The Student Earned Income Exclusion (SEIE): How You Can Be a Student, Get a Job, and Keep Your Benefits

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If you get Supplemental Security Income (SSI), you know that it has strict limits on how much money you can earn and how much you can save. In 2010, you won’t qualify for SSI if you make more than $1000 per month ($1640 if you’re blind) or save more than $2000 in total assets, including bank accounts, stocks, bonds, retirement, or other types of possessions. The problem is that these rules end up preventing people from working and saving.

However, there are some programs that can help you avoid these limits and make and save money without losing your benefits. Proyecto Visión’s Spring 2010 Newsletter included an article that discussed two options that let you save more than the assets limit, Plans to Achieve Self-Support (PASS) and Individual Development Accounts (IDAs). But you can only save money if you make money! That’s why this article talks about one way students can make way more than $1000 each month and continue to get SSI without their benefits being reduced. The key requirement is that you must be a student under the age of 22.

The rule that allows you to make more money is the Student Earned Income Exclusion (SEIE). In order for your income not to count against your benefits while you are a student, you have to be under 22 and “regularly attending school.” That means you have to go to school more than:

8 hours a week for college students,
12 hours a week for grades 7-12, or
12-15 hours a week for employment training.

In 2010, the SEIE lets you make up to $1640 in one month, with a total limit of $6600 in an entire year. That means that you can make up to $6600 without your benefits being reduced at all!

Here’s an example of how this could work:

Before getting a job you are receiving $674 each month in SSI benefits.
You get a summer job and make $1100 per month. You work 3 months at your summer job, so the total amount of money you make during the summer is $3300.
During the school year, you have a part-time job and make $400 each month. You work 8 months during the school year and make a total of $3200.
Combined, you make $6500 over the course of the year.
Since the money you make doesn’t exceed the monthly ($1640) and yearly ($6600) limits for the SEIE, your SSI benefit won’t decrease at all and you will keep getting $674 each month in SSI benefits even after you get your job!

Now imagine what happens if you drop out of school after getting a job:

Before getting a job you are receiving $674 each month in SSI benefits.
You get a job, but since you dropped out of school, you no longer qualify for the Student Earned Income Exclusion (SEIE).
During the summer months when you earn $1100, you will no longer qualify for benefits, and so would lose out on $674 each month.
The rest of the year, when you earn $400, SSI will ignore $20 for the general income exclusion and $65 for the earned income exclusion. That leaves $315 that SSI will count. SSI will reduce your benefit by half of that amount ($157.50), meaning that you’ll only get an SSI check for $516.50.
In both cases, whether you are working full-time in the summer or part-time the rest of the year, if you were still a student, you would have a higher combined income, thanks to the SEIE.

So, you can see that if you are a student, it really pays to stay in school! Not only will you be able to earn more money at your job, you’ll also get bigger SSI checks. With the SEIE, you’ll make more now, and when you graduate you’ll get a higher paying job thanks to your degree!

Of course, if you are not a student and your goal is to get a full-time job year-round, that’s a great option that will also benefit you in the long run. However, this example was provided to make sure that you know that you don’t have to choose between work and school: the SEIE means you can do both!

The Assets Limit

There’s still a big problem here: to continue receiving SSI, you have to remain below the assets limit. If you are making this much money, you probably want to save some of it, perhaps to pay for your college tuition, for books, or for something else. So you will have to figure out a way that you can save some of this money that you are making at your job.

This issue brings us back to the article in the Spring Newsletter. It told about how Plans to Achieve Self-Support and Individual Development Accounts are two of the best ways for you to save money if you are getting benefits. They let people getting SSI save money without having it count against their benefits eligibility.

To do a PASS, you have to be eligible for SSI and have to be able to show that you have enough income to be able to save some money while still paying for your basic living expenses. The money that you put in a PASS has to be used for an employment-related expense, which could include money for school, transportation, books, services, etc.

Here’s an example of how a PASS could help you:

You get $674 each month in SSI benefits.
You are a student and make $1100 per month at a summer job. Thanks to the SEIE, you continue to get SSI benefits.
Before your job, you had $1500 in the bank. With your job, you are spending $400 each month and saving the other $700. You are about to go over the SSI assets limit and you will lose your SSI.
You open a PASS account and put $700 each month in it. By the end of the summer, you still have $1500 in the bank, but you also have $2100 in your PASS account. You have a total that is higher than the asset limit, but you won’t lose your SSI!
By combining the SEIE with a PASS, you have successfully earned and saved more money than the SSI income and assets limits usually allow.

Some, but not all, Individual Development Accounts are similar and let you go over the assets limit. If you choose to do an IDA, make sure to do one that will not impact your benefits. You can learn more about them in the Spring article or at the Corporation for Enterprise Development.

The SEIE is not the only thing that can help you go over the assets and income limits. However, if you’re a student and under 22, you need to make sure that you take advantage of it, because it, combined with a PASS or IDA, can give you a great head start on developing a career and starting to build assets.

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