The Social Security Administration (SSA) offers disability benefits for people who cannot work due to a medical condition. Several programs are available. Which program is best for you depends on your circumstances; in particular, your income and work history. To qualify for disability, you have to prove to the SSA that your condition meets their criteria and you also must meet certain financial requirements.

Depending on the disability program for which you are applying, accepting financial assistance from friends or family may affect your eligibility for Social Security Disability (SSD).

For more information about how financial gifts may impact your benefits, contact the Disability Advantage Group, today at 865-566-0800. We offer free case evaluations with our disability attorneys.

What Are the Different Disability Programs?

The program you are applying for will determine whether or not a financial gift will jeopardize your benefits. The SSA has two options for people seeking disability: Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI). SSDI is an insurance program that draws its funding from workers’ payroll taxes. SSI, in contrast, is a welfare program for the needy.

Qualifying for SSDI requires that you have a sufficient work history and that you have paid sufficient Social Security taxes. The qualification specifics depend on several factors, such as your age at the time of disability. Our attorneys can review your work history and determine if you are a good candidate for SSDI.

Because it is a benefit program for the needy, SSI requires applicants to remain below a certain level of income and assets. If you make too much money or your net worth is too high, the SSA can deny you SSI benefits on these grounds. Again, our attorneys can look at your financial records and let you know if SSI is a legitimate possibility.

What Are the Rules Regarding Financial Gifts and SSDI Eligibility?

As it is not a need-based program, SSDI does not have income limitations. The only thing it stipulates is that if you are capable of earning a substantial wage though work, you cannot receive benefits. However, a financial gift is not income from work and the SSA does not prohibit it for SSDI recipients. You can accept a financial gift from a friend or family member and not worry about losing your SSDI benefits.

What Are the Rules Regarding Financial Gifts and SSI Eligibility?

The rules for SSI recipients accepting financial gifts are much more complex. As it is need-based, the program has strict income requirements. These govern all forms of income, including gifts and charity. Our attorneys can help you understand what the SSA considers income for SSI purposes.  

If someone gives you a financial gift to help with your expenses, the SSA considers this unearned income and requires you to count it as such. The SSA considers a gift anything of value you receive without any expectation of repayment on the giver’s part.

However, if someone loans you money, the SSA allows you to exclude it, but only if the terms of the loan meet certain requirements.

What Are Loan Rules in the SSI Program?

As an SSI recipient, you may borrow money from just about anyone, including those in and out of your household. What the SSA seeks to determine is whether the agreement meets its definition of a bona fide loan. To do so, it must meet all five of the following conditions.

The Loan Is Enforceable Under State Law

In other words, the party who loaned you the money can force you to pay it back under the law. This means you and the lender must have a valid contract, whether written or verbal.

The Contract Was in Effect When You Received the Money

This means you cannot receive money as a gift and then draw up a loan contract at a later date to avoid reporting the money to the SSA as income.

There Is an Unconditional Repayment Agreement

Both you and the lender have to acknowledge your responsibility to pay the loan back. The repayment agreement may not contain any caveats or conditions, such as absolving you of your responsibility to pay the loan back if you do not qualify for SSI benefits.

You Have a Structured Repayment Plan

You have to present the SSA with a specific schedule of how you will pay the loan back. The more detailed your repayment plan, the better chance the SSA views it as legitimate.

The Repayment Plan Is Feasible

The repayment plan must present you with a feasible way to actually pay the loan back based on your total income—including SSI benefits—and other expenses.

What Are Some Examples of Loans?

Here are two examples of loans, one that the SSA would consider bona fide, and the other that the SSA would not consider bona fide.

Bona Fide Loan

After you encounter some unexpected expenses, your brother lends you $1,500 to help you pay them. At the time of the loan, you and your brother both sign a detailed repayment agreement that stipulates you must pay the money back, regardless of what happens with your SSI application. Even with your limited income, the repayment plan is feasible.

Not a Bona Fide Loan

Your car breaks down, you cannot afford the repair bill, and you turn to your father for help. He knows you are applying for SSI benefits and does not want his financial gift to interfere with your application. So, he draws up a repayment agreement that only takes effect if the SSA approves your disability application. If you receive a denial for benefits, the money remains a gift and you do not have to pay it back. Because the repayment plan features a condition that you do not have to repay the loan unless you receive SSI benefits, the SSA would not consider this a bona fide loan.

Call 865-566-0800 for Additional Help With Social Security Disability Approval.

The SSA’s rules for gifts and loans are vast in number and complex in nature. If you still have questions, you are not alone. A disability attorney at the Disability Advantage Group, can help you maximize your chances of getting benefits. Call 865-566-0800 today for a free consultation.