If you receive Supplemental Security Income, understanding how Social Security counts your income is essential to keeping your benefits. SSI uses a specific formula to determine your "countable income," and it's not always as straightforward as looking at your paycheck or bank deposits. Some income counts, some doesn't, and the way it's categorized can make a big difference in your monthly payment.
In this article, we'll cover:
- What countable income means for SSI purposes
- The four types of income Social Security considers
- Key income exclusions that can protect your SSI payment
- How earned income is treated differently from unearned income
- Common income situations that confuse SSI recipients
- How to calculate your estimated SSI payment based on your income
What Is Countable Income?
Countable income is the amount of income Social Security uses to calculate your SSI payment after applying all applicable exclusions and deductions. It's not the same as your total income—Social Security excludes certain types and amounts of income before determining how much to reduce your SSI.
Your SSI payment is calculated by starting with the maximum federal benefit—$994 per month for individuals and $1,491 for couples in 2026—and subtracting your countable income. The lower your countable income, the higher your SSI payment. If your countable income equals or exceeds the maximum benefit amount, your SSI payment drops to zero.
Understanding what counts and what doesn't is the key to managing your benefits effectively and avoiding surprises when your payment changes.
The Four Types of Income
Social Security categorizes income into four types for SSI purposes, and each type has different rules.
Earned income is money you receive from working—wages, salaries, tips, self-employment income, and similar compensation. Earned income gets the most favorable treatment under SSI's rules, with larger exclusions that allow you to keep more of your benefits while working.
Unearned income includes everything you receive that isn't from working. This covers Social Security benefits (like SSDI or retirement), pensions, unemployment compensation, interest, dividends, cash gifts, alimony, and most other regular payments. Unearned income has smaller exclusions than earned income, so it reduces your SSI more dollar for dollar.
In-kind income is support you receive in a form other than cash—most commonly food and shelter. If someone else pays your rent, mortgage, or utility bills, or if you live in someone else's household rent-free, Social Security may count a portion of that as income through the in-kind support and maintenance (ISM) rules. The maximum ISM charge is one-third of the federal benefit rate plus $20 (called the Presumed Maximum Value, or PMV).
Deemed income is income that belongs to someone else but is considered available to you. This applies when you live with a spouse who has income, or when you're a child living with parents who have income. Social Security "deems" a portion of the other person's income to you and counts it when calculating your SSI.
Key Income Exclusions
Not all income reduces your SSI, thanks to several important exclusions. The $20 general income exclusion is applied first, reducing any type of income by $20 per month. If you don't have unearned income, this exclusion applies to your earned income instead.
For earned income, Social Security also excludes the first $65 of earnings per month, then disregards half of your remaining earnings. This means the earned income formula works like this: subtract $20 (if not already applied to unearned income), subtract $65, then divide by 2. The result is your countable earned income. This is why working is almost always financially advantageous for SSI recipients—you keep significantly more than you lose.
The Student Earned Income Exclusion (SEIE) allows SSI recipients under age 22 who regularly attend school to exclude up to $2,450 per month ($9,840 per year) in earned income in 2026. This is applied before the $65 and one-half exclusions, so it can protect a substantial amount of student earnings from reducing SSI.
Impairment-Related Work Expenses (IRWE) are costs directly related to your disability that you need in order to work. Things like medication, medical devices, transportation to treatment, and attendant care can be deducted from your earnings before SSI counts them.
Other notable exclusions include income set aside under an approved Plan to Achieve Self-Support (PASS), certain educational scholarships and grants, disaster relief payments, and the first $30 of infrequent or irregular income received in a quarter.
How the SSI Income Calculation Works in Practice
Let's walk through a practical example. Say you receive $300 per month in SSDI and earn $600 per month from a part-time job.
For your unearned income (SSDI), Social Security applies the $20 general exclusion: $300 minus $20 equals $280 in countable unearned income.
For your earned income, Social Security subtracts $65: $600 minus $65 equals $535. Then they divide by 2: $535 divided by 2 equals $267.50 in countable earned income.
Your total countable income is $280 plus $267.50, which equals $547.50. Your SSI payment would be approximately $994 minus $547.50, or $446.50 per month. Combined with your $300 SSDI and $600 in earnings, your total monthly income would be about $1,346.50—significantly more than the $994 you'd receive from SSI alone.
Common Income Situations That Cause Confusion
Gifts and one-time payments often trip people up. Cash gifts count as unearned income in the month received. If a family member gives you $200 for your birthday, that $200 is counted as income that month and will reduce your SSI. If you don't spend the gift by the end of the following month, it becomes a resource that counts toward the $2,000 limit.
Tax refunds and stimulus payments are generally excluded from income and resources for 12 months after you receive them. However, if you haven't spent the money after 12 months, it becomes a countable resource.
In-kind support is another common source of confusion. If your parent pays your phone bill, that generally doesn't count as income because it's not food or shelter. But if your parent pays your rent, it does count as in-kind support and reduces your SSI, up to the Presumed Maximum Value.
Food from SNAP is not counted as income for SSI purposes—this is a specific exclusion written into the law. Similarly, most state and local assistance programs based on need are excluded.
Keeping Track of Your Income
The complexity of SSI's income rules makes it essential to track your income carefully and report changes promptly. Any change in income—whether you start a new job, receive a gift, or have a change in your living situation—needs to be reported to Social Security within 10 days after the end of the month in which the change occurred.
Keeping organized records helps you understand your own SSI calculation, catch errors on Social Security's end, and protect yourself from overpayments. A dedicated bank account for your SSI and related funds makes tracking much simpler.
Understanding your countable income is the first step to managing your SSI effectively. Purple's checking account is built for SSI recipients, with tools that help you track your resources and income so you can stay compliant and keep your benefits.