One question that we receive regularly is whether receiving a gift cards will impact SSA cash benefits or Medicaid. Let’s shed a little light on this.
Giving someone who receives public benefits a gift card instead of cash is a high‑risk practice and does not bypass Social Security income rules. Although it requires a person report the balance, public benefit programs do not ignore the value of gift cards. Depending on the benefit program, gift cards can change how much a person receives in federal benefits. Social Security and other agencies may evaluate gift cards differently, but they consistently look at whether the card has real spending value the individual can use or control.
When a gift card is provided it’s important to consider why the gift card has been given and what benefits the person receives.
SSI:
If you are receiving SSI and paid in the form of a git card for work or services, this needs to be reported to Social Security with your monthly income and the amount will be counted as ‘earned income‘ reduce your SSI in the same way that it would if you were issued a paycheck; about $0.50 for every $1.00 issued.
If you you are receiving SSI and a family member provides you with a gift card as a ‘gift’, this would need to be reported to Social Security and because you did not earn the income through work, it would be counted as ‘unearned income‘ and reduce your SSI benefit dollar for dollar.
Title II (SSDI / SSCBD / DAC):
If you are receiving a Title II benefit (SSDI or SSCDB / DAC) and paid in the form of a gift card for work or services, this would need to be reported to Social Security and that amount would be counted as ‘earned income‘ towards the Substantial Gainful Activity (SGA) limit for the month in which it was earned.
If you are receiving a Title II benefit and are given a gift card as a ‘gift’ this will not impact your Title II this does not need to be reported. SSA does not count unearned income for Title II benefits.
Many gift cards function like money because they can be resold or converted to cash, which gives them real dollar value that should be reported.
In some cases, funds held on a gift card may also be considered a resource, which can impact Medicaid if the balance is held by someone over time. For these reasons, gift cards are not a reliable approach when someone receives public benefits and can create complications when an individual receives public benefits.
If you have additional questions or would like support with understanding this topic more, please schedule some time with us on our Get Help: Intake and Scheduling page.
