FRANKFORT, Ky. -- Some Kentucky disaster survivors may be wondering if accepting Commonwealth and federal disaster assistance grants will cause them to lose Social Security benefits, pay additional income taxes, or change their eligibility for income-based benefit programs.
The answer is no.
Officials with the Kentucky Division of Emergency Management (KYEM) and the Federal Emergency Management Agency (FEMA) want to reassure survivors of the severe storms, tornadoes and floods that swept the Commonwealth between April 22 and May 20 that FEMA disaster assistance funds are tax-free.
The disaster assistance funds are not considered income and will not affect your Social Security benefits, your Commonwealth or federal retirement benefits, or any other temporary public benefit.
Here are answers to some common questions Kentucky survivors may have regarding disaster assistance grants:
Question: 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 other needs are not considered income.
Question: Will receiving a disaster assistance grant make my income increase to the extent that I am no longer eligible for Medicaid, food stamps, or Temporary Assistance for Needy Families administered by the Kentucky Cabinet for Health and Family Services?
Answer: No. Grants for housing and other needs are not counted as income in determining eligibility for any income-tested benefit programs funded by the U.S. government or the Commonwealth of Kentucky.
Question: Does FEMA disaster assistance need to be repaid?
Answer: No. FEMA aid is a grant that does not need to be repaid. Some affected residents also may seek US Small Business Administration loans, which must be repaid.
For other questions, consult your local attorney or contact Kentucky Disaster Legal Services at 877-625-9839. Those with a speech or hearing disability should call 7-1-1 to be connected to a telephone relay service.
FEMA's mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.