Supplemental Security Income (SSI) recipients are typically subject to strict income limits, but recipients under age 22 who are students may be able to earn significantly more without jeopardizing their benefits. It’s part of the Social Security Administration’s (SSA) efforts to encourage SSI recipients to get education or training so they can join the workforce.
Ordinarily, most income that SSI recipients earn is deducted from their benefits. The Student Earned Income Exclusion (SEIE) allows students to exclude up to $1,903.45 monthly from their countable income. This amount, however, is subject to an annual cap of just $7,670 (in 2020). The penalty for exceeding this annual cap is harsh: If students earn more than the cap in a given year, their benefits are reduced on a dollar-for-dollar basis.
These income caps rise each year in line with the Social Security Administration's annual Cost-of-Living Adjustment (COLA) formula, which is meant to ensure the value of benefits are not eroded by inflation.
To qualify for this exclusion, students must be under 22 years old. If attending a university, community college, or other higher education institute, students must be enrolled at least eight hours per week to qualify for the SEIE. People may also qualify if they are enrolled in a training course to prepare for employment at least 12 hours per week, or 15 hours per week if that training course is considered a shop practice.
In addition, high school and middle schoolers may qualify, as well as homebound students. If enrolled in grades 7-12, the student must be enrolled in classes 12 hours per week. (These thresholds may be waived if the student can’t meet them due to circumstances beyond her control.)
Click here and here to learn more about the SEIE.
This information is not intended to be a substitute for specific individualized tax, legal or estate planning advice as individual situations will vary. Neither Royal Alliance Associates, Inc., nor its registered representatives or employees, offer tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.
Securities and investment advisory services offered through Royal Alliance Associates, Inc. member FINRA/SIPC. Royal Alliance Associates, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Royal Alliance Associates, Inc. Special needs consulting services are not offered through Royal Alliance Associates, Inc.
Content provided by the Academy of Special Needs Planners, Copyright 2016