While Social Security Disability Insurance (SSDI) offers crucial financial support to people who are unable to work due to disability, many people come across circumstances where they want or need to work in order to increase their income. Fortunately, unique guidelines set forth by the Social Security Administration (SSA) allow people to work without jeopardizing their SSDI benefits.
A few tips for maintaining SSDI benefits while working include understanding the Work Trial Period (WTP) and its earning threshold, communicating regularly with the SSA, ensuring timely and prompt reporting in case of any changes, maintaining thorough medical and earning records, learning about work incentives, consulting a financial advisor, and more.
Let’s explore some valuable tips about how one can maintain SSDI benefits while working to help ensure financial stability and independence.
Tips On Maintaining SSDI Benefits While Working
The following sections will cover how a person can work while maintaining their SSDI benefits as well:
1. Earnings Limit and Substantial Gainful Activity (SGA)
Understanding the program is the first step in keeping your SSDI benefits while working. Disabled people who cannot work because of a medical condition that keeps them from working are eligible for disability benefits from the SSA.
However, the SSA offers certain programs that let you work and still receive benefits.
There are several guidelines provided by the SSA that specify how much you can make and still be eligible for benefits. There is a monthly earnings restriction that regulates how much you can earn while still receiving benefits. If your wages reach this threshold, your benefits may decrease or terminate entirely. In 2023, work will be considered Substantial Gainful Activity if it earns you at least $1,470 per month ($2,460 if you’re blind).
SGA is work people do that requires physical or mental exertion, usually mostly jobs done in exchange for pay.
According to the SSA, work is substantial if it requires significant physical or mental activity (or both). Work qualifies as gainful if done for pay or profit.
2. Reporting Monthly Earnings and Work Changes to the SSA
If you work while getting SSDI payments, you must notify the SSA of how much you make. Failure to do so could result in excessive payments that will need repayment or possibly the termination of benefits.
If you are currently receiving Social Security benefits due to a disability, it is also important to notify the SSA as soon as possible if some specific scenarios occur.
For example, if you are starting a new job, you should contact the SSA and report the starting and ending dates of your job. Your job responsibilities, including the number of work hours and changes in salary, must also be reported. You must also report the emergence of job-related expenses resulting from your disability.
Changes to your work can be reported verbally, in writing, or in person. On the SSA website, you can locate your neighborhood office. You can electronically report your monthly income by creating a ‘My Social Security account’.
You will receive a receipt from the SSA as proof of your report. Keep this receipt with your other Social Security documents.
3. Work Incentives Offered by the SSA
As mentioned earlier, the SSA offers several work incentives that allow you to work while getting SSDI benefits. Thus, it is important to keep up-to-date with these work incentives and their rules.
The work incentives that the SSA offers include the Trial Work Period (TWP), an extended period of eligibility, and expedited reinstatement.
Trial Work Period
You can evaluate your capacity to work for at least nine months during the trial work period. If you record your job and continue to be disabled during your trial work term, you’ll continue to get your full Social Security benefits regardless of how much you earn.
The 9 Trial Work Period months don’t have to be used in a row. In fact, you can use them over a 5-year rolling period. In 2023, a TWP month happens when your monthly job income is $1,050 or more before taxes. Keep in mind that the earnings amount for the TWP changes each year.
It’s important to understand that any month in 2023 in which your monthly earnings exceed $1,050 is considered a trial work month. Any work over 80 hours in your business or make over $1,050, after business expenses, while self-employed. You are considered to be in a trial work month period until you’ve completed nine trial work months throughout 60 months.
Extended Period Of Eligibility
You have 36 months after your trial work term to continue working while still receiving benefits for any months if your income is not substantial. During this time, receiving Social Security disability benefits is not dependent on a fresh application or disability determination.
Expedited Reinstatement
It is possible that your benefits might be terminated due to significant earnings. However, you have the option to request that your benefits be reinstated if your condition prevents you from working for the next 5 years.
Fortunately, you will not have to submit another application or wait to continue receiving your benefits during the period when the SSA is examining your medical condition. Expedited reinstatement allows you to reclaim your benefits as soon as possible if you are unable to work due to a medical condition.
4. Track Work-Related Expenses
It is important to always keep track of your work-related expenses. Work-related expenses are those incurred while doing your duties as an employee. It includes transportation costs, equipment costs, clothes costs, education costs, tools, equipment costs, and more.
These costs may be deductible, lowering your taxable income. It is important to note, however, that not all employment-related costs are deductible. The Internal Revenue Service (IRS) has established particular standards for determining which work-related expenses are deductible.
IRS Guidelines for Deductible Expenses
The IRS has established particular standards for determining which work-related expenses are deductible.
The costs must be both ordinary and essential to be eligible for a deduction. Ordinary expenses are those that are normal and accepted in your line of work, whereas required expenses are those that are beneficial and suitable for your line of work.
The IRS has also established criteria for deducting work-related costs. In order to deduct workplace expenses, your total itemized deductions must surpass the standard deduction.
