Supplemental Security Income (SSI) is a federal program that is aimed at providing financial assistance to individuals who have limited income and resources. This individual could be elderly, blind, or disabled. SSI is also designed to help individuals cover basic needs, which include food, clothing, and shelter. However, one question many beneficiaries have is how their income will impact their SSI payments.
What Counts as Income?
The Social Security Administration (SSA) views income as anything an individual receives in cash or in kind that can be used for food or shelter. Furthermore, income is mainly categorized into two main types, which are earned and unearned income.
Earned income includes the earned income wages, net earnings from self-employment, as well as any other money you earn from working. Unearned income, on the other hand, includes Social Security benefits, pensions, and unemployment benefits, as well as other types of support, like money from friends or family.
One keynote is that not all income is treated as equals by the SSA. In other words, some types of income might not be counted at all, or it might partially be counted towards reducing your SSI benefits.
How Does Income Affect SSI Payments?
The SSI payments are calculated based on an individual’s income as well as the federal benefit rate (FBR). In 2024, the FBR was recorded to be $914 per month for an individual and $1,371 per month for a couple. It is important to note that the SSA uses a formula to determine your monthly SSI benefit:
1. Earned Income Exclusion: understand that the first $65 of earned income is going to be excluded, along with half of the remaining amount. In other words, this means that if you, as an individual, works, a portion of your earnings will be counted by the SSA towards reducing your SSI benefits.
2. Unearned Income Deduction: The SSA will reduce an individual’s SSI benefit by the full amount of the individual’s unearned income, minus a $20 general income exclusion.
Illustration: If an individual has $500 in earned income, the SSA will have to exclude the first $65, and then the SSA will divide the remaining $435 in half. This simply means that only $217.50 will count towards reducing your SSI. If an individual receives about $300 in Social Security benefits, which is an unearned income, $280 of that amount will be reduced from the individual’s SSI payment after applying the $20 exclusion.
What if an individual’s income changes?
If an individual’s income is increased or decreased, it will have an effect on the individual’s SSI payments. Not to forget, it is vital to report and record any changes in your income to the SSA as soon as possible; this is to avoid overpayments or underpayments. If you are earning more than the SSI income limits, then your payments will be reduced to zero. This further means that you would no longer be eligible for SSI.
State Supplementary Payments
In some cases, additional SSI payments are on top of the federal benefit. The impact of your income on state supplements will be varied; this depends on the state’s rules. If you are no longer living in a state that offers supplementary payments, then you may want to check in with the local SSA office in your area to have an understanding of how your income will affect your overall benefits.
