A person can receive government benefits from a variety of sources, for a variety of reasons. If he qualifies, a person can receive benefits for being unemployed, for having young children, for being retired and for being disabled. However, many of these benefits require that a person have only a small income. If a person sees his income increase too much, it may cause him to receive fewer benefits, such as with certain people receiving Social Security benefits.
Type of Benefits
The amount of money you can earn will depend entirely on the type of benefits that you receive. Each kind of benefit has its own rules. For example, a person who receives food stamps cannot make more than the income limit at which the federal government defines poverty -- in 2011, $10.890 per year for an individual with no dependents -- while a person receiving unemployment benefits cannot even make this much without seeing a cut in his benefits.
Many benefits will have an absolute cap on the amount of money that a recipient can earn. However, other benefits will have a sliding scale of benefits. Generally, this means that the more money the person makes, the less money the person can receive in benefits. At a certain point, a person will make so much money that he won't receive any benefits at all. For example, with Social Security benefits, a person receiving benefits who is eligible for full retirement in 2011 will see $1 deducted from his benefits for each $3 he earns above $37,680.
Type of Income
Also, to determine how much benefits you can receive, you must look at what the agency issuing the benefits defines as income. While come agencies define all types of money received by the individual, others consider only money earned from a job to be income. In some cases, benefits from other government agencies will be considered income -- for example, most state agencies issuing unemployment benefits consider cash benefits from the federal government to be income -- while in some cases they will not.
To determine exactly how much you can earn before you begin to affect the amount you receive in benefits, you must consult the agency that is issuing the benefits. Public agencies are generally required to make public the formula they use to calculate the amount of benefits that people can receive. By consulting this formula, you can work out for yourself how much you can make without affecting your benefit size.
- "Benefits and Beyond"; Thomas E. Murphy; 2009
- Social Security Administration: How Work Affects Your Benefits