Social Security Disability Insurance (SSDI) does not have strict income and asset requirements like Supplemental Security Income (SSI) does. But one may still wonder what types of incomes can affect SSDI payments.
Incomes that can affect SSDI payments are mostly earned income. Apart from this, there are other incomes that can have an effect on the payments, such as sick pay, vacation pay, and workers’ compensation benefits.
Keep reading below as we describe how these incomes affect SSDI payments in more detail.
How Much Money Can You Make While Getting Social Security Disability?
There are a lot of variables related to this subject because Social Security deals with so many different kinds of situations. To respond to it, we will first examine the fundamental quantitative aspects and then dive into the specifics.
Bear in mind that the Social Security Administration does not analyze all kinds of income with the same metrics, so your circumstances can be different from others. If you get child support, for example, that money won’t be considered your monthly take-home pay.
You need to make less than $1,470 per month to be eligible for SSDI. In order to be eligible for SSI, your monthly income must be less than $794.
Even though these figures are subject to change, the maximum allowable earnings typically fall somewhere in this range.
Anyone who earns more than this amount through jobs or unreported activities is considered to be involved in “substantial gainful activity” (SGA). People with SGA are not eligible for SSDI since they are deemed sufficiently independent to be able to support themselves and can therefore work.
These thresholds are calculated annually, but they rise somewhat every year because of inflation and the national average pay index.
In addition, the blind have a higher income threshold ($2,460) for SSDI benefits. This is due to the fact that the United States government acknowledges blindness as a distinct form of impairment in a world that is geared toward those who can see.
This supplementary income is meant to cover any additional costs that individuals who are blind may incur in order to maintain their standard of living.
Five Types of Incomes That Will Affect SSDI
You must disclose all of the following income to qualify for SSDI benefits, in addition to wages and income from self-employment:
1. Earned Income
For SSDI purposes, the primary sources of income to report are earnings from employment and money obtained from self-employment. Earning more than $1,470 per month in 2023 proves that you’re physically able to work and are no longer disabled. In 2023, a blind person who wants to continue receiving benefits must have a monthly income of less than $2,460.
2. Sick Pay
Sick pay is money that an employer or private third party (e.g., a union or insurance company) gives an employee who is unable to work due to illness or injury.
Sick pay that is received within six months of stopping work is considered income. Reviewing the pay stubs or making direct contact with the employer is necessary in order to ascertain whether or not the employee made contributions to a sick pay plan through payroll deductions.
This is necessary in the event that a claim for sick pay is made within six full calendar months of the employee having stopped their previous employment. Employee contributions to their own sick pay within the first six full calendar months after leaving employment are not considered earnings by the Social Security Administration.
3. Vacation Pay
Earned income is defined by the Social Security Administration as “income from wages or net earnings from self-employment.” Earned income includes not just your base salary but also any bonuses, incentives, vacation money, or severance payments that you receive and are required to report to the Social Security Administration.
Therefore, your vacation pay would most certainly count as earnings when calculating your Social Security benefits.
Getting your travel costs covered usually doesn’t qualify as income, so that shouldn’t be an issue. On the other hand, if your employer takes out Social Security taxes from your vacation pay, this indicates that they regard the amount paid to be earned income, which implies that it should be counted for the purposes of the Social Security earnings test.
4. State Disability Insurance
It is possible to collect SSDI and state disability insurance at the same time; however, this may result in a reduction in the total amount of payments that beneficiaries receive.
The Social Security Administration cautions that receiving disability payments from both the federal government and a state may result in a reduction of your SSD benefits.
In order to apply for state disability insurance, the Social Security Administration offers resources and information on programs such as:
- Medicaid
- Supplemental Nutrition Assistance Program (SNAP, also known as “food stamps”)
- Temporary Assistance For Needy Families (TANF)
- Other need-based state or local aid
5. Workers’ Compensation Benefits
In spite of the fact that you can qualify for both SSDI benefits and workers’ compensation benefits for a single condition, the amount of SSDI benefits you get could be reduced if you are also receiving workers’ compensation.
This is the case regardless of whether or not your workers’ compensation is being paid out in a flat sum or in installments.
The federal government mandates that your total income from workers’ comp and SSDI cannot exceed 80 percent of your average wages prior to when you became disabled. Therefore the lump sum amount is subjected to an offset, a reduction of one of the benefits to comply with this rule.
To attain the 80 percent threshold, most states lower SSDI benefits, but others reduce workers’ compensation.
If you are receiving workers’ compensation benefits on a periodic basis, Social Security will add those payments to your SSDI total in order to calculate how much of an offset you will receive.
