What Types of Income Do You Have To Report To Social Security Disability?
If you are disabled and applying for or already receiving Social Security disability benefits, you must report the income you receive to the Social Security Administration. There are, however, different types of income that may or may not get reported depending on whether your benefits are through the Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) programs.
Failing to report income can delay or jeopardize your right to receive benefits. A Social Security disability advocate can help you to determine what type of income you receive and whether or not it needs to be reported. The following information offers general information about the types of income and how they apply to each of the disability programs.
Types of Income Do You Have To Report To Social Security Disability
The Social Security Administration refers to four types of income for its disability programs. Earned income and unearned income apply to both SSI and SSDI. In-kind and deemed income apply to applicants and recipients of benefits through the SSI program.
The following are brief explanations of each type of income:
- Earned income: Wages earned by working for an employer; self-employment earnings; and royalties, such as a writer may receive from sales of a published work, are examples of earned income.
- Unearned income: Social Security retirement, pension payments, unemployment benefits, interest, and dividends are examples of unearned income. Cash received as gifts from relatives would be another example of unearned income.
- In-kind income: Food or shelter provided by a friend or relative without charging fair market value is treated as in-kind income under the SSI program.
- Deemed income: The eligibility guidelines of the SSI program include a portion of the income of a spouse or parents with whom an applicant or recipient resides as deemed income.
Each of the programs takes into consideration at least one type of income for SSD eligibility when considering whether an applicant qualifies for benefits and the amount a person is entitled to receive.
Income and the SSI program
The SSI program provides benefits to blind or disabled individuals with very limited income and financial resources whose disability prevents them from working. Unlike the SSDI program that requires eligible applicants to have worked and paid into the Social Security system through payroll or self-employment taxes, an adult or child may qualify for SSI without having a work history.
All four types of income received by a person must be reported under the SSI program, but some of it may not count toward determining eligibility or the amount of benefits. Countable income, which reduces what someone on SSI receives in monthly benefits, does not include the following:
- The first $65 of monthly earned income and one-half of earned income above the first $65.
- The first $20 of earned or unearned income. This exclusion can be combined with the $65 exclusion described above.
- Refunds from income tax returns.
- Money received as a loan that must be repaid.
- Food or shelter provided by nonprofit agencies does not count as in-kind income as it would, were it provided by a friend or relative.
This is not an exhaustive list of income that may not count under the SSI program. You should discuss your particular situation with an SSD advocate to find out the types of income that you must report.
Types of income to report under the SSDI program
The SSDI program, which is funded through Social Security taxes on earnings from employment and self-employment, does not require you to report unearned income. It does, however, require the reporting of income earned through employment and self-employment. Other sources of income that must be reported include the following:
- Workers’ compensation benefits.
- Disability payments received through a state-administered program.
- Sick pay.
- Vacation pay.
SSDI does not limit unearned income, but the amount you receive from work or self-employment may affect your eligibility for benefits. You cannot qualify for benefits or remain eligible to continue receiving them if you are not disabled. Earned income may be used by Social Security to determine that you are no longer disabled by engaging in substantial gainful activity.
A person capable of engaging in substantial gainful activity is not disabled under the definition used by the Social Security Administration. If you earn more than $1,310 a month in 2021, the SSA can determine that you are capable of engaging in substantial gainful activity and terminate your benefits. A person who is statutorily blind may earn up to $2,190 a month.
Recipients of SSI and SSDI may attempt to return to work through a trial work program. Money earned during a trial work period, even if it exceeds the substantial gainful activity amounts, will not reduce or otherwise affect your monthly benefits. Speak to an SSD advocate at London Disability for more information about work incentive programs and types of income under the Social Security disability programs.