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Does Passive Income Affect Social Security Benefits?

Published by Tony Ficek

A balance scale holding a stack of coins on one side and two stacked letter "S's" on the other.

At Ficek Law, PC, we understand that navigating the complexities of Social Security Disability (SSD) benefits can be challenging. This is especially true when it comes to understanding how different types of income affect your eligibility. Many of our clients ask, “Does passive income affect Social Security Disability benefits?” This is a pertinent question, especially for those who have worked hard throughout their lives contributing to the Social Security System.

Firstly, let’s clarify what qualifies as “passive” income, or unearned income. Passive income generally refers to money received from sources other than a job. This may include income from investments, rental properties, or other ventures that don’t require active participation.

Understanding how this type of income influences your Social Security benefits is crucial to protecting your financial security. To learn more about how passive income impacts SSD, continue reading.

How Passive Income Affects SSDI vs SSI Benefits

When it comes to Social Security Disability Insurance (SSDI), passive income typically does not impact your benefit payments. SSDI is based on your work history and the payroll taxes you have paid. Therefore, passive income like rental income, dividends, or investment earnings is not considered when determining your SSDI benefits.

However, the situation is different for Supplemental Security Income (SSI). SSI is a needs-based program designed to help aged, blind, and disabled individuals with limited income and resources. This means SSI eligibility is income-sensitive, so passive income can reduce your benefits.

How Does Unearned Income Affect SSI?

The Social Security Administration (SSA) considers any earned and unearned income when calculating your SSI benefits. This means that if you’re receiving passive income, it could potentially reduce the SSI amount you’re eligible for. It may even disqualify you from receiving SSI altogether.

It’s important to note that the rules surrounding passive income and SSI are complex. Each case is unique, and several exceptions and specific thresholds must be considered. For instance, the first $20 of most types of unearned income are not counted against SSI benefits. The SSA also does not consider loans that you must repay as countable income.

Contact Ficek Law, PC

At Ficek Law, PC, we understand that qualifying for disability benefits is a difficult process. The SSA’s guidelines for eligibility can seem daunting. It’s only reasonable to have questions about what type of passive income could disqualify you from receiving benefits. We are here to provide the professional, compassionate guidance you need to navigate these waters.

In conclusion, while passive income doesn’t affect SSDI, it can impact SSI eligibility and the benefit amount you receive. If you have concerns or questions about passive income while on SSDI or how unearned income affects SSI, contact Ficek Law, PC. Our disability attorney Anton G. Ficek commits to helping clients understand their rights and ensuring they receive the benefits they deserve.

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