This blog is the first in a series of three blogs that explains the impact oil and gas payments may have on social security benefits. Episode 2 will post October 21. The final blog, Episode 3, will post on November 4. Make sure you “like” our Facebook page to keep posted on the blogs. If you have any questions, do not hesitate to contact our office at (304) 845-9750.
“Oil that is, black gold.”
Oil and gas leases and royalties can be a wonderful, surprising economic boost to those who receive them. Much like Jed Clampett and Grandma jumping for joy when they saw oil spurting from the earth, Ohio Valley residents are often overjoyed to find they still possess their mineral rights.
Land and mineral owners, like the Clampett family, see it as a way to improve their life. It’s an unexpected fortune at their disposal. However, as we experienced through nine seasons of the Beverly Hillbillies, and one 1993 movie, it is not always strawberries and champagne. With this unexpected wealth comes unexpected, and sometimes unpleasant challenges. This isn’t just true for the Clampetts, the same can be true of modern oil and gas lease and royalty payments.
Oil and Gas Agreements and your Social Security Benefits
There are many considerations to make when determining if and under what terms to enter into oil and gas agreements, all of which the oil and gas attorneys at Gold, Khourey & Turak have the expertise to assist you with, but what comes after the agreement is done? One of the most common issues that arise is the unexpected impact oil and gas income can have on social security benefits.
What can you expect?
Well, I give you a classic legal answer, “it depends.” In order to determine the effect this income has on social security benefits, you must first understand what type of social security benefits you receive. Don’t worry, I’m not going to ask you to watch re-runs of the 274 Beverly Hillbillies episodes. However, over the course of several blogs, you should have a better understanding of the potential impact of oil and gas payments on social security benefits. If you still have questions, do not hesitate to contact me at (304) 845-9750.
“Well the first thing you (should) know”
There are numerous types of social security benefits, each of which has its own rules regarding qualification and the effects outside income has on qualification and payment. However, the three most common are:
- Social Security Disability Insurance (SSDI) Benefits
- Supplemental Security Income (SSI)
- Social Security Retirement Benefits
Social Security Disability Insurance Benefits (SSDI) are monthly payments you are entitled to receive if you have the proper number of work credits and become disabled. Social Security taxes have been taken out of your paychecks and paid into this benefit, just like insurance premiums, so you are covered if you become unable to work. This is in contrast to Supplemental Security Income (SSI).
Supplemental Security Income (SSI) has nothing to do with work credits or payments into the system. The consideration for SSI is one of financial need. Social Security looks to any income or assets you or your spouse possess to determine if you meet their financial guidelines. If you meet these financial guidelines and are disabled, you qualify for monthly SSI payments.
Social Security Retirement Benefits are benefits you are entitled to once you reach retirement age. Retirement age is currently between the ages of 62 and 67. Like SSDI benefits, your retirement benefits are based on work credits and what you paid into the system.
All of these social security benefits can be affected by other income you receive, and, in certain situations, be reduced by that income. This includes income generated from oil and gas leases and royalties.
When applying for Social Security disability or other social security benefits, it is important to know which type to apply for so you can maximize your chances of a successful claim. Choosing the right benefit type may even help you avoid future problems with additional income. If you are thinking about applying for SSDI/SSI or have been denied social security benefits, contact GKT at (304) 845-9750 for a free consultation.
Just like not all of the Clampett’s problems were solved in one episode, there are still issues to discuss with how your benefits interact with oil and gas payments. However, to see how you get out of that particular pot of hot water you’ll have to tune in for the next episode, Modern Day Beverly Hillbillies Episode 2: Restrictions Tougher than Boxing Max Baer.