What type of income is considered unearned for the beneficiaries?

Income from government benefits is categorized as unearned income for beneficiaries. This classification is important because unearned income typically refers to money received without the need for active employment or engagement in a business enterprise. Government benefits can include Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), unemployment benefits, and other forms of public assistance. These payments are designed to provide financial support to individuals based on eligibility criteria rather than work performed, and they fundamentally differ from earned income, which comes from wages or self-employment where active participation or service is rendered.

In contrast, wages from employment are considered earned income because they result from actual work performed. Similarly, self-employment income is also classified as earned income since it is derived from services or goods offered in a business context. Investment earnings also differ from government benefits as they come from capital or investments that have been made, such as interest, dividends, or rental income, and are similarly regarded as unearned income, but they do not fall under the same category as government assistance.