Food Stamps, officially known as the Supplemental Nutrition Assistance Program (SNAP), helps people with low incomes buy food. To get Food Stamps, the government looks at how much money you have coming in. This money is called “income.” There are two main kinds of income: earned and unearned. Earned income is money you get from working, like a job. Unearned income is money you get that isn’t from a job. This essay will explain what types of unearned income count when figuring out if you qualify for Food Stamps.
What is Unearned Income?
Unearned income is any money you receive that you didn’t work for directly. This can include money from a variety of sources. It’s important for Food Stamp eligibility because it is one of the factors used to determine how much assistance a person or family will receive. The amount of unearned income a household has will impact their SNAP benefit. The rules for what counts as unearned income can be a little confusing, so let’s break it down.
Social Security and Retirement Benefits
Social Security benefits, including retirement, survivor’s, and disability benefits, are generally considered unearned income by SNAP. This means the money someone receives from Social Security is included when calculating their eligibility for Food Stamps. The SNAP program looks at the total amount of Social Security benefits received each month. This helps determine the household’s income and how much they can get in food assistance. If you or a family member receives Social Security, the amount they get affects your SNAP eligibility.
Here’s a quick example of how Social Security affects eligibility:
- Sarah receives $1,000 a month in Social Security retirement benefits.
- This $1,000 is considered unearned income by SNAP.
- The SNAP program uses this income to figure out if Sarah is eligible for Food Stamps and how much food assistance she will receive.
- The exact amount Sarah will receive is also based on her other income and how many people are in her household.
Furthermore, retirement income, like money from a pension plan, is also typically considered unearned income. If someone is receiving payments from a pension, this money is also included when deciding if they are eligible for SNAP. These pension payments are added to the total income. That total income is then compared to income limits for SNAP eligibility.
The following list summarizes various types of Social Security that are considered unearned income for SNAP:
- Social Security Retirement Benefits
- Social Security Disability Insurance (SSDI)
- Supplemental Security Income (SSI) – Though SSI is sometimes considered a separate category, it’s often included as unearned income in the SNAP calculation.
- Survivor’s Benefits (for those who have lost a loved one)
Disability Payments and Other Assistance Programs
Disability payments, such as those from the Veterans Affairs (VA), or private disability insurance, are often considered unearned income. These payments are designed to help individuals who can’t work due to a disability. When a person applies for SNAP, these disability payments are usually factored into the total household income. This affects whether or not they qualify for food assistance. The amount of disability payments directly impacts the amount of SNAP benefits they may receive.
Besides disability, payments from other assistance programs are also frequently classified as unearned income. These can include, for instance, unemployment benefits. If someone is receiving unemployment insurance, the money they get from the government to replace their lost wages is seen as income. This unemployment compensation is added to the household’s income to determine eligibility for SNAP. The same applies to other types of government aid, although rules can vary by state.
Here is an example of how to handle these programs:
- David is receiving $800 a month in unemployment benefits.
- That $800 is counted as unearned income when he applies for Food Stamps.
- SNAP calculates his eligibility and benefits using that $800, along with other income sources.
- The total income, combined with other factors (like household size), decides if David gets Food Stamps and how much.
Generally, any monetary support someone receives that isn’t earned from employment is checked to see if it qualifies as unearned income. It is essential to be accurate and comprehensive when reporting all unearned income, so SNAP can properly decide on eligibility and benefit amounts.
Investments, Interest, and Royalties
Money earned from investments, like stocks, bonds, or mutual funds, also usually falls under the category of unearned income. If a person receives dividends, interest, or capital gains from these investments, that money is counted towards their income when applying for Food Stamps. The income generated by these investments is added to the total income, which influences their eligibility for SNAP benefits and the amount of food assistance they might receive. The amount of investment income will affect SNAP benefits.
Interest income from savings accounts or certificates of deposit is also included. The interest earned on the money in these accounts is considered unearned income. This means any interest earned each month must be reported to SNAP. The amount of interest can influence the amount of SNAP benefits someone is eligible to receive. This is because the government uses the interest amount to determine the total income to ensure fairness in the program.
Royalties, such as those received from books, music, or other creative works, also usually fall under unearned income. If someone earns royalties for their creative work, these are considered unearned income. This income is then reported to SNAP during the application process. The amount received from royalties impacts eligibility and benefit levels.
Here’s a quick table to summarize what investments typically qualify:
| Type of Income | Impact on SNAP |
|---|---|
| Dividends from stocks | Counted as unearned income |
| Interest from savings accounts | Counted as unearned income |
| Royalties | Counted as unearned income |
| Capital Gains | Counted as unearned income |
Child Support, Alimony, and Gifts
Child support payments are usually considered unearned income. If a parent is receiving child support for their child, those payments are included when calculating their household income for SNAP purposes. This means that child support payments are added to the total income. This is considered when deciding if someone qualifies for SNAP, and also the amount of SNAP benefits.
Alimony, also known as spousal support, is also usually classified as unearned income. If someone receives alimony from a former spouse, this is considered income. This means the amount they receive monthly is added to their total income. The amount of alimony will be used to determine if they are eligible for Food Stamps. The amount of alimony also impacts the amount of Food Stamp benefits they may receive.
Gifts of cash, in some cases, can be counted as unearned income. Large, regular cash gifts may be considered income. The rules about gifts can be different from state to state. If gifts are used to provide for basic needs, they may be considered in the income calculation.
Here’s what a person should do if they are getting child support, alimony, or receiving a gift:
- Child Support: Report the amount received monthly.
- Alimony: Report the amount received monthly.
- Gifts: Check with the local SNAP office. They can inform about whether the gifts will be classified as income and how to report them.
It’s vital that all sources of income are correctly reported. The idea is that the SNAP program correctly determines eligibility and benefit amounts.
Conclusion
In conclusion, unearned income covers many different money sources, from Social Security and retirement benefits to investments, support payments, and gifts. Understanding what counts as unearned income is important when applying for Food Stamps to ensure accurate reporting. Knowing what type of income to declare, and what is not, ensures the process is clear and fair. It is essential to be completely transparent when applying for SNAP benefits.