Unearned income is money that is gained through means other than work, such as inheritance or disability payments. This is taken into consideration in terms of deciding how much disposable income a person has available to them on a regular basis as well as the source of any non-work related income.
There are two basic types of income: earned and unearned. While earned income specifically covers money received in exchange for work of some kind, unearned income covers any other kind of money that is received during a specified time period. These are relevant when it comes to taxation or receiving Social Security benefits.