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What are the unearned income exclusions?

2137. What are the unearned income exclusions?

As with earned income, certain unearned income exclusions are authorized by other Federal laws as well as by Title XVI. Countable unearned income can never be less than zero. However, there is one unearned income exclusion that can be applied to earned income (see (M) below). Unearned income exclusions are applied in the following order:

  1. Exclusions authorized by Federal laws other than Title XVI. These include, but are not limited to, exclusion of most benefits provided under the:

    1. Food Stamp Act (value of food coupons);

    2. National School Lunch and Child Nutrition Acts;

    3. Older Americans Act;

    4. National Housing Act (various types of Federal housing assistance);

    5. Agent Orange Product Liability Litigation;

    6. Radiation Exposure Compensation Trust Fund (RECTF);

    7. Japanese-American and Aleutian Restitution Payments;

    8. Payments to an individual from any source because of his or her status as a victim of Nazi persecution;

    9. Any earnings an individual contributes to his/her TANF or Demonstration Project Individual Development Accounts, any matching funds, and interest on the earnings and matching funds; and

    10. National Flood Insurance Income Exclusion Act of 2005.

  2. Any public agency's refund of taxes on real property or food;

  3. Assistance based on need and funded wholly by a State and/or one of its political subdivisions (including Indian tribes). It does not matter whether these payments are made directly to an individual or are paid to someone else on his or her behalf. This exclusion includes all State payments used to supplement SSI;

  4. Any portion of a grant, scholarship, fellowship, or gifts used for paying tuition, fees or other necessary educational expenses (effective 6/1/04). However, any amount set aside or actually used for food or shelter is not excluded;

  5. Food raised by an individual or by his or her spouse if consumed by the household;

  6. Assistance received under the Disaster Relief and Emergency Assistance Act and assistance provided under any Federal statute because of a catastrophe declared by the President to be a major disaster (see §2138);

  7. The first $60 per calendar quarter of unearned income if received infrequently or irregularly; for example, if the income is received only once during a calendar quarter from a single source and the individual did not receive it in the month immediately preceding that month or in the month immediately following that month regardless of whether or not the payments occur in different calendar quarters, or if its receipt cannot reasonably be expected;

  8. Payments received by certain recipients under the Alaska Longevity Bonus program;

  9. Payments to an individual for providing foster care to a child placed in the individual's home by a qualified agency;

  10. Any interest earned on excluded burial funds and any appreciation in the value of an excluded burial arrangement left to accumulate and become part of the separately identifiable burial fund (see §2161);

  11. Certain home energy and other needs-based support and maintenance assistance (see §2139);

  12. One-third of support payments made by an absent parent to or for an eligible child;

  13. The first $20 per month of an individual's total unearned income other than income based on need. Payments are based on need if the recipient's income is a factor in determining eligibility for the payments. (Any portion of this exclusion that cannot be used up against unearned income is applied against earned income received in the same month);

    Note: A needs-based payment funded solely by any combination of a State and its political subdivisions (including Indian tribes) is called "assistance based on need" and is excluded totally (see (C) above). A needs-based payment funded wholly or partially by a non-governmental organization or by the Federal Government is called "income based on need." It does not qualify for this $20 general exclusion; (See §2139 for an exclusion that may apply to assistance provided by nonprofit organizations.)

  14. Any unearned income used to fulfill an approved plan for achieving self-support in the case of a blind or disabled individual who:

    1. Is under age 65; or

    2. Received SSI based on blindness or disability for the month he or she turned 65;

  15. Federal housing assistance, whether provided directly by the Federal Government or through other entities such as local housing authorities, nonprofit organizations, etc.;

  16. Any interest accrued on (or after April 1, 1990) and left to accumulate as part of the value of an excluded burial space purchase agreement;

  17. The value of any commercial transportation ticket received as a gift and not converted to cash. This applies to travel among the 50 states, District of Columbia, Puerto Rico, Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands;

  18. Hostile fire/imminent danger pay from the Uniformed Services received in or after October 1993;

  19. Payments received from a State fund to aid victims of crime;

  20. Relocation assistance provided under Title II of the Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970;

  21. Austrian Social Insurance payments that are based, in whole or in part, on wage credits received for certain losses suffered before and during World War II;

  22. Payments made by the Dutch Government under the Netherlands Act on Benefits for Victims of Persecution 1940-1945 to individuals who were victims of persecution and suffering from illnesses or disabilities resulting from the persecution.

  23. Dividend or interest income earned on countable resources or resources excluded under other Federal laws (effective 7/1/04).

Note: An eligible couple gets the same income exclusions as an eligible individual, although there is a higher benefit rate for a couple.

Last Revised: Feb. 2, 2007

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