How Unearned Income Affects Disability Benefits

How Unearned Income Affects Disability Benefits

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are already confusing. For SSI applicants in particular, unearned income can affect your monthly payment amount. Unfortunately, the SSA doesn’t view the matter as one-size-fits-all. Each person and family is different, so the SSA grants every approved claim a different amount of money. When it comes to determining your SSI benefits, they start by looking at your current income. This is a number that goes far beyond your current or last job’s wages. Unearned income will affect your SSI disability benefits, but to a different degree than it would someone else. Below, we’ll explain what you need to know about how unearned income affects your monthly SSI disability benefits.

The Federal Benefit Rate

SSI is a disability benefit that’s similar to SSDI, except it doesn’t require the same extensive work history. Instead, your household income (or lack of it) needs to be low enough to qualify you for monthly SSI payments.

Qualifying for SSI benefits might seem simple at first glance. but the adjustments made to the federal benefit rate are anything but. The maximum payment for those who qualify as well as the income limit is $771 per month, which seems like a relatively simple number to look to for guidance. Those who do qualify, however, aren’t guaranteed to garner the maximum payment. To determine how much your payment should be, the SSA looks at your income—but it’s important to note that income and wages aren’t always synonymous.

Unearned Income vs. Earned Income

Earned income is the sort you’re probably most familiar with. It refers to the wages you make from a job. Unearned income, on the other hand, refers to any income that is given to you in the form of a benefit, accumulated interest-earning, or cash gifts. One other means of income that the SSA examines is in-kind income, which refers primarily to food or shelter you receive as a gift. It can also manifest itself in more subtle forms, such as a roommate covering the majority of your rent or grocery bills.

Unearned Income and Your SSI Payments

In-kind and unearned income won’t disqualify you from SSI payments, but they will reduce your amount. This is an important factor to keep in mind when receiving gifts from others, particularly if they aren’t regular, lasting ones. The more income of any kind you have, the less your monthly SSI payments will be.

The SSA determines your payment value by looking at your countable income. This is a confusing term: Isn’t all income countable? The short answer is, no. There are several kinds of income that don’t count against you, such as infrequent gifts, tax returns and food stamps. Any recurring gifts or large sums of money (such as an inheritance) are counted, however. If you live with your spouse or your parents and they are employed, some of their income will also be accounted for when adjusting your SSI payments.

Speak with a Professional

Understanding whether your household would qualify for SSI benefits and how much you would be paid each month is a difficult and tedious process for anyone. It might be a good idea to speak with a Social Security attorney or advocate to make sure your application efforts are successful the first time. A rejected application can take months to appeal, extending the length of time you and your family must go without benefits for an even longer stretch. A disability attorney or advocate may be able to increase your chances of garnering benefits as well as helping you understand what to expect when your payments start arriving.

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