Unemployment benefits are not considered to be earned income. Would that affect the amount we currently receive from Social Security? And those with the highest past covered earnings have the most to gain from maximizing their Social Security. That means that you must be prepared to show that the income you receive is not the result of work activity. Whether or not you can own rental property and receive benefits depends in part on which program you qualify for and how much rental income you make. If You Get Workers Comp, Will You Get Disability From Social Security? I am an economist at Boston University, a Fellow of the American Academy, an NBER Research Associate, and President of Economic Security Planning, which markets maxifi.co. Learn how to find the perfect rental and negotiate a lease that meets your needs. But what counts as income? Copyright © 2020 Pasternack Tilker Ziegler Walsh Stanton & Romano LLP Attorneys At Law. In order to do so, you should thoroughly document who is performing activities on your behalf, what their compensation is, and where your income is coming from. Also, since income from the sale of a rental home is not subject to Social Security tax, it would not increase the amount of your Social Security check. If everything is properly documented, your passive income should not interfere with your receipt of Social Security disability benefits. If you’re under full retirement age and file for Social Security benefits there is a limit to the amount of income you can have before your benefit is reduced or shut off completely. You may opt-out by. However, investment income can indirectly affect retirement benefits by causing a portion to become subject to income taxes How much are you allowed to work and earn if you apply for or receive disability benefits? The most complicated situations arise when disabled individuals own their own businesses. My question is this: We have an opportunity to sell our rental home with a value of approximately $130,000. This "hands off" approach should also be applied to any investments you may have. By turning your investments over to a stockbroker or money manager, your income will be solely the result of any capital appreciation, not the mental work done by picking and choosing stocks and other investment options. This means that additional steps have to be taken to prove that any income realized from the business is truly passive. Your Social Security benefits are subject to federal income taxation. Your Social Security Disability amount is based on your work history and earnings, how Social Security Disability and SSI work. However, given the complex nature of these situations, you should consult with an attorney before making any decisions or taking any definitive actions. If this is not possible, it may be best to dissolve the business in order to avoid any issues with Social Security. Q. I am collecting Social Security benefits and I was working part-time until the coronavirus hit. Homeownership isn’t all it’s cracked up to be. However, passive income - that is, income that does not come from your work activity - does not count toward these limits. If you do not have a significant earnings history, can you be eligible for disability payments? Recent books: Get What's Yours – The Secrets to Maxing Out Your Social Security Benefits (a NY Times Best Seller with Phil Moeller and Paul Solman), The Economic Consequences of the Vickers Commission, The Clash of Generations (with Scott Burns), Jimmy Stewart Is Dead, and Spend 'Til the End. This approach means that any income you receive is the result of your ownership of the property, and not due to any work that you performed for the tenant. All Rights Reserved, This is a BETA experience. What Income Will Affect Your Disability Benefits? One of the benefits of getting older is Social Security and senior discounts. Investment earnings do not directly impact the size of your Social Security retirement benefits. The Social Security Administration offers two income programs for people with disabilities: Social Security Disability Insurance and Supplemental Security Income. Generally, these businesses tend to be small and closely held - sometimes solely within a family. Some people also receive income from a business that they previously owned. Of course, it doesn't offset the wrinkles and gray hair but it at least offsets a few of the negatives. When a person that has been receiving SSD monthly payments dies, how is the last payment made? The contract of sale should include specific details about how and when payments will be made to you from the business, and what those payments represent. Your All Rights Reserved. You should make sure that the business is sold to someone qualified to run it and be prepared to show that you are not still running the business. Does a Person's Retirement Income Affect Their Social Security Benefits?. If you are disabled and cannot work, contact the Law Offices of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP today by calling (800) 692-3717 or completing the online contact form. Long or short-term disability benefits, unemployment, workman’s compensation, rental income, or any other kind of income affects your eligibility for SSI benefits. Opinions expressed by Forbes Contributors are their own. The two most common forms of passive income our Social Security disability lawyers in New York see are ownership of a rental home and income from investments. Social Security may be your largest or one of your largest assets. The answer considers whether the sale could increase the benefit amounts and also whether it might affect the couple's taxes. The editors at Forbes asked me to post a Q&A each day from those columns. In 2018, Social Security benefits can be reduced if you make more than $17,040 and will reach full retirement age after 2018, at the rate of $1 for every $2 in excess income. If I get disability for a physical condition, can I receive more if I also have a mental condition? If a person who gets Social Security retirement benefits is younger than their full retirement age, there are limits to how much they can earn from work before it affects their benefits. Will Passive Income Affect My Social Security Disability Benefits? How do earnings limits affect benefits? How you manage it, by deciding which benefits to collect and when, can make an absolutely huge difference to your lifetime benefits. If you exceed these limits, Social Security may determine that you are not disabled or that your disability has ended due to your work activity. Follow me on twitter @kotlikoff, Circle me on Google , check out my website, kotlikoff.net, and ask me Social Security questions by clicking Ask Larry at the bottom of www.maximizemysocialsecurity.com. Social Security disability lawyers in New York, Pasternack, Tilker, Ziegler, Walsh, Stanton & Romano LLP. Unlike Social Security Disability, other types of income may potentially affect your eligibility for SSI disability benefits. However, passive income - that is, income that does not come from your work activity - does not count toward these limits. The two most common forms of passive income our Social Security disability lawyers in New York see are ownership of a rental home and income from investments. I am an economist at Boston University, a Fellow of the American Academy, an NBER Research Associate, and President of Economic Security Planning, which markets maxifi.com, maximizemysocialsecurity.com, and analyzemydivorccesettlement.com -- all financial planning tools. Your Social Security benefits are subject to federal income taxation. SSI disability when you share household expenses, Receiving SSDI payments and working below the Social Security SGA limit. income gained by an owner of a business who does not perform significant services in that business. Impact 50: Investors Seeking Profit — And Pushing For Change. Answer: Since you are above full retirement age, your Social Security benefits aren’t affected directly by any source of income, including labor income. To see all my columns, please go to my software company's site, www.maximizemysocialsecurity.com, and click More Press below the WSJ quote. But unless the $130,000 represents a taxable capital gain, it won’t affect your adjusted gross income on which Social Security benefit taxation is predicated. For those who own a rental property, it is important that you do not perform any physical work on the rental properties. We generally advise that you have an agent or manager for the property who will collect the rent and either perform or arrange for any repairs/maintenance work that is necessary. Today's question asks if selling a rental home will affect the Social Security benefits of a couple approaching 70 and already receiving benefits. Question: My husband and I are both going to be 70 in 2015 and are currently receiving Social Security. (Workers Compensation, Wages etc). The Social Security Administration won't reduce your benefit amount on account of investment profits. I've been answering questions and writing columns about Social Security each week for the past two years on PBS NEWSHOUR's website. In this article we'll discuss what income sources will and will not trigger the earnings limit. Having a stream of passive income should not affect your claim for, or receipt of, Social Security disability benefits, as long as the income is truly passive. When applying for Social Security disability benefits and after the Social Security Administration has determined that you are disabled and entitled to benefits, there are limits to how much you can earn. © 2020 Forbes Media LLC.