According to the IRS, the total of your deducted expenses must be greater than 2% of your adjusted gross income, and you may deduct only the expenses that exceed that amount.
5. Ticket To Work Program
The SSA’s Ticket to Work program is a free service that assists people who have disabilities in finding work. The program offers job training, career counseling, and other services to assist you in finding and keeping a job.
It is available for individuals aged 18 to 64 who are recipients of SSDI or Supplemental Security Income (SSI) benefits, or both, as a result of their disability. The program is not obligatory. Participation is completely free and voluntary.
6. Continuation of Medicare
Your free Medicare Part A coverage will remain even if your Social Security disability benefits end because of your earnings and if you are still disabled. After the nine-month trial employment term, your Medicare Part A will last at least 93 more months.
After that, you can get Medicare Part A coverage by making a monthly premium payment. You must keep paying the premium if you have Medicare Part B coverage. You must make a written request to cancel your Part B coverage.
7. Working as a Part-Time Employee
If your medical condition prevents you from working full-time, consider working part-time instead. It allows you to work while getting SSDI benefits. Also, working as a part-time employee will help you earn less than the SSA’s defined threshold of earnings. This way, you will earn less than the substantial gain activity while still working and receiving SSDI benefits.
8. Understanding How Taxes May Affect Your SSDI Benefits
If you work while getting SSDI benefits, you should be aware of how taxes will affect your benefits. A percentage of your benefits may be subject to taxation based on your income. The taxable portion of your SSDI benefits is determined by the amount you earn and your tax filing status.
According to the IRS, up to 50% of your SSDI benefits may be taxed if your income is between $25,000 and $34,000. In the case of a person filing under “married filing jointly”, the income limit is between $32,000 and $44,000. If you earn more than $34,000 per year, or $44,000 in the case of “married filing jointly”, up to 85% of your SSDI payments may be taxed.
It should be noted that if you get income from other sources, such as dividends or tax-free interest, or if your spouse generates income, your SSDI benefits may be taxable. It is better to consult a tax expert or an IRS professional to find out whether your SSDI benefits are taxable or not.
9. Rules for Self-Employment to Maintain SSDI Benefits
There are certain criteria in place that affect how much you can earn while getting SSDI benefits if you are self-employed. The SSA defines self-employment as any work done for profit or income that is not performed as a worker or employee of a company.
Although, in 2023, the SGA limit for employees is $1,470 per month, the SSA looks at more than just your earnings. It uses the ‘Countable Income Test (CIT)’ or the ‘Three Tests’ to assess whether your work is considered a significant gainful activity. The SSA utilizes different criteria depending on when you established your company and why your work is being assessed.
If your monthly countable income exceeds $1,470 in 2023, your self-employment will be regarded as SGA, and you won’t be entitled to benefits unless you demonstrate that you do not provide significant services to your company.
The Three Tests
The SSA uses three tests to analyze if your monthly income from your self-employment work is SGA. These three tests:
- Significant services and substantial income test
- Comparability test
- Worth of work test
You will be disqualified for benefits if any of these tests reveal that the job you do for your small business is SGA.
10. Medical Improvement Review Date
The SSA will assess your medical condition on a regular basis to see if you are still eligible for benefits. Therefore, it is crucial to keep up-to-date with your medical improvement review date to prepare in advance.
11. Update Your Medical Records Regularly
It is important to keep your medical records up-to-date in order to keep your SSDI benefits. Check that all of your healthcare data is correct and up-to-date.
12. Consult a Financial Advisor
If you are unsure, even after conducting thorough research, how working will affect your SSDI benefits, it is always advisable to consult a financial advisor. These experts can assist you in understanding the rules and regulations of the program.
Special Rules for Workers Who Are Unable to See (Blind)
There are certain laws and procedures that apply to you if you are blind and receive Social Security benefits.
People who are unable to see can earn up to $2,460 per month without compromising on their benefits in 2023. Furthermore, they are eligible for a disability freeze even if their income exceeds the disability threshold for SSDI benefits.
It means that the SSA will exclude the years in which individuals earned little or no income due to their impairment when calculating future benefits. It can be favorable because the SSA bases benefits on the individuals’ best earnings during their working years.
Losing Your Job
Benefits are unaffected if you lose your employment during a trial work period. Call the SSA if you lose your job during the 36-month extended period of eligibility, and the SSA will reinstate your benefits so long as you continue to be disabled.
Final Words
It is not only challenging to maintain your SSDI benefits while working, but the process is complicated, but it is still achievable, all thanks to the rules and regulations set in place by the SSA.
It is important to understand the salary limitations, report changes in your employment, regularly update the SSA, take advantage of the work incentives offered by the SSA, and keep track of costs to ensure financial stability while working.
Furthermore, remaining up-to-date on tax implications, self-employment requirements, and medical assessments is critical.
Thus, it may be good to consult financial professionals, as they can assist in providing valuable assistance in navigating this complex process and ensuring that you can work while continuing to receive SSDI benefits.
