How a Gift Could Cause You to Lose Your Disability Benefits

How a Gift Could Cause You to Lose Your Disability Benefits

Gifts and Disability-BenefitsThere are many factors that determine whether or not you’ll be able to qualify for Social Security benefits, whether you are applying for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). Going through the application process can be challenging and often requires an appeal process if you were initially rejected. This means that once you’ve finally been approved, you’ll want to do everything possible to ensure that you don’t lose your benefits. Because of this, you might be worried about receiving gifts while on SSDI or SSI.

Receiving Gifts While on SSDI

Fortunately, Social Security Disability Insurance is not a need-based program. Qualification depends on your inability to work as a result of a disabling injury and on the amount of Social Security credits you’ve earned by paying Social Security taxes out of your paychecks. This means that there’s no limit to how much you could have earned prior to experiencing your disability.

There is, however, a limit to how much you can earn as income while you are collecting disability benefits. This limit changes every year in order to keep up with inflation. For 2018, you can make no more than $1,420 a month in earned income while on SSDI. However, you won’t lose your benefits if you do. Instead, they will take out $1 from your payments for every $2 that you go over the limit.

The question is, how will financial gifts affect you? If someone gives you a thousand dollars and that takes you $1,000 over the limit, will that mean that you will lose $500 from your benefit payment? The answer is no.

Financial gifts are not considered earned income in regards to SSDI. They are considered unearned income and are excluded from your benefit payment calculations. Additionally, selling items and earning interest on investments and savings are not considered earned income either. Your assets also have no impact on your SSDI.

Receiving Gifts While on SSI

While you won’t have to worry about financial gifts affecting your SSDI payments, you will have to worry about it if you are collecting SSI. This is because SSI is a need-based program. Because of this, there are much more strict income requirements in place.

To qualify for SSI payments in 2018, you will need to make less than $1,180 a month or less than $1,970 a month if you are statutorily blind. Any income you earn that puts you over this threshold will mean that you no longer qualify for SSI – this includes any financial gifts that you are provided.

However, if you are given money in the form of a loan, it will not affect your SSI as long as you can prove that it is a loan. This means that you will need a valid contract that allows the lender to force you to pay the loan back under the law.

The contract must include a repayment agreement that contains no conditions or caveats; for example, a condition that says you don’t have to pay the loan back if you aren’t able to qualify for SSI. You’ll also need to provide the Social Security Administration with a structured repayment plan for your loan, one that is feasible for you to pay.

Although you won’t be affected when receiving gifts while on SSDI, financial gifts could disqualify you from SSI. Call us at Social Security Disability Advocates USA at (602) 952-3200 to schedule a free consultation today.

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