As of January 2010, Supplemental Security Income provided monthly cash benefits to 7.5 million U.S. residents. To qualify, recipients must be at least age 65, blind or disabled with limited income and resources. Over 62 percent of recipients were disabled adults. The SSI program–run by the Social Security Administration--includes work incentives that encourage disabled SSI recipients to become more self-sufficient through working. In December 2009, over 248,000 SSI disability recipients were working.
Income Is Work
SSI rules allow recipients to earn some amounts without reducing benefits. Gross wages only count if they exceed $65 monthly. Higher wages receive two exclusions. A $20 general exclusion applies first to non-work income such as pensions. If there is no non-work income, the exclusion offsets earnings. The second exclusion--the earned income exclusion--deducts $65 plus half the remainder of earnings. The result offsets SSI benefits. If an SSI recipient's only other income is gross wages of $600 monthly, first the $20 general exclusion and then the earned income exclusion are applied to the wages.
Work Plus Other Income
If the SSI recipient has income in addition to the wages, the amount of wages necessary to reduce benefits to zero decreases. For example, if the recipient receives a small pension of $500, under SSI rules, a general income exclusion of $20 reduces the amount of pension affecting SSI to $480. This amount reduces the basic SSI benefit rate of $694 to $214. Gross wages of $493 or more would reduce the SSI benefit to zero, since even after application of the earned income exclusion, countable earned income would be $214.
Impairment Related Expenses
The amount the disabled SSI beneficiary can earn without losing eligibility increases if the recipient has impairment-related work expenses, such as special equipment or medications needed to do his job. The SSA will deduct the reasonable cost of such items from wages before applying the standard exclusions. Wages and expenses must occur in the same month. For example, the SSI recipient pays an attendant $300 monthly to help him get to and from work. Social Security deducts $300 from gross wages, then the standard general and earned income exclusions.
A Plan for Achieving Self-Support–PASS--allows SSI disabled recipients to set aside some of their income–including earnings from work--as part of a plan to become self-sufficient. For example, if the recipient's only income is SSI of $694 and he wants to set aside $200 monthly to buy special computer equipment to go with schooling, Social Security does not increase SSI. But if the recipient starts to work and earns $300 monthly, under an approved PASS plan the SSA can ignore $200 of the monthly wages. Only $100 counts.
Work and Medicaid Coverage
SSI disability does not terminate eligibility due to work, even if wages reduce the benefit payable to zero. Work above the income limits only temporarily suspends SSI benefits. If disability beneficiary has gross wages of $1,500 monthly, Social Security ignores the first $65--$85 if there is no non-work income--and then half the remainder. The result --$717.50–exceeds the federal benefit rate of $694 in 2010. The recipient will not receive a check. However, even if work continues indefinitely, Medicaid coverage continues as long as the recipient needs it. If wages decrease, benefits can resume if the disabled individual still meets SSI eligibility rules.