Food Stamps, also known as the Supplemental Nutrition Assistance Program (SNAP), helps people with low incomes buy food. But what kind of money counts when the government decides if you can get Food Stamps? It’s not just about how much you make from a job. There’s also “unearned income,” which is money you get that isn’t from working. This essay will explain what unearned income is and how it affects your eligibility for Food Stamps.
What Counts as Unearned Income?
So, what exactly is unearned income, anyway? Unearned income is money you receive that you didn’t earn through employment. Think of it as money coming to you from sources other than a paycheck. This could be anything from social security to investments. Figuring out what unearned income is can be tricky, as it depends on the specific rules of the Food Stamp program in your state. Let’s break down some common examples.
Social Security and Retirement Benefits
Social Security benefits are a major source of unearned income for many people. This includes retirement benefits, disability payments (like SSDI), and survivor benefits. These payments are usually made monthly to people who have worked and paid into the Social Security system, or to their family members. It’s important to know that the entire amount of these benefits is generally counted as unearned income when applying for Food Stamps. Your state will look at the gross amount, not the net amount after taxes or deductions.
For retirement benefits, these also count, as they are essentially income you did not earn through a job. Pension plans and other retirement accounts distribute income to retirees, and this income is counted towards your Food Stamp eligibility. These payments will be included in your total income. You will need to report these payments to your local food stamp office. Here’s some things to keep in mind:
- Report your benefits to the agency.
- Provide documentation.
- Notify of any changes.
- Keep records.
Understanding these types of income is crucial when applying for SNAP benefits.
Alimony, Child Support, and Legal Settlements
Alimony, which is money paid from one ex-spouse to another, is considered unearned income. It’s money someone receives due to a previous marriage, not from current employment. Similarly, child support payments, which are made by a parent to support their child, are included as well. This money is provided regularly to help the child and is therefore counted as unearned income for Food Stamp purposes. These forms of payments are typically seen by Food Stamps as unearned income, just like Social Security and Retirement benefits.
Legal settlements, too, can be considered unearned income, but it depends. If you win a lawsuit and receive a lump sum payment, the Food Stamp office might treat that differently than regular monthly payments. For example, here’s a possible breakdown:
- Lump-Sum Payments: These are often counted as an asset, not income, in the month they are received.
- Monthly Payments: Regular payments from a settlement will likely be counted as income.
- How it’s spent: How you spend that money will be considered.
- Legal Advice: You may want to speak with an attorney.
Because legal settlements can be complex, it’s important to report them and get specific information from your local Food Stamp office. Different states may have different rules about settlements.
Investment Income and Royalties
Money you make from investments or royalties falls under unearned income as well. This includes dividends from stocks, interest from savings accounts, and any income from real estate investments. If you have a savings account that earns interest, that interest is considered income, even though you didn’t work for it. If you’ve written a book, song, or created some form of intellectual property that earns royalties, that income is also considered unearned income. All of this is counted towards your total income for SNAP purposes.
It’s not always straightforward to figure out exactly how this works, as the amounts and the schedules for when you get paid can vary widely. Here’s an example of the types of investment income:
| Type of Income | Example |
|---|---|
| Dividends | Money from stocks. |
| Interest | Money from savings accounts or bonds. |
| Royalties | Income from intellectual property. |
| Rental Income | Money from renting out a property. |
You’ll need to provide documentation, like bank statements and tax forms, to prove this income.
Other Forms of Unearned Income
There are several other types of income that may be considered unearned. Unemployment benefits, which are payments from the government when you’re out of work, are counted. They replace your wages when you’re between jobs, but they still count as income. Workers’ compensation, which is money received due to a work-related injury, is usually included too. This form of income is meant to help you pay for medical expenses and lost wages.
Also, gifts and inheritances could potentially be counted, though it depends on the rules of your state and the amounts involved. For instance, if you get a very large gift, it could be considered an asset and affect your eligibility. Depending on the amount, it could affect your status for food stamps. Here’s some of the other things to consider:
- Gifts: Cash or other gifts could be income.
- Inheritances: Can be counted as an asset.
- Scholarships: Scholarships used for living expenses count as income.
- Grants: These are similar to scholarships, so they are treated similarly.
It’s essential to report all income sources to the Food Stamp office for accurate eligibility determination.
In conclusion, unearned income covers a broad range of money you receive that’s not from working. This includes Social Security, retirement funds, child support, and various forms of investment and other payments. Knowing what counts as unearned income is super important if you’re applying for Food Stamps. Always report all income truthfully to your local SNAP office. This helps make sure that people who really need help with food get the support they deserve.