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How Does Income Affect My SSI?

You get a paycheck from your job. A relative gives you $100 as a birthday gift. You receive a dividend from a stock you own. All of these are examples of income.

When you are eligible for SSI, you must report this income to Social Security.

Social Security will look at the income you receive in a month and adjust your SSI check benefit based on the income you received. This adjustment happens every month.

Earned income affects your SSI differently than unearned income.

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You can learn all about SSI through our video training series, A Look at Title XVI (SSI).

Unearned Income

Income you receive which is not from work is considered unearned income. Social Security will reduce your SSI by nearly one dollar for every dollar of unearned income you receive.

Examples of unearned income include cash or other gifts which can be converted to pay for food or shelter; interest received from a savings account; and other cash benefits, such as unemployment or Social Security Title II benefits.

Not all unearned income is counted. For example, Social Security will not look at the first $20 of the total unearned income you receive each month. Certain types of income are also excluded, such as school grants and scholarships, energy assistance, or income placed in a PASS account.

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Unearned Income Calculation – Meet Ethel

Ethel is eligible for $943 SSI. Ethel receives a $220 cash gift from her Aunt Gertie. Ethel knows she needs to report this income, and she lets Social Security know. Social Security takes this information and adjusts her SSI, using the following calculation.

If you look carefully at this calculation, you will see that when Ethel received $220 in a cash gift, her SSI was reduced by $200. In other words, Ethel was only able to keep $20 of that $220 gift.

Step One:
What is Ethel’s countable income?

   $220 cash gift (unearned income)
– $ 20 General Exclusion

= $200 This is Ethel’s total countable income

Step Two:
What will be Ethel’s adjusted SSI?

   $943 SSI
– $20 total countable income

= $743 adjusted SSI. This is the SSI amount Ethel will receive.

Step Three:
What does Ethel get altogether?

   $220 cash gift
+ $743 adjusted SSI check

= $963 total monthly income

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Cash gifts don’t work out well for people who receive SSI. Rather than gifting money to someone who receives SSI, consider other types of gifts, such as a payment made directly to the person’s internet provider. Money paid directly to third parties for items and services not related to food and shelter costs are generally not considered unearned income. Contributions to an ABLE account may also be an option. Talk with a Social Security representative or a benefits planner for more information.

Earned Income

Earned income is the gross income you receive in a month from working. Gross wages are your earnings before taxes and other costs (401k contribution, insurance premiums, union dues, etc.) are deducted. Earned Income can also be Net Earnings from Self Employment.

Social Security reduces SSI by less than one dollar for every two dollars gross earned income received. This means you’ll come out ahead financially by working, even if your SSI check amount goes down.

Note:

Earning money while receiving SSI is a great opportunity to work, earn, and save while maintaining a financial safety net.

Paul

Paul earned $800 gross earnings in January. After taxes and a health insurance premium are deducted, Paul’s take-home pay is $695. Social Security will look at Paul’s gross earnings – $800 – when calculating his SSI.

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SSI Example: Destiny

Destiny is eligible for $943 SSI. She is working and earns $800 gross wages in June. Destiny reports her gross wages to Social Security. Social Security takes this information and adjusts her SSI, using the following calculation.

Even though Destiny’s SSI check has been reduced due to wages from work, her total income is greater than receiving only an SSI check.

Step One:
What is Destiny’s countable income?

  $800 gross wages
– $20 General Exclusion

= $780

– $65 Earned Income Exclusion

= $715

   $715 / 2 (divide by 2)

= $357.50 This is Destiny’s total countable income

Step Two:
What will be Destiny’s adjusted SSI?

  $943 SSI
– $357.50 total countable income

= $585.50 adjusted SSI. This is the SSI amount Destiny will receive.

Step Three:
What does Destiny get altogether?

   $800 gross wages
+ $585.50 adjusted SSI check

= $1,385.50 total monthly income

What if my wages cause my SSI check to go down to $0?

Through the Medicaid work incentive “1619(b),” if your SSI amount is reduced to $0 due to earned income, you may remain eligible for SSI – even though you do not receive a check – and maintain your Medicaid eligibility. In 2024 in WA, you can earn up to $57,954 in the year and remain eligible for SSI and Medicaid. Some people may be able to earn more.

To qualify for 1619(b), you must:

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Unearned Income and Earned Income Example – Antonio

Antonio is eligible for $943 SSI. In October, Antonio receives a $200 cash gift (unearned income) and $800 gross wages (earned income). He reports all his income to Social Security, and they do the following calculation.

Since Antonio receives both Unearned and Earned Income, Social Security will first calculate his countable unearned income, and then they will calculate his countable earned income. Social Security will add both to arrive at his Total Countable Income.

Step One:
What is Antonio’s countable income?

  $200 cash gift (unearned income)
– $20 General Exclusion

= $180 countable unearned income

   $800 gross wages
– $65 Earned Income Exclusion

= $735
   $735 / 2 (divide by 2)
= $367.50 countable earned income

   $180 countable unearned income
+ $367.50 countable earned income

= $547.50 total countable income

Step Two:
What will be Antonio’s adjusted SSI?

   $943 SSI
– $547.50 total countable income

= $395.50 adjusted SSI

Step Three:
What does Antonio get altogether?

   $200 cash gift
+ $800 gross wages
+ $395.50 adjusted SSI check

= $1,395.50 total monthly income

Tools to calculate your SSI

Register for BeneftU and use our online SSI calculator to see how your monthly income affects your SSI.

Take advantage of SSI Work Incentives

Social Security offers work incentives which allow people to keep more of their SSI while working.

If you are a student under the age of 22, regularly attending school or a vocational training program, and working, you may qualify for the Student Earned Income Exclusion (SEIE). The SEIE allows you to try out work with little or no reduction to your SSI check.

If you have out-of-pocket expenses for items or services necessary for work due to an impairment, you may be able to claim these as Impairment-Related Work Expenses (IRWE). IRWEs allow you to recover up to ½ of your expenses on your SSI check

If you experience blindness, you may be able to use Blind Work Expenses (BWEs) BWEs are itemized deductions you can claim which will allow you to keep more of your benefits while working. The items you can claim do not need to be directly related to your blindness, but they do need to be related to your work.

With a Plan to Achieve Self Support (PASS), you can set aside income and/or resources to help pay for items or services which can help you reach a work goal. The set aside dollars will not count when determining the amount of or eligibility for SSI.

Do you have questions about your benefits?

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