The income test
SSI does not have a single income cutoff. Instead, SSA works out your countable income — the part of your income it actually counts — and subtracts it from the federal benefit rate. If the result is more than zero, that is your federal SSI payment. If your countable income is equal to or higher than the federal rate, you generally do not receive a federal payment for that month (a state supplement may still apply in some states).
- Unearned income: subtract the $20 general exclusion, then count the rest dollar for dollar.
- Earned income: subtract $65, then count only half of what remains.
- Some income never counts: SNAP, most home energy assistance, and tax refunds, among others.
What counts as income
SSA divides income into unearned income (Social Security benefits, pensions, unemployment, interest, gifts of cash) and earned income (wages, self-employment earnings). It also counts in-kind support — help with food or shelter, such as someone else paying your rent — under the living-arrangement rules in living arrangements.
Some things are not counted at all: SNAP benefits, most home energy assistance, income tax refunds, and grants or scholarships used for tuition and books, among others. If you are unsure whether something counts, the safe move is to report it and let SSA decide — unreported income is the most common cause of overpayments.
The formula, step by step
Unearned income: start with the amount, subtract the $20 general exclusion (the $20 applies once per month, to unearned income first; if you have no unearned income it can apply to earned income instead). What remains is countable unearned income.
Earned income: start with gross wages, subtract the $65 earned-income exclusion (plus any unused part of the $20), then divide what remains by two. That half is countable earned income.
Total countable income = countable unearned + countable earned. SSI payment = federal benefit rate − total countable income (plus any state supplement, minus any living-arrangement reduction).
Worked example 1: wages only
Maria earns $400 a month in wages and has no other income. Apply the $20 exclusion to her wages (no unearned income to use it on), then the $65 exclusion: $400 − $20 − $65 = $315. Half of $315 is $157.50 countable. Her federal SSI payment is $994 − $157.50 = $836.50.
Worked example 2: wages plus a pension
James receives a $300 monthly pension and earns $585 in wages. Unearned: $300 − $20 = $280 countable. Earned: $585 − $65 = $520, halved to $260 countable. Total countable income: $280 + $260 = $540. His federal SSI payment is $994 − $540 = $454. Notice how the $20 was used on the pension, not the wages — the order matters, and SSA applies it to unearned income first.
A useful rule of thumb from these examples: for every $2 you earn above the exclusions, your SSI payment falls by about $1. You are always better off working than not working, in cash terms — the payment shrinks by half your extra earnings, not by all of them.
Sources to check: SSA, Understanding Supplemental Security Income — income (ssa.gov/ssi/text-income-ussi.htm); SSA Red Book, income exclusions (ssa.gov/redbook/eng/).