When you apply for disability benefits through Social Security and you’re approved, certain life circumstances will determine whether you receive SSI, SSDI, or some combination of both. In general, the longer you’ve worked, the more likely you are to receive SSDI. SSI is a need-based program for people whose disability has prevented them from building a strong work history.

Because of the differences between SSI and SSDI, people who apply for disability need to understand the rules for each program. One of the most drastic differences is how unearned income, such as investment income, affects eligibility.

Earned and Unearned Income for Disability Applicants

SSI is known for its numerous restrictions on income and assets. Recipients of this program often face the prospect of losing benefits if they start earning money again, which can dissuade them from trying to improve their financial outlook. Any amount of money over $20 in a single month, including investment income, can potentially decrease the monthly SSI payment.

Fortunately, SSDI does not come with the same number of restrictions the SSI has. Whereas SSI is a need-based program that is reserved for very low-income recipients, SSDI is a form of disability insurance. People who pay Social Security taxes have already created this safety net to draw from if they become disabled.

For that reason, investment income does not impact eligibility for SSDI. All that’s required to continue receiving SSDI payments is a qualifying disability, and while income can affect your disability status, it must be earned income. It also must exceed the amount that Social Security defines as “substantial gainful activity (SGA),” which is currently set at $1220 in 2019. Once an SSDI recipient starts engaging in substantial gainful activity, they are allowed a trial work period before their benefits are ended.

If you’re an SSDI recipient, don’t let the fear of losing your benefits affect your willingness to plan for the future. Investment income, like most other forms of passive income, can make a huge difference in the life of someone who can no longer work for a living.

If you have questions about disability and how your income might affect it, reach out to us by phone, email, or text message to schedule a free consultation. Katherine has helped many people find their way through the twists and turns of Social Security law, and she can help you, too. Reach out to us today.