Annuities, Pensions, Retirement and Disability Payments

Annuities, Pensions, Retirement and Disability Payments. A. These types of income are defined as follows: 1. An annuity is a sum paid yearly or at other specific times in return for the payment of a fixed sum. Annuities may be purchased by an individual or by an employer. 2. Pensions and retirement benefits are payments to a worker following retirement from employment. These payments may be paid directly by a former employer, by a trust fund, an insurance company or other entity. 3. Disability benefits are payments made because of injury or disability. B. These types of income are treated as follows: 1. Annuities, pensions, retirement benefits and disability benefits are counted as unearned income. a) An exception is certain accident disability benefits paid within the first 6 months after the month an employee last worked are treated as earned income.