SSI is a need-based program that provides monthly financial assistance to older adults, people who are blind, and individuals with disabilities who have limited income. Can earning too much income cause your SSI benefits to be terminated? What is countable income, and what does it have to do with your SSI benefits? No, earning too much does not permanently terminate your SSI benefits.
The SSA uses special formulas to calculate your countable income and reduces your SSI benefits accordingly from the current federal benefit rate ($994 per month for individuals and $1,491 for couples). Let’s get into the details.
Core Categories of Income
The SSA classifies your income into the following four categories and treats each slightly differently to calculate your monthly SSI benefits.
Earned Income
This is the money you receive from working a regular hourly job or your own business. Earned income includes:
- Wages
- Salaries
- Net earnings from self-employment
- Tips
- Money received from sheltered workshops
The SSA does not count the first $65 you earn each month. The SSA deducts $1 from your benefit for every $2 you make after that.
Unearned Income
This is the money for which you don’t have to work. Unearned income includes:
- Social Security Disability Insurance (SSDI)
- Veterans’ benefits
- Private pensions
- Unemployment benefits
- Interest from bank accounts
- Cash gifts from friends and family
The SSA does not count the first $20 of your unearned monthly income. They reduce your SSI payment dollar-for-dollar for any unearned income after that $20 deduction.
In-Kind Income
In-kind income is the cash value of the actual food and shelter you receive for free or that someone else pays for on your behalf. In the case of in-kind income, the SSA reduces your SSI benefits by a fixed amount. Usually, it is one-third of the maximum Federal Benefit Rate.
Deemed Income
Deemed income is the portion of someone else’s income that the SSA assumes is available to you. It does not matter whether you receive cash from them.
The deemed income rule applies to the income of people you live with, specifically:
- A spouse who is not on SSI
- Parents (if you are a child under 18)
The SSA looks at what your spouse or parents earn and sets aside some money for their basic needs. They count whatever is left over as your income. This leftover money can lower your SSI check, even if they never actually hand you any cash.
How Countable Income is Calculated
The Standard Exclusions
The SSA applies the following two deductions to your monthly earnings:
General Income Exclusion
The SSA ignores the first $20 of any income you get in a month.
Earned Income Exclusion
If you have a job, the SSA ignores another $65 of your monthly wages.
If you only have income from a job, the SSA lets you combine these two. That means they automatically ignore the first $85 of your monthly gross wages before they start reducing your check.
Impairment-Related Work Expenses
If you are disabled and you have to pay for specific items or services just so you can work, the SSA reduces these costs (Impairment-Related Work Expenses) from your income.
Impairment-Related Work Expenses include:
- Co-pays for necessary prescriptions or doctor visits.
- Special transit or modified vehicles if you can’t use public transportation.
- Attendant care services or job coaches.
- Specialized equipment or tools required for your limitation.
An expense must meet the following rules to qualify as an IRWE:
- You must pay for it out of your own pocket.
- It must be directly related to your disability.
- You need it in order to do your job.
The SSA deducts your IRWE from your countable income. This helps you keep a bigger portion of your SSI check.
What Does Not Count as Income?
The SSA does not count the following as income:
Government Aid
The government does not penalize you for receiving other types of safety-net assistance. The SSA ignores the following:
- SNAP benefits (food stamps)
- Section 8 housing vouchers or rent subsidies
- LIHEAP (help paying your heating or cooling bills)
- Disaster assistance
Tax Relief
The SSA does not count money you get back from filing your taxes as income, including:
- Annual income tax refunds
- Refundable tax credits such as the Earned Income Tax Credit (EITC) or the Child Tax Credit
Education
The SSA ignores grants, scholarships, fellowships, or gifts used directly to pay for your tuition, fees, and necessary educational expenses.
Student Work
If you are a student under the age of 22 who regularly attends school or a training program, the SSA completely ignores up to $2,410 per month of your earnings, for a total yearly limit of $9,730.
Third-Party Payments
If someone else pays a bill directly for you, it won’t hurt your benefits as long as they aren’t paying for your actual food, rent, or mortgage.
Special Exceptions
The SSA also does not count the following as countable income:
- Loans you have to repay
- Small, infrequent gifts
- Clinical trials (the first $2,000 you receive in a calendar year for participating in certain medical research trials)
Every beneficiary has their own unique situation. You are advised to hire a Social Security benefits lawyer if your income fluctuates.
