Social Security offers two types of disability benefits. Under Social Security disability insurance benefits (SSDI), there are no limitations for income or assets. However, under Supplemental Security Income (SSI) benefits, there are very specific limitations for income, assets and resources.
What you can own under SSDI?
To qualify for SSDI benefits, you must have worked for a certain number of years. Any worker with a valid Social Security number who paid into Social Security may file. Therefore, there are no limits to the amount of assets, cash or resources you own. Additionally, there aren’t any limits to the amount of income you or your spouse makes. Keep in mind that if you are making more than a certain amount by working or in self-employment, you will not qualify for Social Security disability benefits. Social Security defines disability as the inability to work.
What can you own on Social Security disability: unearned income?
Unearned income is money that is earned outside of a job. Under SSDI, you can receive income from other sources and still qualify to receive benefits. Examples of unearned income include:
- Income from retirement accounts, dividends or stocks
- Unemployment benefits
- Rental income
- Alimony or child support
Example 1: what you can own under SSDI
For example, Sam worked for many years as a cook. He stopped working due to a back injury. He is married and his wife still works. Sam has a retirement account. He also owns and rents another property. Sam earned enough work credits to qualify to apply for SSDI. Therefore, his wife’s income, retirement account and rental property won’t interfere with his ability to file for SSDI.
What can you own under SSI?
SSI pays monthly benefits for disabled adult and children. It is a needs-based program. Unlike SSDI, Social Security will consider your income, assets and resources. To meet the SSI income requirements,
- You must have less than $2,000 in assets (or $3,000 for a couple)
- Have a very limited income
- Are a US citizen (there are very few exceptions to this)
What counts towards the SSI asset limits?
Social Security calls assets “resources.” Resources include money but also something that you own and can turn into cash. Resources include:
- Cash or any money in a checking or savings account
- Life insurance policies, stocks, bonds or retirement accounts
- Household goods and personal items over $2,000, including additional motor vehicles (Social Security won’t count one motor vehicle)
Other factors that may affect SSI
Social Security will consider income from your spouse. This is called “deeming income” and applies to spouses earning over $392 per month. If you have children, the threshold increases by $392 for each child. Additionally, Social Security may reduce SSI benefits if you receive free room and board. Social Security can reduce benefits as much as 1/3 for free or reduced room and board. However, if you have a contract promising to repay the value of your room and board, it may be considered a loan and not counted against you.
Example 2: what you can own under SSI
For example, Sara hasn’t worked for many years. She does not have enough work credits to file for SSDI. Sara lives with her parents. She also receives food stamps. Sara can’t work due to severe depression and anxiety. Since Sara’s only income is from food stamps, she can file for SSI.
Example 2: what you can own under SSI
As another example, Don also hasn’t worked for several years and he doesn’t have enough work credits to file for SSDI. Don can’t work because he has several medical conditions. However, Don is married and his wife works. Unfortunately, his wife’s income prevents Don from filing for SSI benefits.
What doesn’t count towards the SSI asset limits?
- Your home and property
- Your car – you can have one car excluded from the asset limits if you need it for transportation
- Support payments such as state or local relocation programs, crime victim’s assistance, earned income tax credit payments, grants or scholarships for school and child tax credit payments
- Special accounts such as ABLE accounts, PASS savings and IDA savings
- Burial savings up to $1,500 in value plus burial plots for your immediate family
Income limits for SSI
Generally, Social Security counts income differently than what you might think. Countable income includes wages from working. It also includes money you get from other sources like money from friends or family or unemployment. It also includes free food or shelter. The income limit for SSI is the federal benefit rate (FBR). The FBR is $783 per month for an individual and $1,175 for a couple in 2020.
Whose income counts for SSI?
Under SSI, Social Security considers the income of people you live with when calculating your countable income. If you live with a spouse, part of your spouse’s income will be included. For disabled children, Social Security counts part of the parents’ income as the child’s own.
How is income counted?
Social Security doesn’t count all income toward the SSI limit. If you are working and need special impairment-related work expenses, you can deduct these expenses from your income. For example, if you need special transportation to get to work, Social Security will deduct the cost from your income. Other types of non-countable income include:
- The first $20 of most kinds of income your receive each month
- Food stamps
- Tax refunds
- Public benefits based on need
- Loans that you have to repay
Earned income exclusions
Social Security will also reduce your countable income with certain income exclusions. Specifically, Social Security excludes the first $0 of income and $65 in earned income. They also deduct one-half of all earnings over $65 per month. For example, if you make $1,500 per month, Social Security will deduct the first $65. Then, Social Security deducts half of the rest of the earnings. It looks like:
- $1,500-$20 = $1,480
- $1,480-65 = $1,415
- $1,415 divided by half = $707.50
- $707.50 is under the federal benefit rate of $783. However, your income will be subtracted from the SSI rate. Therefore, you would receive $75.50 per month in SSI benefits.
Max income amounts and SSI
Under Social Security’s earned income exclusions, you can earn a maximum of $1,650 per month and still qualify for SSI. Generally, a couple can have about $2,400 in earned monthly income and still receive a payment from SSI. Additionally, Social Security won’t count about $7,600 of any disabled student’s yearly income.
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