Hi Larry,

I am a 43-year-old mother who received Social Security Disability Insurance while caring for my disabled son. When he turned 18, he qualified as an adult for the Idaho Medicaid Waiver for adult developmental disability care payments. Last year I began receiving payments through an Idaho State Medicaid Waiver program managed by Idaho Consumer Direct Fiscal Agent to compensate for a disabled person in my home. These are known as "difficulty of care" payments and are exempt from federal income tax under IRS Notice 2014-7. The IRS also treats these payments as unearned income. In addition, they are exempt from FICA/FUTA taxes because I am a parent providing care to my adult child. Therefore, I am not earning additional credits on my own SS record. Since I am over my FRA, a representative at my local Social Security office tells me these payments will count against the SS earnings limit. As a result, my SSDI benefit has ended. I appealed. The money is federally exempt due to the expenses of keeping my son at home. I've attached the link to a similar question answered in 2019. I DO receive a W2. However, my employer had me fill out a form indicating that the earnings are federally exempt from taxation for my specific situation. Can the Social Security Administration count untaxed income in calculating benefits? As my claim was approved ten years ago while caring for the same person, and SSA's expert witness opined I could not work as a caregiver in a work setting, I feel my benefits should continue. Idaho Consumer Direct has indicated the SSA always gives their employees in my situation a hard time, but it gets resolved when SSA figures out the Medicaid Waiver exemption. Idaho Housing and Finance, who manages our household's Section 8 voucher, dropped our rent to $153 per month and didn't count the Medicaid Waiver unearned income reported on the W2. The Department of Health and Welfare has allowed me to keep Medicaid premium payments towards Medicare Insurance and hasn't counted the unearned income. Idaho Consumer Direct has indicated via email that the income cant count in my situation. It seems the fact there's a W2 creates a lot of problems for those who receive the special exemption status to keep a family member at home. Is the SS representative correct? What is my best argument for my appeal? I've attached the link below.

https://maximizemysocialsecurity.com/ss-representative-correct-about-my-...

Thank you,

Valeria

Hi Valeria. If your SSDI benefits have been suspended or terminated because Social Security determined that you been performing substantial gainful activity (SGA), then you'll either need to convince Social Security that your income is unearned as opposed to earned income, or that if it is earned income then the countable amount is below SGA level.

The fact that your income is exempt from income taxes doesn't necessarily mean that it isn't considered as earned income for SGA purposes. Any income received for performing services can potentially count for SGA purposes if it is classified as either wages or self-employment income. I frankly don't know for sure whether or not the income you are describing would count as earned income for SGA purposes. The only thing that I can suggest is that you pursue your appeal at least through the Hearings level if necessary (https://www.ssa.gov/benefits/disability/appeal.html). That way the full facts of your case can be presented to an Administrative Law Judge (ALJ) who should make a determination that's in accordance with Social Security law.

Best, Jerry