Extra Income Can Lower SSI

Social Security classifies "income" as either "earned" or "unearned." The first $20 of either type of income in a month is not counted. After that, unearned income results in a dollar for dollar reduction of SSI benefits; earned income in excess of $65 reduces the SSI entitlement by 50 cents for each dollar earned. Common examples of unearned income include state disability and VA benefits, alimony, inheritances and gifts. It can also include non-cash items, such as the value of clothes or groceries purchased for you. Earned income includes wages form employment and net earnings from self-employment. 

Items that do not count as income include direct payments made for you by a third person (the money cannot cross your hands) for services unrelated to food, clothing or shelter (e.g., medical bills) and needs-based entitlements including Section 8 rental subsidies, home energy assistance, and the children's share of AFDC. 

To be eligible for SSI you must also be within strict resource limits. A "resource" can be cash or property. Generally, an item is considered income in the month it is received and a resource the following month. Individuals are allowed to have $2000 in resources while couples can have a total of only $3000 in resources. Benefits are suspended any month resources rise above the allowable limit and are reinstated the month after they have been spent down within the allowable range. 

As with income, SSA counts certain things but not others as resources. Generally, cash or anything that can be converted into cash counts as a resource, including cash at home or in a bank account, traveler's checks, stocks and bonds. If you have a joint bank account with someone else, SSA will presume that half the account belongs to you; however, you can challenge that presumption. In addition, most property counts as resources, such as household goods worth more than $2000, extra vehicles, boats, machinery, buildings or land. 

Some items SSA does not count as resources include: the house you live in, whatever its value; one automobile up to $4500 in value or, if you use it for medical reasons, any value; and funds set aside in a special account to cover your burial, up to $1500 for an individual and $3000 for a couple. Additionally, retroactive SSI or SSDI benefit payments do not count as resources for the first six months after they are received. 

To illustrate how the income and resources rules are applied, let's say that in January you receive your monthly SSI check of $614 and you have $200 in a checking account. During the month you win $3000 from a church Bingo game. This is counted as unearned income. Because of the dollar-for-dollar reduction, this income is too high for your to be entitled to SSI in January. Since you already received your January SSI check, you will need to repay that money to Social Security. On February 1, if you have more than $2000 left from any source of money you had in January, you will not be eligible for SSI in February because you exceed the resource limit. If you have $2000 or less, you will be entitled to receive your regular monthly SSI check. 

Rules regarding income and resources are complicated and detailed. This article provides only general and very basic information. If you have more specific questions, you can call or visit your local Social Security office or call The Hawkins Center for additional information and advice. 

Marriage and SSI

Social Security treats a married couple as a family unit. Thus, SSA considers the income and resources--even money kept in separate accounts--of the beneficiary's spouse in determining the married individual's SSI eligibility and benefits amount. To qualify for benefits, the couple may not have more than $3000 n resources. Further, SSA "deems" a portion of the non-disabled spouse's income to the disabled spouse. The amount so deemed depends on many factors including whether the couple has children; if so, how many; and whether income is earned or unearned. The more income deemed to the disabled spouse, the lower that spouse's SSI entitlement will be until, if high enough, he or she will be found totally ineligible for SSI. 

Alternatively, if both individuals in a marriage receive SSI, they are paid at a couple's rate. This rate is about $126 a month lower than the total benefits two unmarried individuals receive. When a couple separates or divorces, each person is paid as an individual. However, a couple cannot divorce and continue to live together as though married to get higher benefits. 

If you receive SSI, it is important to report any changes in marital status promptly to Social Security to avoid a possible under- or over-payment.