In order to calculate the impact of a one-time payment, Social Security takes the total amount of the settlement and divides it by the number of months during which you would have been eligible to receive workers’ compensation benefits.
Then, it uses that number to determine the amount of the offset.
Income from sources other than employment, such as interest and dividends on assets, need not be declared because they are excluded when determining eligibility.
Income That Does Not Affect SSDI
There is a minor distinction between SSDI and SSI. With SSDI, most income that does not come out of work earnings or work done under the table is not considered substantial gainful activity.
Investments, interest, the earnings of a spouse, and other assets fall into this category.
When discussing SSI, the situation becomes somewhat more complex. There is a possibility that only specific assets and interest will be factored into the monthly total. The substantial gainful activity limit of $3,000 per month per couple is, however, subject to adjustment based on the partners’ incomes.
You are still eligible to apply for SSDI or SSI benefits, even if you have substantial gainful activity or employment.
It really depends on the individual’s circumstances. You may still be eligible for SSDI or SSI based on the severity of your condition and your current income level.
Never let these figures dissuade you from applying completely; it will always be preferable to submit an application even if it means you will not qualify for the benefits, as opposed to not submitting an application at all.
Trial Work Periods
You should be aware that Social Security gives individuals the opportunity to test their capacity to work during a trial work period without the earnings from that labor impacting their SSDI benefits. Earnings from the trial period, which lasts nine months (and may be spread out over a longer length of time but within 60 months) do not count towards the substantial gainful activity limit.
In 2023, a trial work month is defined as any month in which you make more than $1,470. You will not lose your disability payments or have them reduced if, during a trial work month, your income is higher than the maximum substantial gainful activity limit.
After the initial trial work period ends, the extended eligibility period of 36 months will begin. During this extended period, the Social Security Administration will analyze your earnings to determine whether or not you continue to have a disability and are qualified to receive SSDI benefits.
This evaluation will take into account any earnings that are in excess of the substantial gainful activity thresholds.
If Social Security Administration officials conclude that your monthly wages exceed the threshold for substantial gainful activity, they will consider your disability to have ceased rather than terminated permanently.
By classifying it as ceased, the Social Security Administration is able to continue making payments to you not only for the month in which you went over the allowed amount but also for an extra two months as a kind of grace period.
It is possible to get your SSDI payments back if your earnings drop beneath the substantial gainful activity limits within the grace period.
Extended Period of Eligibility
An “extended period of eligibility” (EPE) is a 36-month window that begins once a person has accrued nine months of a trial work period.
Throughout the EPE, Social Security considers whether or not a beneficiary’s monthly wages are over the relevant substantial gainful activity amount, after deducting any gross salary reductions for IRWE or work subsidies.
Social Security will determine that a person’s disability has ended once their adjusted net wages reach or surpass the corresponding substantial gainful activity amount.
After three months have passed since the disability ended, the SSDI payment will stop. Reimbursement of SSDI benefits will begin again if monthly earnings fall below the substantial gainful activity level at any time during the 36-month EPE.
Expedited Reinstatement of Benefits
There is a separate five-year period after the EPE ends called “expedited reinstatement of benefits” (EXR)
Social Security will temporarily reinstate SSDI payments while a medical review is conducted if the underlying impairment worsens and again prevents the individual from earning substantial gainful acitvity within five years after the conclusion of the 36-month EPE.
The interim SSDI benefits will become permanent if the medical assessment verifies the impairment or blindness.
Disability insurance payments will end immediately if a medical assessment determines that the recipient is not disabled due to a medical condition, although any previously awarded benefits will not be considered an overpayment.
Tips to Preserve Your Social Security Disability Insurance Payments
Approval for Social SSDI payments prevents financial hardship, but the majority of applicants must go through a challenging process to receive them. Therefore, you need to know what to do in order to keep them. To maintain your eligibility for SSDI payments, you must do the following:
- Continue your medical treatment, as this is further evidence that you continue to be disabled.
- Keep in constant touch with the Social Security Administration.
- If your situation has changed, including your address, criminal record, name, custody of an SSI-eligible kid, or your job status, you must inform the Social Security Administration.
When the Social Security Administration reviews your condition, it is usually to confirm your continuous need for disability benefits. It is likely that your SSDI benefits are going to stay the same so long as you keep in touch with the Social Security Administration and submit medical evidence that your medical condition has not improved.
If the Social Security Administration decides to review your case and the review results in you losing your SSDI benefits, you have 10 days from the date the Social Security Administration notifies you of their decision to appeal the decision.
Conclusion
If you are an SSDI beneficiary, it is important that you be as transparent as possible and disclose all of your income sources to the Social Security Administration. For more information, please talk to a disability attorney about what kind of income you are allowed as an SSDI recipient.
