It can be difficult to navigate the complex procedures and confusing regulations that you must deal with when applying for Social Security disability benefits. Firstly, you should be aware that the Social Security Administration offers disability benefits through two different programs: Supplemental Security Income and Social Security Disability Insurance. Next, you have to determine if you qualify for each of them by researching the requirements.
It’s not easy to do. For instance, merely possessing a bank account could be a barrier to being eligible for Social Security disability benefits. The rules for each program are covered in this article, along with advice on how to handle asset restrictions that can make having money in the bank problematic.
Does having money in the bank affect your Social Security disability benefits?
The answer depends on which program you receive benefits from: Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI).
SSI:
- Yes, having money in the bank can affect your SSI benefits.
- You cannot have more than $2,000 in countable resources (including money in the bank) as an individual or $3,000 as a couple.
- Resources of your spouse or parent may also count towards your resource limit.
- There are some exceptions, such as the value of your home and certain types of retirement accounts.
SSDI:
- No, having money in the bank does not affect your SSDI benefits.
- There are no resource limits for SSDI.
- However, the source of the money could be an issue if it is earned through work and exceeds the substantial gainful activity (SGA) limit.
Here is a table summarizing the key differences between SSI and SSDI:
| Feature | SSI | SSDI |
|---|---|---|
| Resource limits | Yes | No |
| Money in the bank | Counts towards resource limit | Does not count towards resource limit |
| Work limits | Cannot work and earn more than the SGA limit | Can work and earn any amount of money |
Here are some additional things to keep in mind:
- If you are unsure whether your money in the bank will affect your benefits, it is best to contact the Social Security Administration (SSA) or an experienced disability attorney.
- There are ways to protect your assets and still qualify for SSI benefits. An attorney can help you explore these options.
- The SSA may review your bank statements during the application process or during a periodic continuing disability review.
- If you are receiving SSI benefits and you inherit money or receive a large gift, you must report it to the SSA within 10 days.
Here are some resources that you may find helpful:
- Social Security Administration (SSA): https://www.ssa.gov/
- National Organization of Social Security Claimants’ Representatives (NOSSCR): https://www.nosscr.org/
- Disability Rights Education & Defense Fund (DREDF): https://dredf.org/
Additional Information:
- The SSI program is a needs-based program for low-income individuals with disabilities.
- The SSDI program is an insurance program for people who have worked and paid Social Security taxes.
- The SGA limit for 2023 is $1,470 per month for non-blind individuals and $2,460 per month for individuals who are blind.
- If you are receiving SSI benefits and you work and earn more than the SGA limit, your benefits may be reduced or stopped.
- You can appeal a decision by the SSA if you disagree with it.
Social Security disability programs: Supplemental Security Income
The Supplemental Security Income program pays adults and children who are blind or disabled on a monthly basis in cash if they have limited resources. Additionally, non-disabled people 65 years of age and older who satisfy the program’s stringent financial requirements are compensated by the program.
You are not allowed to have more than $2,000 in available funds for an individual and $3,000 for a couple. Cash on hand and bank accounts are resources that are included in the financial constraints.
A child’s eligibility for disability benefits under the SSI program may be impacted by the parents’ bank accounts and other financial resources, or in some cases, the financial resources of a stepparent. Social Security considers parent or stepparent bank accounts as available for the support of a child through a procedure known as “deeming,” and a portion of their value is counted toward the $2,000 resource cap.
Social Security Disability Insurance
There are two main differences between SSI and the other disability program, Social Security Disability Insurance. In order to be eligible for insurance under the program, you must first work and pay for Social Security income that you receive from employment or self-employment. The second distinction is that there are no restrictions on the amount of money you can have on hand, including bank accounts.
You have to have worked long enough to accrue enough work credits in order to be eligible for SSD. Based on your annual wages or self-employment income, you accrue work credits. For 2021, you can earn up to four credits annually, or one credit for every $1,470 you make in wages or through self-employment.
Generally speaking, you need 40 credits to be eligible for SSD; 20 of those credits must be work credits that you have earned within the ten years prior to the start of your disability. When applying for benefits, there are differences in the total number of credits required to be eligible as well as the recentness of some of those credits. The amount of time you have to have worked depends on your age when you become disabled; younger workers need fewer credits than older workers.
The amount of Social Security Disability benefits you receive is determined by your lifetime earnings history. SSD is based on lifetime average earnings, so even though you worked long enough to be eligible for SSD, your monthly benefit would be impacted if you spent a lot of time at a low-paying job or made very little money from self-employment.
Does Money In The Bank Affect Social Security Retirement Benefits
FAQ
How much money can you have in the bank and still get Social Security?
Does Social Security look at your bank account?
Does my savings account affect my Social Security benefits?
What income does not count against Social Security?
Can bank accounts affect SSI benefits?
With SSI benefits, it is imperative that those applying for or receiving it know that it can be affected by bank accounts. If there is an issue with these benefits due to bank accounts or any confusion regarding this, it is wise to discuss the matter with a legal professional experienced in the rules for SSI.
Does working affect Social Security benefits?
If someone receiving Social Security benefits earns money by working, the Social Security Administration may reduce the amount of that person’s benefits. This only affects people who start taking benefits before reaching full retirement age. And only income earned from working has this effect.
Does earning money increase Social Security benefits?
Sometimes, earning money while receiving Social Security can also increase your benefit amount. This can happen if, during a year you receive Social Security benefits, you earn enough money to make the year one of your highest earning years. Social Security calculates benefits based on a worker’s highest earning years.
What happens if you take Social Security before retirement?
Your benefits are permanently reduced if you take Social Security before you reach your full retirement age. Your benefit amount drops if you decide to work during retirement. You may collect unemployment and Social Security benefits simultaneously but you can’t collect both Social Security and disability benefits.