The Social Security Administration runs the Supplemental Security Income (SSI) program for workers who don't qualify for regular Social Security disability. The program pays a flat monthly benefit that is adjusted for any wage or non-wage income you earn at the same time. In order to qualify, the SSI rules strictly limit your income as well as your resources, including any money you may be drawing from an annuity contract.
Social Security allows workers who don't have sufficient "work credits" to obtain disability to apply for SSI. You earn a work credit by earning a specified amount of money and paying Social Security taxes on that income. In 2013, the Social Security law set $1,160 as the amount needed for a single work credit. You can earn a maximum of four credits a year. The minimum number of credits needed for disability varies with your age; the older you are, the more credits you need. In addition, Social Security sets a minimum number of recent work credits (those you've earned in the last 10 years).
Income and Resource Limits
SSI is a means-tested program. The rules limit your income and resources, and if you exceed these limits you won't qualify for the program. The rule limits individuals to $2,000 in countable resources, and couples to $3,000. Annuity payments are considered unearned income and are counted towards the income limit. (Social Security also disregards the first $20 of income and counts only half of any earned income over $65 a month.) If your total income — earned and unearned — exceeds the monthly SSI benefit of $710, then Social Security will deny eligibility.
Adjustments to Benefits
You must qualify for SSI by proving that you have a disabling condition that prevents you from working and supporting yourself. If you are approved, Social Security will adjust your SSI benefits by any annuity payments you are receiving. As unearned income, the payments are offset dollar-for-dollar. As the monthly benefit in 2013 was only $710, this limits the amount of income you can receive from an annuity and still qualify for SSI.
Reporting & Recovery
If you begin receiving annuity payments, or income from any source, you must report the income to Social Security. If you neglect this reporting, Social Security reserves the right to claim an overpayment and put a stop to your benefits. You may appeal the overpayment on various grounds: Social Security may have made an error, for example, or you may not be the legal recipient of the annuity payment, or repaying the agency would cause an undue financial hardship. If Social Security denies this appeal, however, the agency also has the authority to levy your wages and bank accounts, or bring the case to federal court.
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