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  • Home
  • About Us
    • Attorneys
      • James R. Winkler
      • Richard D. Winkler
      • Jason W. Hake
      • Lindsey M. Albinski
      • Janet L. O’Hanlon
      • David S. Pollack
      • Daniel E. Brickley
  • Practice Areas
    • Personal Injury
      • Motor Vehicle Accidents
        • Long Island Car Accidents
        • Trucking Accidents
        • Motorcycle Accidents
        • Pedestrian Accidents
        • Serious Injuries
      • Workplace Injuries
        • Scaffolding and Ladder Falls
        • Struck By Object
        • Machinery / Equipment Injuries
        • Construction Accidents
      • Medical Malpractice
        • Birth Injuries
        • Brain Injuries
        • Misdiagnosis
        • Wrongful Death
        • Surgical Errors
        • Hospital Negligence
        • Failure to Diagnose
      • Slip and Fall Injuries
      • Wrongful Death
    • Divorce & Family Law
      • Child Custody & Visitation
      • Divorce Mediation
      • Equitable Distribution
      • Child Support
      • Orders of Protection
      • Spousal Support
      • Divorce & Family Law FAQ
    • Wills Trusts & Estates
      • Estate Planning
      • Elder Law
      • Powers of Attorney
      • Probate
      • Estate Administration
      • Wills & Trusts
      • Wills & Trusts FAQ
    • Real Estate
  • Case Results
  • Testimonials
  • Contact Us

Will Passive Income Affect My Social Security Disability Benefits?

What is Social Security Disability Insurance?

Social SecurityIf you’re receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), it’s natural to wonder if your benefits will be affected when you start generating income from a passive and/or semi-passive source. Allow our staff here at Winkler Kurtz to provide you with some clarity.

Will the government take back money that was already yours? Will additional funds make you ineligible for certain types of benefits?

The Social Security Administration (SSA) has a detailed explanation on their website, but let’s break it down piece by piece.

Only your income from work, self-employment and other sources will affect your eligibility for SSDI or SSI. Passive forms of income such as interest from bank accounts or dividends from investments do not affect your benefits.

If you earn over a certain amount from self-employment, the first $65 plus one dollar for every two dollars of earnings above that level may be deducted from your benefits. However, this won’t happen automatically. You must inform the SSA of any earnings above those limits by completing a SSA-7161 form and returning it to your local SSA office.

If you do not report this type of income, the SSA may assume that your reported earnings are incorrect and reduce or terminate your benefits as a result. You could even face criminal prosecution for fraud if the agency is not informed of the additional earnings – so don’t forget!

Bottom line: passive income earned through bank accounts, mutual funds and other investments has no effect on your Social Security benefits. And even if you exceed the limits for self-employment earnings, it’s still your responsibility to report this to the SSA so they can deduct the appropriate amounts from your monthly check.

One thing to keep in mind… the money you earn from a job or your small business will show up as income on your earnings record. That’s how the SSA determines whether you’re still eligible for benefits, and it could trigger an audit of your disability status if income is too high. This is covered in more detail below.

What About Monthly Earnings?

If your income is low enough to qualify for SSDI or SSI, the SSA doesn’t require you to report how much money is in your bank accounts or what investments you have. If you are earning income from a job or self-employment, however, the agency will want to know exactly how much you’re bringing in.

The SSA uses a formula to calculate your monthly earnings called an Average Indexed Monthly Earning (AIME). It starts with the first $885 you earn each month and then adjusts that amount based on how much income is necessary to equal the average wage for workers who have been working at least two-thirds of their adult life.

Adding up your monthly income from work and self-employment will determine whether you’re eligible for SSDI or SSI, as well as the amount of your benefits and how much could be deducted if you earn too much. If your earnings fall within a certain range, the SSA may ask you to submit additional medical evidence to support your claim.

If you want to be sure that your income is not disqualifying, it’s important to make an appointment with the SSA to discuss any earnings you receive from work or self-employment. Your local advocate can help you schedule these appointments and check on the status of your application.

Bottom line: Social Security benefits will NOT be affected by passive income such as interest, dividends or capital gains. However, the SSA will want to know how much you’re earning from work and self-employment – especially if it’s more than the monthly limit.

Contact Winkler Kurtz, LLP

If you have questions regarding social security, please don’t hesitate to contact a representative from our office and schedule your free consultation today.

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Client Testimonials

I cannot say enough about Rich and his staff. Everyone was more than accommodating from day one. You are treated like you matter, and not just another case for their firm. Rich offers advice every step of the way to get the most out of your case while still letting YOU choose which options are best. Coming from someone who has dealt with other attorneys, none compare to Mr. Winkler. His knowledge, and attitude are second to none. I would recommend Rich to anyone with an accident case. Believe me, you are in good hands. Thank you Rich and staff. Could not have asked for more!!

- Rob Pearsall

To Whom It May Concern, I’m a union painter and was badly hurt when I was involved in a workplace accident on a job site in Manhattan. I hired Richard Winkler to represent me and they have been great. He and his staff keep me informed and are making sure that I can continue to be able to feed my family and to keep everything going, they are on my side no doubt about it. Needless to say this didn’t go unnoticed to my family. Visiting the office was always a positive experience both welcoming and professional. I would recommend this firm to anyone in need of caring compassionate legal representation.

- Michael Brunner

Winkler Kurtz LLP is an amazingly knowledgeable and professional law firm. The staff is extremely intelligent and personable. With great guidance will support you through each step of your case and treat you with personal attention. Highly recommend this law firm – they go out of their way to make you a winner!

- Elissa Rand

The experience that I got from Richard Winkler was absolutely the best, In the beginning I was hesitant because you hear of bad stories about attorneys, but the turning point for me was when the most amazing, caring, person sat down and explained everything to me Mr. Winkler’s paralegal Dana Randazzo. This team answered all my phone calls handled all my paperwork in a quick manner there were never any surprises and they were on top of everything with the insurance companies and anything else associated to my case I highly recommend this law firm to anyone you will not be disappointed and I just wanted to say thank you for all that you have done for me Mr Winkler!

- Anthony Detorre

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Port Jefferson Station, NY
11776

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