If you’re receiving Social Security Disability benefits and own or are thinking of owning rental property, you’re likely wondering how this income could affect your benefits. It’s a reasonable concern—different types of disability benefits have different rules about income, and it’s important to know how rental income could impact what you receive.
To answer this question, we need to look at the two main types of Social Security Disability benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Each program has its own rules, and how rental income is treated under each program is quite different.
If you have questions about your specific situation, give us a call at Drew L. Johnson, P.C. Attorneys At Law in Eugene, Oregon today.
Understanding the Difference Between SSDI and SSI
First, let’s talk about what separates SSDI from SSI, because it plays a big role in how rental income is handled.
SSDI is a program for people who have worked and paid into Social Security through payroll taxes. In other words, it’s based on your work history. If you have enough work credits (which means you’ve paid into Social Security long enough and recently enough), you’re eligible for SSDI if you become disabled and can no longer work. Your SSDI payments are not affected by the amount of money you have or other sources of income, except under certain conditions.
SSI, on the other hand, is a need-based program designed for people with very limited income and resources. You don’t need a work history to qualify for SSI, but you do need to meet strict financial limits. This means that if you receive income from any source, including rental property, it can reduce the amount of SSI you get, or even disqualify you from receiving it entirely if the income is too high.
So, if you’re receiving SSDI, rental income usually won’t affect your benefits—unless you’re very hands-on with managing your property (more on that below). But if you’re on SSI, the situation is more complicated.
How Rental Income Affects SSDI Benefits
For SSDI recipients, the Social Security Administration (SSA) is mainly concerned with whether or not you’re able to work. SSDI is designed for people who are disabled and unable to engage in what’s called “substantial gainful activity” (SGA), which is a level of work that earns you more than $1,620 a month in 2025 (the limit is higher for blind individuals). If you can’t work above that level due to your disability, you’ll continue receiving SSDI benefits.
When it comes to rental income, SSDI generally treats it as “unearned income.” This means it’s money you’re getting from an investment (your property), rather than from working. Because it’s unearned, it doesn’t count against your SSDI benefits. However, the situation changes if you’re actively managing the property.
If you’re doing significant work to maintain the property—like making repairs, handling tenant issues, or even overseeing a large number of properties—the SSA might consider that you have earned income and engaging in SGA. This could potentially lead to a loss of your SSDI benefits. But if you’re only passively collecting rent without putting in a lot of time or effort, your SSDI benefits should remain unaffected.
In summary, for SSDI, as long as managing the property doesn’t take up too much of your time and energy, rental income shouldn’t be an issue. But if it starts to look like a job, it could affect your benefits.
How Rental Income Affects SSI Benefits
SSI is different. Because SSI is a need-based program, it has strict rules about how much income and resources you can have. Any extra income you receive—whether earned or unearned—can reduce your SSI benefits.
Rental income is considered unearned income by the SSA, but it still counts when calculating how much SSI you’re eligible to receive. SSI has a small income exclusion: the first $20 of unearned income each month is not counted, but anything above that will reduce your monthly SSI benefits dollar-for-dollar.
For example, if you receive $500 a month from rental income, the first $20 is ignored, but the remaining $480 would be subtracted from your SSI payment. Depending on how much rental income you have, it could significantly reduce your SSI benefits or eliminate them altogether. The asset limit for SSI is also very low ($2,000 for an individual or $3,000 for a couple), and if the value of your rental property, unless it is your home, exceeds this limit, it could make you ineligible for SSI.
Managing Your Rental Property to Protect Your Benefits
If you’re receiving SSDI, the key to protecting your benefits is making sure your rental property remains a passive investment. This means limiting how much time you spend managing the property so that it doesn’t become “work” in the eyes of the SSA. If you’re not actively involved in the day-to-day operations of the property, it’s likely to be considered unearned income and won’t affect your SSDI benefits.
One way to do this is to hire a property manager or management company to handle all the tasks related to the rental, such as collecting rent, dealing with tenant issues, and arranging for repairs. This can help ensure that you’re not putting in the kind of work that might be seen as substantial gainful activity. While this comes with a cost, it can protect your SSDI benefits and make managing the property less stressful.
For SSI recipients, managing rental income is a bit trickier. You’ll need to keep a close eye on how much rental income you’re receiving and how it affects your SSI payments. If your rental income is too high, you might want to consider other options, such as setting up a trust, though these options come with their own complications.
The Importance of Consulting an Attorney
For those living in Albany, OR, the law firm of Drew L. Johnson, P.C., based in nearby Eugene, is a great resource. We specialize in Social Security Disability cases and can help you navigate the complex rules around rental income and disability benefits. Whether you’re already receiving benefits or just starting the application process, we can provide expert guidance to ensure you make the best decisions for your financial future. Call us today at (541) 434-6466, and let us answer any questions you have.
