Many professions often entail jobs that pay under the table. This usually means that this income is not declared to the IRS. If you are receiving Social Security Disability Insurance (SSDI), you may be wondering whether it’s okay to collect SSDI benefits while working under the table.
It is generally not a good idea. Not disclosing any kind of income to the Social Security Administration (SSA) may constitute fraud. As such, this can have varying consequences, including being required to pay back some of the SSDI payments along with penalties.
Keep reading below as we discuss more details about working while on SSDI.
Can I Work while receiving SSDI benefits?
The SSDI program is administered by the Social Security Administration. SSDI, or Social Security Disability Insurance, is a type of insurance from which people might collect earned benefits if they meet certain rules set by the Social Security Administration
Paying into Social Security is similar to investing in an insurance plan that will pay out a percentage of your average salary if you become disabled and unable to work. Eligibility to receive payments is determined by Social Security.
Whether or not you are allowed to work while receiving SSDI benefits is subject to several restrictions. To begin, you will not qualify for these benefits if you are currently engaged in SGA, also known as “substantial gainful activity.” That’s when your monthly income is above a certain threshold. If your monthly income in 2023 is $1,470, or $2,460 if you are blind, then you are considered to be engaged in SGA.
Existing beneficiaries have the option of returning to work through the Social Security Administration without having their benefits terminated. This is accomplished via a Trial Work Period. According to the terms of the trial work period:
You are permitted to work while receiving benefits and earn any amount for a total of nine months within a rolling period of 60 months. There is no requirement for a specific order of months.
If you make more than a specific amount in a given month, that month will count toward your nine-month trial work period. In 2023, the amount is $1,050.
After more than nine months of employment out of a total of sixty, you are eligible for a 36-month Extended Eligibility Period.
As long as your wages do not go over the SGA threshold (which, keep in mind, is $1,470 for non-blind people as of 2023), and you continue to have a disabling impairment, you will receive your full benefits throughout that period. Some expenses, such as those needed to help you continue working despite your disability, may be excluded from these considerations.
If, during the extended eligibility period, your income reaches the SGA level, your benefits will be terminated, and you will get the full payment for the month in which the termination occurs plus two further months.
If, during those 36 months, your earnings fall below the SGA level, you have the option of contacting Social Security to have your benefits reinstated. As long as you continue to be disabled and do not return to SGA, your disability benefits will continue unabated.
If the 36-month period is up and your wages are higher than SGA, then your benefits will be terminated; however, if you need to stop working again due to the same impairments within five years of the extended eligibility period, you will be eligible for a faster re-statement of benefits.
The purpose of the trial work term, despite the seeming complexity of the rules governing it, is to facilitate your return to work. Working within the Social Security Administration’s standards might be difficult, but a disability benefits attorney can help ensure you don’t unintentionally lose your benefits.
What is Meant By Working Under the Table?
To be paid “under the table” means you or your company is not declaring the money you’ve been paid to the IRS. Your company is most likely paying you in cash, without withholding any taxes. These companies might not need you to fill out important tax documents like a W-4 or I-9.
Under-the-table payments are more common in certain fields than others, although they are possible everywhere. Cash payments are frequently made without reporting to the Internal Revenue Service (IRS) for manual labor, child care, handyman work, and housework.
It’s common for a significant amount of tip money to be paid in cash in some service industries, and not be disclosed to the IRS by those receiving it.
Can I Receive SSDI If I’ve Previously Worked Under the Table?
Depending on how much money a person makes in a given year, they have the potential to earn anywhere from one to four work credits. When it comes to Social Security disability benefits, eligibility is established based on the number of qualifying work credits you have.
In order to be eligible for Social Security Disability benefits, the applicant must have held employment, and pay social security taxes to have accrued work credits. They must have accrued forty quarters of coverage or work credits, and twenty of these quarters of coverage must have been obtained in the ten years before the month when the person became disabled.
If a person has been working under the table, this means they have not contributed to payroll taxes and therefore have not accrued work credits. Their earnings will not be disclosed to the Internal Revenue Service if they have not paid the required payroll taxes.
This will create a roadblock for someone seeking Social Security Disability benefits. A person’s Social Security earnings record is based on their tax return. A person will not be covered by Social Security Disability Insurance if the IRS does not enter their income into their earnings record.
Even if an individual has previously worked under the table, there is a chance that they will still be eligible for disability payments from the Social Security Administration. Another disability program offered by Social Security is need-based as opposed to insurance-related.
Supplemental Security Income, or SSI, provides disability benefits to children, the elderly, and the disabled; to be eligible applicants have to satisfy income and other asset-related financial requirements.
Can I Receive SSDI While Working Under the Table?
People who are receiving Social Security Disability Insurance (SSDI) benefits sometimes try to supplement their income by working under the table. It’s not a smart idea because it might be considered fraud if it ever comes to light.
If you are able to work and are in need of financial support, you should look into legitimate employment options.
Once your application for benefits has been approved, you might be able to go back to work. You can keep receiving benefits even if your employment status has changed, as long as you follow the rules set forth by the Social Security Administration.
If the Social Security Administration finds out you’ve been working under the table while collecting benefits, you might be required to repay the amount you received during the time you were employed, plus possible penalties.
Depending on the circumstances, you may potentially lose eligibility for disability benefits. The United States Department of Justice warns that criminal charges and a conviction are also possible.
Conclusion
When collecting SSDI, it’s important to be as transparent as possible with the SSA to make sure that you don’t get into trouble unintentionally. It’s also recommended to consult an SSDI attorney if you need help applying for benefits or are unsure of what other benefits you might be eligible for.
