Earnings And Supplemental Security Income (SSI)

Q: How do earnings reduce Supplemental Security Income amounts?

A: This question is about Supplemental Security Income (SSI) and does not apply to Social Security benefits.

Supplemental Security Income is a Federal income supplement program funded by general tax revenues. It is designed to help people aged 65 and over as well as blind and disabled children and adults having little or no income. SSI provides cash to meet basic needs of food, clothing, and shelter.

The Social Security Administration is responsible for taking care of the SSI program but SSI is very different from Social Security benefits.

In 2016, the maximum SSI monthly amount payable is $733 to an eligible individual and $1,100 per month if both members of a couple are eligible.

Income, including Social Security benefits and employment earnings, can reduce the amount of SSI payable. Not all income counts for Supplemental Security Income but all must be reported to Social Security.

For SSI purposes there are several types of income of which two are earned and unearned. The different types of income are treated differently when computing the amount of SSI payable. Income in a month is used to determine a future SSI amount.

Earned income includes wages, net earnings from self–employment, certain royalties, honoraria, and sheltered workshop payments.

Unearned income includes Social Security benefits, pensions, State disability payments, unemployment benefits, interest income, and cash from friends and relatives.

The following refers only to earned income.

Especially for people receiving Supplemental Security Income due to disability or blindness, a high priority is to help them achieve financial independence by taking advantage of employment opportunities. Several employment supports, as a group called work incentives, exist to help SSI beneficiaries go to work by minimizing the risk of losing SSI or state Medicaid benefits.

Whether SSI is because of age or disability, much of a person’s gross earnings are not counted and do not reduce SSI amounts paid. Details vary based on other income a person has, but for this work incentive the first $65 of gross wages plus one-half of the remaining wages are not counted.

For an example of this SSI work incentive, consider monthly gross earnings of $165. The first $65 is not counted, leaving $100. Of the remaining $100, one-half does not count. The $50 left after all this counts as income and reduces the maximum SSI payable. This equals $165 – $65 not counted = $100 divided by 2 = $50 counted.

In this example, of the person’s $165 monthly gross earnings, only $50 actually reduces the SSI benefit.

A person must report that they are working even if earnings do not change the amount of SSI payable.

Not today’s topic, but there are also work incentives for Social Security disability based benefits.