What Items Constitute Income for the Purpose of Figuring Social Security Benefits?

Some Social Security benefits are given to people who have low income and poor living conditions. The program that pays benefits based on low income is called Supplemental Security Income. When applying for benefits based on your low income, you need to show the Social Security Administration proof of your low income and resources.

Types of Income

The Social Security Administration considers earned and unearned income when figuring out a person's level of income. Income, for the purpose of Social Security benefits, is any type of money you earn that helps you to provide for your family needs. Earned income includes wages you receive from your work, business profit if you are self-employed, and royalties earned from the publication of your work. Unearned income includes all types of income that do not come from your personal work, such as public benefits, annuities, prizes, proceeds of life insurance, child support and alimony payments, gifts and rental income.

Items Counted as Income

The Social Security Administration considers almost all types of income you receive when determining your benefits. However, some types of unearned income might be excluded. Income that counts to determine if you are eligible to receive benefits would be your wage, veteran benefits, worker's compensation and unemployment benefits. The Social Security office does not take into consideration the first $20 of most income you have when figuring out your income. Neither does it count the first $65 of your job-related wages, or half of your job-related wages after the first $65. If you receive energy assistance, shelter or food stamps, these benefits are not included in your income.

Items Counted as Resources

When figuring out your income, the resources you have are also taken into account to determine whether you qualify to receive benefits or not. Resources include anything you own that have an economical value. The Social Security Administration considers bank accounts, real state, cash and investments in stocks and bonds as part of your resources. As of 2011, you qualify for benefits if the value of all your resources does not exceed $2,000 if you are single or $3,000 if you are married. Some resources you might have that do not influence the total value allowed by the Social Security Administration are the house you live in, the value of life insurance up to $1,500, a vehicle, and burial funds up to $1,500 for you and $1,500 for your spouse.

Supplemental Security Income

Supplemental Security Income (SSI) is the program that pays benefits to low-income individuals who are disabled, blind or older than 65 years of age. When you apply for the SSI program, you must meet all the requirements for income and resources, plus physical requirements, in order to be eligible to receive these benefits. As of 2011, when counting your income, the Social Security Administration usually considers more than $20,000 per year as substantial income. However, income limits depend on your state's average income.

References

• SSA: Supplemental Security Income (SSI) For Noncitizens, April, 2008
• SSA: How Work Affects Your Benefits, January, 2011
• SSA: How Workers' Compensation And Other Disability Payments May Affect Your Benefits, March, 2010
• SSA: Definition of Unearned Income, February, 2011
• SSA: Definition of Earned Income, February, 2011