How Alimony Payments Effect SSD and SSI

By Maro Constantinou, Staff Attorney, MFY Legal Services

Question: Do I have to report an award of alimony to the Social Security Administration if I receive Social Security Disability (SSD) or Supplemental Security Income (SSI) benefits?

Answer: The reporting requirements are different for SSD and SSI benefits. If you only receive SSD benefits then there is no obligation to report to Social Security because SSD is not a needs-based program.

If you receive SSI, you must report the amount of alimony you are receiving to Social Security. Since SSI is a needs-based benefit, Social Security looks at all sources of income to determine eligibility for SSI benefits. Alimony is considered income and will impact a beneficiary’s SSI payment.

You can notify Social Security orally or in writing, but it is better to do so in writing. You should send a letter by certified mail, return receipt requested, to your local Social Security Office. Keep a record of your letter and save proof of mailing. Include your name, social security number, the amount you received and the date you received it. You must report the receipt of alimony within 10 days after the close of the month in which you receive the monies. For example, if you receive an alimony payment on July 3^rd, you must report it to the Social Security by August 10^th. Social Security can impose a penalty and deduct money from your benefits if you do not make a timely report.

Question: How will receipt of alimony affect my SSI benefits?

Answer: Social Security considers alimony to be unearned income and will reduce your SSI benefits. The amount of the reduction depends on the amount of alimony you receive. Generally the first $20 is disregarded and then Social Security will deduct the amount of alimony from your SSI benefit dollar for dollar. For example, if you receive $60 per month in alimony, the first $20 may be disregarded (if no other income is disregarded) and the remaining $40 in alimony will reduce your SSI total amount by $40. If the alimony amount is high enough, you may cease to be eligible for SSI benefits all together.