FEMA And State Grants Won't Affect Social Security Or Taxes
Release Date: February 22, 2006
Release Number: 1606-144
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AUSTIN, Texas -- Some hurricane disaster aid recipients have expressed concerns that their state and federal grants might cause them to lose U.S. Social Security Administration benefits, pay additional taxes or give up income-based benefit programs. State and federal officials say those concerns are unfounded.
In the wake of hurricanes Katrina and Rita, U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) and GDEM have awarded millions of dollars to pay for temporary housing and for Other Needs Assistance (ONA), which covers items such as personal property loss, medical care and transportation.
For more information or to find copies of Social Security publications, visit the web site at www.socialsecurity.gov/pubs. To ask specific questions or to access its automated 24-hour phone service, call toll free 1-800-772-1213 or TTY 1-800-325-0778 for the deaf or hard of hearing. All calls are treated confidentially.
Here are answers to the most common questions:
Question: I'm between 62 and 65, and have chosen to receive Social Security benefits. If I earn more than a certain amount each year, I must repay $1 of my Social Security payment for every $2 earned. Will FEMA grants add to my income and require me to repay Social Security? Answer: No. FEMA grants for housing and ONA are not counted as income.
Question: I'm over 65, but if I earn more than a certain amount, I must pay tax on my Social Security income. Will FEMA grants boost my income and require me to pay tax on my Social Security income? Answer: No. Again, the IRS does not count FEMA grants for housing and ONA as income.
Question: Will receiving a grant cause my income to increase to the point that I am no longer eligible for Medicaid, welfare assistance, food stamps or Aid to Families with Dependent Children? Answer: No. Grants for housing and ONA are not counted as income in determining eligibility for any income-tested benefit programs that the U.S. government funds.
Question: Does any kind of FEMA or state grant count as income? Answer: Yes. The IRS considers mitigation grants to make homes and businesses safer from future disasters to be taxable improvements to private property. However, these mitigation grants are entirely separate and are not awarded to individuals registering for disaster assistance.
Last Modified: Thursday, 18-May-2006 10:06:09