This blog is the final blog in a series of three blogs that discusses the impact oil and gas payments may have on social security benefits. If you have any questions, do not hesitate to contact our office at (304) 845-9750.
In case you missed them, here are links to the two previous blogs:
In our last episode, we discussed the trouble-making Supplemental Security Income. If you are receiving SSI benefits please read, Modern Day Beverly Hillbillies Episode 2: Restrictions Tougher Than Boxing Max Baer for information about how oil and gas, or other types of payments, could affect your benefits.
All good things must come to an end. This is the final episode of the Modern Day Beverly Hillbillies. Hopefully, you will leave with more closure and information than the Clampett’s did in 1971 when the show was unexpectedly canceled.
Social Security Disability Insurance benefits (SSDI)
For our finale, we will look at Social Security Disability Insurance benefits (SSDI) and retirement benefits. While many rules regarding these two types of benefits are different, for the purposes of considering outside income we can handle them together. At this point it also becomes necessary to distinguish between two types of income: (1) earned income, and (2) unearned income.
- Earned income is income you obtain from substantially gainful activity, i.e. work/employment activities.
- Unearned income is other types of income that are generated through investment or happenstance and not based upon your labor.
Jed finding oil on his land and becoming rich is a perfect example of unearned income. Earned income, once it reaches certain levels, affects your SSDI and retirement benefits. For 2019, you cannot earn more than $1,180 per month in earned income and remain eligible for SSDI benefits. For retirement benefits, it depends on if you are full retirement age or taking early retirement. If you are taking early retirement then you will be deducted one dollar ($1) for every two dollars ($2) you earn over the $17,640 per year limit, with a special rule applying in the year you reach full retirement age that allows you to earn more. Once you reach full retirement age this concern no longer exists, and you can earn any amount without affecting benefits. For the purposes of both SSDI and retirement benefits unearned income, regardless of the amount, is not counted against monthly benefit amounts or eligibility.
Oil and Gas Payments
Luckily, in most situations, oil and gas payments are considered unearned income and do not affect disability insurance or retirement benefits. This does not mean that you can completely ignore oil and gas payments. Oil and gas payments can become earned income, and affect your benefits if you hold yourself out as doing some form of oil and gas business, incorporate your land or interest into a business entity, or otherwise treat it as self-employment income.
If you are uncertain about incoming oil and gas payments and how they may affect your disability insurance or retirement benefits or are facing cessation or reduction of benefits due to outside income, please contact our office at (304) 845-9750. We have the expertise and experience in both oil and gas and social security benefits to maximize your benefits and to prevent issues from arising later.
I hope this discussion has helped provide some insight into how oil and gas payments can affect your social security benefits. This is by no means an exhaustive explanation of any of these topics, but a starting point to give a basic understanding. There are many questions that could still be asked in relation to this topic. However, those topics are too numerous to answer in any single or even set of articles. Unlike our guiding friends, the Clampetts, we do not have 9 seasons or 31 years to handle any and all problems that could be dreamed up by our writers.
It’s important that you understand issues may arise, that you should think ahead and have a strategy for how you will handle those issues, and that you know you have attorneys to contact here at Gold, Khourey & Turak when those issues are too big for just you to handle. Contact us today at (304) 845-9750 for a free consultation.