Many disabled people find that relying only on Social Security Disability Insurance (SSDI) benefits is not always enough to make ends meet. Fortunately, there are other income sources you can explore to supplement and maximize SSDI benefits.
SSDI recipients have the option to receive alternate income sources like part-time work, Medicare, and private disability insurance. It’s important to keep in mind specific rules and regulations provided by the Social Security Administration (SSA) when considering these alternatives.
This article discusses alternative income sources for SSDI recipients in more detail.
SSDI Overview
The Social Security Disability Insurance program provides monthly benefits to individuals who have accumulated enough Social Security work credits and are unable to work due to a medical condition.
In order to be eligible for SSDI benefits, applicants must have a health condition that is expected to last for a minimum of 12 months or result in death.
The amount of SSDI benefits a person receives is based on the taxes they’ve contributed to Social Security and their income level. Additionally, SSDI benefits may extend to the children and spouses of disabled individuals in the form of auxiliary benefits.
Alternative Income Sources for SSDI Recipient
Disabled individuals have the option of obtaining alternative income sources in addition to SSDI. These benefits are listed below:
COBRA
This federal law, known as the Consolidated Omnibus Budget Reconciliation Act (COBRA), allows you to keep your employer-provided health insurance for a certain amount of time after you quit a job.
Disabled individuals can extend their workplace coverage for up to 29 months, although the standard duration for remaining on an employer plan is typically 18 months.
Supplemental Security Income
Similar to SSDI, you can obtain Supplemental Security Income (SSI) benefits through the Social Security Administration. However, the two programs have significant differences.
SSI benefits are not dependent on your previous employment history; rather, you will receive SSI benefits if you meet the age or income requirements. SSI is generally for individuals who don’t earn more than $1,971 from work each month. The income limit increases for couples and when parents apply for children. SSI looks at other sources of income besides your job, like disability benefits, unemployment, and pensions.
Your SSI benefits will decrease if you have “countable income” from other sources, including SSDI. In order to be eligible for SSI benefits, you must be at least 65 years old, blind, or fulfill the same criterion of “disabled” that you must satisfy in order to qualify for SSDI benefits.
Additionally, you must have limited financial resources (under $2,000 for individuals and $3,000 for couples) and a low household income. In most states, if you qualify for SSI, you should become eligible for Medicaid right away.
Workers’ Compensation
You are eligible for both SSDI and workers’ compensation disability benefits if you sustain an injury or illness while on the job.
However, the amount of benefits that you receive will be reduced if the total amount of SSDI and workers’ compensation disability payments that you receive exceeds 80% of your pre-disability earnings.
This applies whether you receive your workers’ compensation payments as a lump sum or through monthly payments. When you get a payment in the form of a lump sum, the settlement amount is divided into equal parts to estimate how much you would have gotten on a monthly basis if the money had not been received all at once.
This is used to figure out how much of the payment should be offset to keep them below 80% of your normal pre-injury earnings.
Private Disability Benefits
Private disability insurance is another great option that can help replace a certain percentage of your pre-disability income. However, in order to be eligible for private disability benefits, claimants are usually required to pay premiums.
They must also meet the definition of disability as outlined in the policy’s criteria. These benefits will not affect your SSDI income; however, your SSDI benefits may offset your private disability insurance amount.
Going Back to Work
The Social Security Administration permits you to work while receiving SSDI benefits, but there are certain limitations you need to keep in mind.
For example, if your monthly income exceeds the SGA limit, your disability benefits will be terminated. In 2024, SGA is defined as earning more than $1,550 (or $2,590 for blind applicants).
If your income exceeds this limit, you will become ineligible for benefits unless you are participating in one of SSA’s work incentive programs.
These programs are designed to help people who are receiving SSDI transition back into the workforce without jeopardizing their benefits.
For example, the Ticket to Work program provides SSDI recipients with job training, work experiences, and other resources to help them become self-sufficient.
The Ticket to Work program also temporarily lifts the earnings limits on substantial gainful activity. This means you can continue receiving disability benefits while exploring job opportunities.
If you are able to secure employment through the program, your disability benefits will be suspended.
However, if you become unable to work again due to a worsening medical condition, the payments will be reinstated. This is also known as expedited reinstatement and will be in effect for 5 years from the suspension of your benefits.
Impact of Other Incomes on SSDI
It’s important to understand how different income sources can impact your benefits to ensure compliance with SSDI program regulations and avoid unexpected changes or overpayments.
While Social Security Disability Insurance does allow individuals to work, they are required to earn less than the Substantial Gainful Activity limit.
This means that if your countable income exceeds the SGA limit (which is $1550 in 2024), it may lead to the suspension or termination of benefits.
Additionally, all SSDI applicants are required to report any changes in their income in a timely manner. This can help prevent fraudulent benefit payments and allow the SSA to update your earnings records.
Conclusion
There are many alternative income sources that SSDI beneficiaries can obtain without jeopardizing their benefits. However, it’s important to know the program’s rules surrounding the additional income you apply for.
