July 28, 2020 No, lottery winnings do not affect your social security disability benefits (SSDI). But it can reduce or totally cut your Supplemental Security Income (SSI). That’s because SSDI is an earned benefit.

Most people who are found disabled will receive SSI or Social Security disability benefits for many years, but there are six factors that can lead to a discontinuation of those benefits:

• Return to work
• Receipt of income or resources
• Fraud
• Medical improvement
• Incarceration or institutionalization
• Change in age category

Return to Work

Disability is defined as an inability to work. Therefore, if you return to work, your disability benefits might end. “Work” or “Substantial Gainful Activity” (SGA) is a term of art used by SSA, to describe work activity over and above a certain level. In 2017 SGA is $1,170/month gross income (before taxes are taken out), or $1,950/month for blind persons.

If you are receiving Social Security Disability benefits (NOT SSI), you may be eligible for a “trial work period” (TWP) of up to 9 months. During a TWP you can work and keep both your paycheck and your disability benefit. If you earn $840 per month (in 2017), this will count as a trial work month. If you earn less, it will not count. The 9 months of trial work do not have to be consecutive, but after you have exhausted those 9 months, your disability will cease the next month that you earn SGA. You will then get two more months of benefits and then they will end. If, within 3 years of the end of your TWP, you have to stop working again because of your impairments, SSA may turn them back on again. This is your Extended Period of Eligibility, and you will need to ask for it when you apply.

The most important thing to remember is to advise SSA if you return to work, at any level. Do it in writing, and have them date-stamp a copy of the notice, in case you later need to prove you told them about it. If you do not report earned income, you may have a fraud problem.

• That person told my roommate that he does not have a social security number to turn his winnings into cash. He made a deal with my roommate to share the winnings 80-20. My roommate will get $20,000 of the winning money if they take the cash with my roommate's social security number. My roommate accepted the deal and got his money.
• It is true that gambling winnings are considered as unearned income when you file your income tax return. But the question referred to whether or not gambling winnings were considered earned income that affect the amount of Social Security retirement benefits in the annual earnings test.

Receipt of Income or Resources (SSI)

SSI is a needs based program (in contrast with Social Security Disability). If you are receiving SSI and you OR YOUR SPOUSE come into some money, through work, inheritance, lottery, tax return, gambling, legal settlement or gift (etc), you should go in and speak with SSA immediately. The same is true of anything of significant value, such as stocks, bonds, automobiles, real estate (etc) that could be liquidated.

Unearned income will reduce your SSI benefit dollar for dollar. Earned income will reduce your SSI benefit $1 for every $2 earned.

If you have resources in excess of $2,000, you do not qualify for any SSI that month. SSA can help you understand the rules and how they apply to your unique circumstances.

[Read More: Should I Try and Work During a SSD Review Process?]

Fraud

If you do not report income or resources, you may be found to have engaged in welfare fraud. In that event, your benefits will end, you will be assessed an overpayment, and you should contact a criminal attorney.

Medical Improvement

SSA will periodically review your case. This typically happens every 3 to 7 years, and is known as a “continuing disability review” (CDR). A CDR is usually less rigorous than the original application process, but if SSA determines that your condition has improved, and that you are now able to work, your benefits will end.

Do Gambling Winnings Affect Social Security Benefits 62

If you receive a CDR notice that you are no longer disabled, you may appeal that decision by filing a request for reconsideration within 60 days. If you wish to continue receiving your benefits while the appeal is pending, however, you must file it within 10 days.

The best way to stave off a discontinuation of benefits through CDR is to continue getting appropriate medical and/or mental health treatment for your disabling conditions. If you are not getting treatment, there will be an assumption that you do not need it because your conditions have improved.

[Read more: Social Security and Chronic Fatigue Syndrome and Fibromyalgia]

Incarceration or Institutionalization

If you end up in prison or in an institution for 30 days or more, your benefits will be placed in suspension. If you are released within 12 months, the benefits can be reinstated, but if it is longer than 12 months you must reapply.

Do Gambling Winnings Affect Social Security Benefits Amount

Change in Age Category

Turning 18: Children receiving SSI benefits will have their condition re-evaluated upon turning 18 according to adult eligibility requirement standards which can result in loss of benefits.

Do Gambling Winnings Affect Social Security Benefits Security

Reaching Retirement Age: When you reach normal retirement age, your Social Security Disability benefits (DIB) will be changed to Social Security Retirement benefits (RIB). You should not see much of a change, although depending on the circumstances of your work history, your RIB may be significantly different than the SSI benefit amount.

Do Gambling Winnings Affect Social Security Benefits Social Security

Most factors leading to a cessation of SSI or Social Security Disability benefits are fact-based, and are properly addressed by the SSA District Office. If you have any questions or concerns about the possible cessation of your benefits, or believe that SSA has made an error, you should contact an experienced Social Security Disability Lawyer.