determining your SSI benefits. To qualify for SSI, your countable monthly income cannot exceed a limit called the federal benefit rate (FBR). This represents both the SSI income limit and the maximum federal monthly SSI payment.

As of January 2018, the monthly maximum Federal amount of income you can make and still qualify for SSI is:

  • $750 for an eligible individuals
  • $1,125 for eligible couples
  • $376 for an essential person

A person who is receiving SSI cannot have income that exceeds certain limits. As of 2018, you cannot receive SSI benefits if your monthly earnings exceed $1,180. 

However, the Social Security Administration (SSA) does not consider all income toward the SSI limit. Some examples of income the SSA will not count towards your SSI limit include:

  • The first $20 of most kinds of income you receive each month
  • The first $65 of earned income and one-half of your earnings over $65 received in a month
  • Supplemental Nutrition Assistance Program benefits (food stamps)
  • Public needs-based benefits
  • Loans that you have to repay
  • Income tax refunds
  • A portion of a recipient’s wages
  • Impairment-related work expenses
  • Small amounts of income that is received infrequently or irregularly
  • Income that the recipient sets aside to become self-sufficient
  • Disaster assistance

How Your Earned Income Affects Your SSI Benefit

There are two steps to determine how your earned income will affect your SSI benefits:

  • Step one: The SSA will subtract any income it does not count from your total gross income. The remaining amount is “countable income.”
  • Step two: The SSA will subtract your countable income from the SSI Federal benefit rate. The result is your monthly SSI Federal benefits.

For example, if you have a total monthly income of $300, the SSA will not count $20, leaving you with $280 in countable income.

The SSA will then subtract your $280 in countable income from the SSI Federal benefit rate of $750, leaving you with $455 in SSI Federal benefits.

Additionally, the earned income exclusion amounts for disabled students increase by two percent in 2018, totaling to $1,820 per month but not more than $7,350 in annual income. 

Unearned Income

Unearned income is all of your income that is not earned or received from working. The types of income the SSA considers to be “unearned” includes:

  • Workers’ compensation benefits
  • Unemployment benefits
  • Veterans’ benefits and pensions
  • Railroad retirement benefits
  • Civil service annuities
  • Private retirement plans or pensions
  • Need-based federal benefits
  • Life insurance proceeds and other death benefits
  • Gifts
  • Inheritances
  • Prizes
  • Awards
  • Spousal support
  • Child support
  • Rents
  • Royalties
  • Dividends and interest

Similar to earned income, there are several types of exclusions that may be applied to this income so that not all of it is counted. The SSA will exclude from your unearned income:

  • The first $20 per month
  • The first $60 of income that is received irregularly or infrequently
  • State or locally funded need-based benefits
  • Rent subsidies from the U.S. Department of Housing and Urban Development
  • Income that is set aside to provide for a plan of self-sufficiency

In-kind Income

In-kind income includes food, shelter or other benefits a person receives without paying for it. In-kind support may include payment for:

  • Mortgage
  • Rent property taxes
  • Utility bills
  • Goods received as a gift

The SSA does not consider the receipt of such goods or income as in-kind support if you live with others or yourself and pay your own rent and buy your own food. If the recipient has roommates, the SSA considers the contribution of the recipient in relation to the total cost of the living and food costs. If a recipient pays less than his or her fair share, the SSA may reduce the recipient’s disability benefits.

The SSA uses one of the following rules to determine how in-kind support affects a recipient’s benefits:

One-Third Reduction Rule

The SSA reduces the benefit rate by one-third when a recipient lives in another person’s household for at least a month and receives food and shelter from others.

Presumed Maximum Value Rule

If the one-third rule does not apply, the presumed maximum value rule does. This rule assumes that a person’s housing and food is valued at one-third of the federal benefit rate, plus $20. However, the recipient can rebut this presumed value if he or she believes the in-kind income he or she receives is less than this amount.

Deemed Income

Another source of income that can affect a person’s SSI benefits is their spouse’s income, which can be deemed available to the recipient. If the spouse earns more than $368 in a month in 2017, his or her income can be deemed to apply to the recipient.

However, if the couple has children who reside in the home, a portion of the spouse’s income can be excluded from the deemed income amount. The SSA excludes $368 of the spouse’s income for each child. There may be additional deductions from the spouse’s income. The difference may be considered income that is deemed to the recipient.

Contact an Experienced SSDI Lawyer to Learn More

Understanding how income is counted for SSI purposes can be very complex. As a recipient, you have certain duties to report your income.

Our Social Security disability lawyers in Phoenix can review the amount income you earn and explain how it may impact your benefits.

For guidance on how to appeal a denied claim or help getting an SSI claim approved, contact the experienced attorneys at Phillips Law Group. We provide a free, no obligation consultation and only get paid for our services if your claim is approved.

Complete a Free Case Evaluation form to get started now. 

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