It's Cool to Be in School!

No matter where you look these days, the signs are everywhere that the carefree days of summer are dwindling. From department stores to your local grocery store, the seemingly endless back-to-school sales are a constant reminder that a new school year is upon us. As this fact sinks in, students, parents and teachers are scrambling to get ready. Beyond the usual back-to-school routine, one more item should be added to the to-do list. Remind families and students you’re working with to contact their local Social Security office to discuss the Student Earned Income Exclusion.

Unlike sales that promise to put money back into your pocket, this Social Security work incentive can actually do just that! This almost-too-good-to-be-true work incentive allows some students receiving SSI who are under age 22 and regularly attending school to have income excluded when Social Security adjusts their SSI check monthly.

Essentially, the Student Earned Income Exclusion decreases the amount of countable earned income so the student can keep more of their SSI check and also have their earnings from work. 

Oftentimes, this allows students to test their ability to work and keep their whole SSI check. For example, Trevor worked full-time over the summer at his local community pool and earned $1,376 per month and was also able to keep his full SSI check!

Almost Too Good to Be True

If an SSI recipient under 22 is working while pursuing education, the Student Earned Income Exclusion could be an option. The exclusion is applicable to students: 

• in grades 7-12 attending school at least 12 hours a week (this includes those who are being homeschooled, getting homebound instruction, or attending an online school)
• in a college or university for at least eight hours per week
• in training to prepare for a paying job for at least 15 hours per week if the course involves shop practice or hands-on activities, or
• in training to prepare for a paying job for at least 12 hours per week if it does not involve shop practice

Allowances may be made for fewer hours of instruction than indicated above for reasons beyond the student's control, such as attendance, illness, or any circumstances that justify the reduced credit load.

The amount of income a student can exclude monthly and annually is adjusted every year, but these amounts are shockingly high. In 2019, the monthly gross earned income a student can exclude is $1,870 and up to a maximum annual exclusion of $7,550! With limits this high, it’s not surprising that the majority of students who are working are under this monthly limit and able to keep their entire SSI check!

Maintaining Benefits While Learning and Earning

For example, a student working 10 hours a week after school and earning $8.50 per hour would have about $340 in gross income from work. By using the Student Earned Income Exclusion, they could keep their entire SSI check of $771 (if receiving the Full Benefit Rate) + $340 from work = $1,111. Total!! Now that really is an incentive to work! Students often have no problem spending this extra money but saving in an ABLE account, Trust, or Plan for Achieving Self-Support are great options to save without jeopardizing their eligibility for Medicaid. 

As you can see in the example below, a working student receiving the Full Benefit Rate of $771 and earning $340 in one month could keep both the SSI and the paycheck. Every working student should explore this incentive.

Connecting Work to a Better Life

When students are first starting out in the workforce, it’s important for them to make the critical connection between how working and earnings can equate to a better quality of life. This incredible work incentive is a great way for them to have the opportunity to feel the benefits of working and having more money to spend! By allowing transition-age youth to work while keeping more of their benefit, they can experience life above the base SSI rate. Once a student experiences how having more money enriches their lives, they begin to develop a work habit rather than a dependence on benefits. This can have a powerful impact at a critical juncture for these students. For students who work a part-time job during the school year or just over the summer, simply telling Social Security that they are a student can equate to MORE money! Being in school really is cool.

Resources for the Student Earned Income Exclusion

2019 Work Incentive Fact Sheet Student Earned Income Exclusion

Spotlight on Student Earned Income Exclusion -- 2019 Edition

Program Operations Manual System (POMS)

Student Earned Income Exclusion for SSI