Column: How does having a job impact your benefits?

Many parents of students receiving Supplemental Security Income (SSI) are reluctant to allow their high-school-age child work due to the misunderstood impact that earned income has on a benefit check. It is true that earned income will cause the SSI check to decrease, however, it is also true that earned income causes overall total income to increase. This happens because Social Security will exclude more than half of a person’s countable earned income before they reduce the SSI.

Did you know that the work incentive for SSI recipients under the age of 22 who are regularly attending school, called the Student Earned Income Exclusion (SEIE), allows for someone to exclude up to $7,180 of earned income per year and $1,780 per month?

Antonio Akins column graphicFor example, if someone earned $885 a month from working, Social Security would count only $400 of that amount against the $733 SSI check. This would leave them with $333 in SSI, plus $885 in earned income, for a total of $1,218. As you can see, a person receiving SSI who is also working always comes out on top.

In addition, what if I told you that by applying the Student Earned Income Exclusion (SEIE), a person receiving SSI and working can come away with even more money than what was described in the previous example? A student working part-time and earning about $598 a month gets to keep their full $733 SSI check and their $598 earned income due to SEIE. That is a total of $1,331 a month, which is nearly double the amount of the SSI benefit.

Did you also know that when a person receiving SSI goes to work, not only do they increase their earnings and develop a work ethic along with valuable experience and skills, but they also pay into Social Security? This means if they pay enough into Social Security, they will eventually earn enough credits to draw disability benefits off of their own work record. In other words, they’d be eligible for Social Security Disability Insurance (SSDI).

The maximum amount of work credits that anyone can earn, disability or not, is four per year; one credit is $1,220 of earned income. Therefore, if someone earns more than $4,880 a year, they would have earned the maximum amount of credits anyone could earn in a given year. It is also important to know that the younger you are, the fewer credits you need in order to draw off of your own work record. For example, a person younger than 24 years old, need only to have earned six credits in order to draw off of their own work record. That is a total of $7,320 of gross earned income. For someone who started working part-time when they were 16 years old, it is likely that at the time they turn 18, they’ll be eligible to draw off their own work record. This is beneficial because having Social Security Disability Insurance (SSDI) as opposed to Supplemental Security Income (SSI) means having access to more extensive and supportive work incentives.

As you can see, it’s not always true that working hurts benefits, talk to a benefits specialist with more questions. You will then be able to make an informed choice regarding your employment goals. Don’t let fear of losing your benefits remain a barrier to you accepting more pay, hours or even a job!

Antonio Akins is the Benefits Specialist for Hamilton County Developmental Disabilities Services.

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