Figuring the Budget: Student Earned Income Exclusion

What some people don’t realize is that working students often won’t lose any of their SSI cash benefit while in school or a training program. The Student Earned Income Exclusion means that students under age 22 can earn up to $1,985 per month (up to a total of $7670 annually) and still receive their full SSI cash benefit. If you have a student whose cash benefit was reduced because the Student Earned Income Exclusion wasn’t applied, you can also receive back payments.

We knew about the Student Earned Income Exclusion (SEIE) when our son applied for SSI, and we brought his school records with us to the initial meeting, but the Social Security Administration employee didn’t note in our file that he qualified for the SEIE.

When Andy turned 18, he was earning about $250 per month as a front desk clerk at a grocery store. In 2018, the SSI cash benefit amount was $750. Because Andy was earning about $250 per month, Social Security would usually reduce his benefit by half of whatever was left over after subtracting the general exclusion ($20) and the earned income exclusion ($65).

Math Summary

  • $250 (Andy’s income) $20 (general exclusion) $65 (Earned Income Exclusion) = $165.
  • $165 x 50% = $82.50 (Andy’s work income amount subtracted from the 2018 SSI cash benefit
  • $750 (2018 SSI cash benefit) – $82.50 (Andy’s subtracted work income amount) =$667.50 (Andy’s adjusted 2018 SSI cash benefit)
  • Now even if Andy weren’t a student, you can see that $667.50 (Andy’s adjusted SSI cash benefit) + $250 (Andy’s work income) = $917.50 is still higher than the normal $750 SSI cash benefit in 2018. So it was still better to work even if a percentage of the SSI cash benefit was taken out.
  • However, because he was a student and qualified for the Student Earned Income Exclusion, he should actually have been receiving $750 (the full 2018 SSI cash benefit) + $250 (Andy’s work income) =$1,000

When Andy first started receiving SSI, there were several kinks we needed to work out, but when we finally realized that he was not being given the Student Earned Income Exclusion, we took his transcripts to the Social Security office to show he was a student. Ultimately, they did award him back pay of about $500, so it’s important to make sure that the Social Security office knows if a person receiving SSI is a student or in a training program.

Tip: If you end up receiving back pay that could possibly put you over the $2,000 asset limit, that money can be put in an ABLE account to allow you to save the money without losing important benefits like Medicaid. Check out Kentucky STABLE to enroll!

Resources you can use:

KentuckyWorks Student Earned Income Exclusion Infographic: Really easy to understand explanation of the Student Earned Income Exclusion.

Student Earned Income Exclusion: SSA explanation of the Student Earned Income Exclusion.

Myths Busted: ABLE Accounts: Information about ABLE accounts in case you receive back pay … ABLE accounts are just really helpful for people with disabilities in general because you can save money without losing benefits.