One thing many people who apply for or are receiving Social Security disability (SSDI) benefits struggle with is earning income without affecting their eligibility for SSDI. If you earn over $1,130 for disabled people and $1,820 for blind recipients per month, your application may be denied if you applied for benefits, and the amount you receive may be reduced if you already receive payments from the agency. However, you still have to pay for living expenses while you are waiting to be approved and/or the amount you receive may not be enough to sustain you. Here are a couple of options for generating income that won't interfere with your SSDI benefits.
Generate Rental Income
When considering whether income should be counted towards the earnings limit or not, the Social Security Administration (SSA) looks at the source of the money. Only actively earned income such as from a job or business is included. Passively earned income, on the other hand, is not. This means you can earn as much money as you need to survive as long as you are not doing anything to generate that cash.
One option is to rent out property that you own. For instance, if you have a spare bedroom in your home, you could rent it out to a college student for a couple hundred dollars per month and that income wouldn't have any impact on your eligibility for benefits or reduce the amount of money you get from the SSA. This is because rental income is typically reported as investment income on state and federal tax forms rather than regular income.
Be aware, though, that you cannot actively do work on or for your rental property. Any activity you do in connection with an income source may be considered work in the eyes of the SSA. Therefore, it's best to have a third-party handle the day-to-day tasks associated with managing a rental unit. For instance, you can have an adult child collect rent and deal with calling professionals for repairs or hire a property manager if you have several units to rent.
It's also essential that you contact an attorney about the best way to set up a rental property business, because SSA may count the money you receive as income depending on how it flows through the company to you. For instance, you would need to set up an LLC (limited liability corporation) so that payments flow to members as dividends rather than profits to avoid having the money count as regular income.
Another option for generating passive, exempt income is to develop an investment portfolio. This is a good long-term strategy for ensuring you have enough money to meet your needs throughout your lifetime. As with rental income, money obtained from investments isn't counted as earnings as long as it is earned passively. For example, monthly disbursements from a stock portfolio would count as passive income.
Like with rental income, you cannot do anything to actively generate the money. For instance, actively trading stock online through the many Internet brokerage sites would likely be seen as substantial gainful activity, and the SSA could count the cash earned as non-exempt income, especially if you were in an investment-type profession/industry prior to being disabled. It's best to turn the management of your accounts over to an investment professional that can take care of the day-to-day transactions required to generate the cash.
There are other things you can do to earn income without it affecting your eligibility for disability benefits or reducing the amount of benefits you already receive. Contact a Social Security disability lawyer or check out the sites of local firms for more information about this issue and assistance with choosing the right legal options for you.
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