What is the “earned income exclusion?”


The earned income exclusion is used in calculating your countable income to see if you meet the earnings eligibility limits to receive SSI benefits. The exclusion is designed to help offset expenses incurred while working. If a claimant earns income, they are allowed to deduct a certain amount of that income in order to calculate their “countable income.” One can subtract $65 of earned income, and then subtract half of the remaining balance. You can deduct this amount from your income. The remainder of your income will be subtracted from your SSI payment. In practice this means that a claimant can make well over the $733 per-month-threshold in earned income – they can actually make up to $1,530 per month and still be eligible for SSI benefits. After subtracting $65, and then dividing that number in half, you would end up (just barely) under the $733 eligible limit.