Many federal benefits and tax breaks feature income limits, reducing what you get if your income is within a certain range and sometimes just disqualifying you if you earn too much. The calculation is often easy to make, as it typically involves taking your adjusted gross income from your tax return and comparing it to a table of income limits. It's not such an easy matter to see where you stand in regard to qualifying for Supplemental Security Income, or SSI, but don't let that dissuade you from looking into it.
What Supplemental Security Income is
Supplemental Security Income, managed by the Social Security Administration but a different beast entirely from Social Security retirement benefits, provides income to disabled, blind, or elderly people of limited means and also to some blind or disabled children. As of February, about 8.4 million people collected SSI, and the average monthly benefit was $540 (which amounts to $6,480 per year). If you qualify, know that you may be able to receive SSI in addition to other benefits, such as Social Security retirement benefits, Social Security disability benefits, Medicaid, food assistance, and so on. Some states offer additional supplemental income, too.
While your eligibility for SSI is based in part on how limited your income and/or assets are, you don't have to have worked any particular amount in order to qualify, as you do with Social Security retirement benefits. Instead, you qualify by your need.
The SSI program is designed to help those of limited means who are one or more of the following:
- Elderly (aged 65 and up)
- Disabled (any age, including children)
- Blind (any age, including children)
There are various rules and guidelines to help you determine whether you qualify as disabled, but here we'll focus on qualifying income-wise.
Income limits: the basics
In a nutshell, the process for qualifying for SSI features two steps. First, the Social Security Administration looks at your gross income and subtracts any income that it doesn't count. What's left is your "countable income." Next, it takes the maximum monthly Federal SSI benefit (which is $733 for individuals in 2015 and $1,100 for couples) and subtracts your monthly countable income from it. What's left is the monthly SSI Federal benefit that you qualify for.
The Social Security Administration illustrates the calculations succinctly, in this way:
1. Your Total Income
-Your income that we do not count
= Your countable income
2. SSI Federal benefit rate
-Your countable income
= Your SSI Federal benefit
So what constitutes "countable income"? Well, the SSA is interested in all your income -- wages, self-employment earnings, royalties, pensions, Social Security benefits, disability benefits, interest income, unemployment benefits, monetary gifts, and more. It will also count "in-kind" income, if you're receiving food or shelter for free or at a discount. The value that you don't pay for is considered in-kind income. Similarly, if you live with a spouse, parents, or a sponsor (if you're an alien), then part of their income is deemed applicable to you.
From your total income, the SSA subtracts income that it doesn't count. Following is a list of many, but not all, of the kinds of income that won't count against you as you seek to qualify for SSI. (For a fuller list and more info, click here.)
- The first $20 of most income received in a month.
- The first $65 of earnings and one–half of earnings over $65 received in a month.
- The value of Supplemental Nutrition Assistance Program (a.k.a. food stamps) received.
- Income tax refunds.
- Home energy assistance.
- Assistance based on need funded by a state or local government, or an Indian tribe.
- Small amounts of income received irregularly or infrequently.
- Grants, scholarships, fellowships, or gifts used for tuition and educational expenses.
- Food or shelter based on need provided by nonprofit agencies.
- Loans to you (cash or in-kind) that you have to repay.
Keep in mind, too, that receiving new incomes can affect the benefits you receive, as can where you live or whom you live with. Changes in income or living arrangements can also change your benefits.
As a simplified example of how it all works, if your monthly income is about $1,100 and $700 of that doesn't get counted, your total countable income per month will be $400. Subtract that from $733 and you'll get a monthly SSI check of $333, or about $4,000 for the year. It's not a king's ransom, but for those scraping by on very little money, it can make a big difference.