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What Types of Income Do You Have To Report To Social Security Disability?
Whether you currently receive Social Security disability benefits or happen to be going through the application process, you must report income received from wages and other sources to the Social Security Administration. It may sound simple enough, but the challenge in reporting different types of income to SSD comes from there being two programs that pay disability benefits.
The programs, Social Security Disability Insurance and Supplemental Security Income, each have different sets of rules used to determine eligibility that affect the reporting of income. The following information about types of income may help you to avoid mistakes that could result in a denial of your application for benefits or termination or reduction of benefits. After you read through it, schedule a free consultation with a Social Security disability lawyer at MJ Ellis Disability Law to learn more.
Identifying different income sources
There are four general types of income that may affect your eligibility for SSD benefits or the amount that you receive from Social Security each month depending on whether you receive SSI or SSDI benefits:
- Unearned income: Payments received from a pension fund, Social Security retirement, state unemployment benefits, interest and dividends from investments, and money received as gifts are some examples of unearned income. Think of unearned income as money that you receive that is not in exchange for your labor or services.
- Earned income: A simple way to distinguish it from unearned income is to think of earned income as compensation received for work or services that you perform for another party or as payment for something made or created by you and sold. For example, wages or salary earned at a job or income derived through self-employment would be earned income. Earned income through self-employment also includes royalties or money received on the sale of works produced by writers and artists.
- In-kind income: The value of food or shelter that someone receiving or making an initial application for disability benefits through SSI is in-kind income that must be disclosed to Social Security when received through friends or relatives. The SSI program does not treat food and shelter received from a charitable organization or government-funded community organization to be in-kind income.
- Deemed income: Those applying for SSI may have to report the income of a parent or spouse to Social Security as deemed income that is counted as available for support of the person applying for or receiving SSI benefits.
How each time of income affects eligibility depends on whether benefits are payable through SSI or SSDI.
Why do you need to make an income report to SSD?
To help you to understand the reason SSD asks for wage and income information, you need to look at the fundamental difference between the SSI and SSDI programs. SSI is a needs-based program while SSDI, which is funded through Social Security taxes paid on income you earn at a job or through self-employment, is not.
You must have worked long enough and earned income that was subject to payment of Social Security taxes and be disabled to qualify for SSDI. If you have income earned from work activities, it must be reported to Social Security because the amount earned may indicate that you are not disabled within the definition used under the SSDI program.
Income in addition to wages that you must report under the SSDI program include the following:
- Workers’ compensation benefits.
- Benefits from a public disability program.
- Vacation and sick pay.
SSDI rules do not take into consideration unearned income in determining eligibility or the amount of the benefits that you receive. However, the same is not true for recipients of SSI benefits whose resources cannot exceed $2,000 for an individual and $3,000 for married couples.
As a needs-based program that limits the income and resources of recipients, SSI requires disclosure of earned, unearned, in-kind, and deemed. There are, however, some exclusions that help reduce the amount of income that you need to report.
For example, the first $20 of monthly unearned income may be excluded from reporting. You also may exclude the first $65 of monthly earned income and one-half of the balance from the income you must report. If you did not have unearned income during a particular month, you may use the $20 exclusion to further reduce the earned income that you report.
Income rules for SSI and SSDI can be confusing
Complicated regulations determine what income to report, how to report it and the effect reporting may have on the benefits you receive through SSI and SSDI. Speaking with a disability lawyer at MJ Ellis Disability Law sorts through the complex rules to provide you with clear and easy-to-understand answers to questions about reporting different types of income to SSD. Speak to an SSD lawyer today.