One of the primary differences between Social Security Disability and Supplemental Security Income (SSI) is that SSI is needs-based. This means that any increase in your income, temporary or not, can reduce the amount of money that you will get from Social Security.
What types of income can reduce my SSI benefits?
- Any wages you earn
- Any self-employment income
- Other earnings such as gambling winnings (including the lottery), inheritances, or settlements from lawsuits
It’s always important to report any income you receive to Social Security, even if it isn’t wages.
A case involving a disabled 58-year-old man from Arkansas who was on SSI shows how this works.
- According to The Dallas Morning News, John Dodds won $1,000 through a scratch-off lottery ticket in early December 2009. For 2009 Dodds received $674 per month from SSI, which he use to pay for rent, utilities, and other living expenses.
- Dodds filed an unearned income statement to declare the money to SSA. On the day after Christmas, Dodds received a letter from SSA informing him that his SSI for 2010 would be reduced by $980.
- Social Security will find out about any income you receive where there is a paper trail.
- The IRS and Social Security talk to each other. So, eventually, even if you don’t report income, they will find out about it and reduce your SSI benefits.
How are my SSI benefits reduced if I return to work?
If you’re working, the first $65 ($85 if you have no other income in a month) of earnings in a month are not counted toward SSI.
After that, SSA reduces your SSI benefits $1 for every $2 you earn in a month. They also deduct from the monthly earnings any monthly expenses that you have, which allow you to work — such as a special handicapped accessible van that allows you to get to work.
One of the biggest concerns SSI recipients have about going to work is the possibility of losing Medicaid coverage. If you return to work, your SSI payments may be reduced or stopped, but you may be able to keep your Medicaid coverage. Contact Social Security for details about your situation if you’re on SSI and considering returning to work.
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