Module #3

How Income and Resources Impact SSI Eligibility and Payment Amount

This toolkit will help you understand the Supplemental Security Income (SSI) program’s financial eligibility rules as they are likely to apply to transition-aged youth (ages 14 through 25). Using this toolkit will aid you in explaining some of these basic concepts to youth, their families, and others who assist them. 

Background on SSI, Payment Rates and Medicaid

SSI is a means-tested cash payment program administered by the Social Security Administration (SSA).  An eligible individual with a disability must have limited income and limited resources.  Both earned income and unearned income are relevant in determining eligibility and monthly payment amounts.  Additionally, to be eligible for any SSI payment, an individual’s countable resources can be no more than $2,000. 

During calendar year 2019, the maximum SSI federal benefit rate (FBR) is $771 per month.  The FBR is often adjusted annually based on a cost-of-living index.  States can provide an optional SSI state supplement.  For example, if State X provides a $50 state supplement the maximum 2019 SSI payment rate will be $821 per month.  Approximately 32 states provide an SSI state supplement.   

See Print and Go Tip Sheet, “An SSI Beneficiary’s Right to Automatic Medicaid Eligibility in Most States.”

The Treatment of Income in Determining Monthly SSI Payment Rates

A monthly SSI payment is determined by subtracting countable income from your state’s SSI base rate (FBR plus optional state supplement). 

SSI Definitions of Earned and Unearned Income 

The SSI program defines income as items received as cash, or in-kind, that can be used to meet a person’s need for food or shelter.  Earned income includes, for example, wages, net earnings from self-employment, royalties on published work, and honoraria payments (like a speaker’s fee).  Unearned income is any other type of income including, for example, Social Security payments and unemployment compensation. It is critical that all iincome be reported to the Social Security Administration to ensure that accurate cash payments are calculated. Poor reporting of income will ultimately result in potential overpayments under the SSI program, given the means-tested nature of SSI.

 

Unearned Income Exclusions 

The first $20 received in a month is excluded as general income exclusion. Other common unearned income exclusions include gifts used for paying tuition or education expenses (if used for that purpose within nine months), income which is set aside in an approved Plan to Achieve Self Support, and certain federal assistance to support higher education.  

Earned Income Exclusions as SSI Work Incentives 

SSI Calculation Worksheet online

The SSI program determines countable earned income after subtracting a range of monthly earned income exclusions, including: 

  • Earned income of full-time students, under age 22, up to $1,870 gross per month or $7,550 per year in 2019 
  • Any portion of the $20 general income exclusion not applied to unearned income 
  • $65 per month and one half of remaining earned income in a month 
  • Impairment related work expenses, blind work expenses, and income set aside in an approved PASS 
  • Income tax refund payments

The Use of Earned Income Work Incentives in the SSI Payment Calculation


Student Earned Income Exclusion:  Josiah, age 16, is a full-time high school student, receives SSI payments of $771 per month, and earns $865 gross per month during July and August.  During the school year he is expected to work fewer hours and earn $365 gross per month. 

Josiah qualifies for the Student Earned Income Exclusion.  This means all of his earned income will be excluded during both the summer months and the school year months.  Josiah’s SSI payment will remain at $771 per month despite his earnings.  (For more details on the Student Earned Income Exclusion, see Toolkit # 5 – Special Work Incentives for Youth.) 

As Josiah’s VR counselor you can encourage him to work, by telling him about the Student Earned Income Exclusion.  You can assure him and his family that, based on his expected earnings, all his earnings will be ignored by the SSI program.

SSI’s $65 Plus 50 Percent Income Disregards:  Assume Josiah is either not a student or a college student and is age 22 or older.  He would not be eligible for the Student Earned Income Exclusion.  Here is the way his SSI payment would be calculated if he earned $865 gross in a month: 

$865 Gross Earnings $771 Monthly SSI Rate
- 65 Earned Income Exclusion - 390 Countable Income
- 20 General Income Exclusion $381 New SSI Monthly Payment 
780  
- 390 Additional 50% Exclusion    
$390 Countable Earned Income    

Josiah’s total disposable income is now $1,246 ($865 gross earnings plus the $381 SSI payment), less any tax withholding.  This means Josiah has up to $475 more per month to save or pay for other things.  Although not as generous as the Student Earned Income Exclusion, this is still a powerful work incentive. 

As Josiah’s VR counselor, you can explain to him that as his earnings increase, his SSI payment will go down by $1 for every additional $2 of gross earnings. 

(These are just some of the SSI work incentives available to individuals served by State VR agencies.  For a more expanded discussion of these and other work incentives, see our Toolkit # 4 – Using Work Incentives to Create Economic Safety Nets and Pathways to Work.)

The SSI Program’s Treatment of Resources

A resource is money or anything an individual owns and can turn into cash to pay for food and shelter.  If an individual exceeds the SSI program’s $2,000 resource limit, then he or she will not be eligible for SSI.   

The SSI program will treat money received as income in the month of receipt and as a resource in later months, subject to any income or resource exclusions.  Resources are always counted as of the first day of a calendar month.  If a beneficiary’s countable resources are more than $2,000 on the first of a month, he or she will not be eligible for an SSI payment for that month or any later months if countable resources remain above $2,000. 

The SSI program will treat money received as income in the month of receipt and as a resource in later months, subject to any income or resource exclusions.

Common SSI Resource Exclusions 

Certain resources are not counted for purposes of the $2,000 limit.  These include: 

  • The house the SSI beneficiary lives in 
  • Household goods and personal effects 
  • One vehicle, if used for transportation for the SSI beneficiary or a member of his/her household 
  • term life insurance (that is life insurance with no cash surrender value) no matter who purchased it 

See Print and Go Tip Sheet, Resource Exclusions of Importance to Transition-Aged Youth and Their Families.