Many Social Security disability beneficiaries are forced to work while they are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, as the payments from these benefits are usually not enough to make ends meet. But how does that impact their benefits?
The Social Security Administration allows disabled people to earn some money along with their Social Security benefits. However, there are different rules for SSDI and SSI that need to be taken into account before they do so.
In this article, we discuss the possibilities of working while getting Social Security benefits.
SSI and SSDI Overview
The Social Security Administration (SSA) recognizes that monthly disability benefits may fall short of covering necessities like rent, food, and medical expenses. It, therefore, allows recipients of Social Security Disability Insurance and Supplemental Security Income to earn an income up to a maximum limit without losing their benefits.
SSDI and SSI have different rules when it comes to working and receiving benefits at the same time. SSDI functions similarly to an insurance program; it is available to individuals who have paid for it through Social Security taxes.
The Supplemental Security Income program is designed to help those with low incomes and few other resources. It is important to take into account the differences between the two programs before making any decisions about going back to work.
Supplemental Security Income
Unlike SSDI, SSI is available to disabled individuals with little to no work history. The SSI program was launched after the federal government took over state welfare programs for the elderly, blind, and those with other disabilities.
The SSI disability benefits are governed by Title 16 of the Social Security Act and are funded through general revenues rather than the Social Security Trust Fund.
Technical Requirements
It is not necessary to have a specific number of years of employment to qualify for SSI, as is needed for SSDI.
If your annual income and total assets fall below the limits specified for the program, then you are financially eligible to participate in it. In addition to this, applicants are required to provide medical documentation verifying their disability status.
Benefit Amount
The amount of SSI benefits that a qualified person will get depends on how much money they make each month as well as their living arrangements (people receiving SSI may receive a lower benefit amount if they are getting other forms of assistance, such as living with a friend at no cost).
Your benefit amount may also be affected by the state you currently reside in.
In 2023, the highest possible SSI payment from the federal government is $914 (or $1,371 for a married couple). The monthly maximum federal amounts for 2024 are $943 for an eligible individual, $1,415 for an eligible individual with an eligible spouse, and $472 for an essential person.
Start Date
If your application gets approved for Supplemental Security Income, your first payment will be made on the first of the month following the month in which your application was received.
Associated Benefits
People with disabilities who meet the income requirements for SSI are also eligible for Medicaid in the state they live in. Many SSI beneficiaries also automatically qualify for other assistance programs, such as the Supplemental Nutrition Assistance Program (SNAP).
Approval Rate
Women make up a relatively larger proportion of SSI applicants than men because fewer women qualify for SSDI (around 71% of women compared with 79% of men).
In general, women have fewer employment years than men (nearly 60% of men have been employed at least part of each year of their adult life, whereas only 41% of women can claim the same).
Social Security Disability Benefits
SSDI is a federal insurance program that provides financial assistance to disabled workers. The program was established in 1935.
The Social Security Disability Insurance program disburses funds from the Disability Trust Fund within the Social Security Trust Fund. Around 15 cents of every Social Security tax dollar goes toward the Disability Trust Fund.
SSDI is also called Disability Insurance Benefits, or DIB. It is covered under Title 2 of the Social Security Act.
People who receive SSDI are termed “insured” because they have paid into the Social Security trust fund through payroll deductions during the course of their working lives.
Social Security Disability Insurance works in the same way as a retirement plan—so much so that when a beneficiary reaches their full retirement age, their SSDI benefits are automatically converted into retirement benefits.
Technical Requirements
In order to qualify for SSDI benefits, applicants must prove that they are under the age of 65, have a disability that prevents them from working, and have earned sufficient work credits.
Start Date
When someone applies for Social Security Disability Insurance, there is a five-month waiting period before they can start receiving payments. But if the benefits are delayed past the five-month waiting period, the beneficiary may also be eligible for back payments.
Benefit Amount
Your monthly income will be determined by your earnings history, similar to the Social Security retirement benefit. The maximum monthly SSDI benefit is $3,627 in 2023 and $3,822 in 2024.; however, only a small number of recipients actually get this amount.
Associated Benefits
Once a beneficiary has received SSDI benefits for two years, they are automatically enrolled in the Medicare program. However, if you have a condition like ALS or Lou Gehrig’s disease, you may have been enrolled in Medicare since the start date of your SSDI benefits.
SSDI also provides auxiliary benefits based on the primary beneficiary’s record.
These benefits include monthly payments to a beneficiary’s spouse or children. However, disabled children cannot apply for SSDI benefits based on their own records; these benefits are only available to people over the age of 18 who have worked for at least five years.
Approval Rate
On average, the approval rates for SSDI are greater than for SSI. This could be due to a number of factors, some of which are:
In comparison to SSI applicants, those applying for SSDI are more likely to have access to both financial resources and health insurance, which makes it more likely that they will see the doctor regularly for their medical condition.
Whereas for SSI applicants, it may be more difficult to prove their disability, given that they don’t have the resources that allow them access to healthcare.
Judges and claims inspectors tend to favor applicants who have worked for a significant amount of time, whereas SSI applicants are unlikely to have a lengthy work record.
An applicant’s chances of being approved for Social Security Disability Insurance benefits can be increased by hiring a lawyer to represent them at the application or hearing stages.
Can You Work While Collecting SSDI?
There are a number of rules that determine whether or not you are permitted to work while receiving Social Security disability insurance. To begin, you will not qualify for these benefits if you are working above the “substantial gainful activity” (SGA) limit.
In 2023, if you make more than $1,470 or $2,460 (if you’re blind), you’ll be considered to be participating in SGA. The Social Security Administration encourages existing recipients to try to return to work without fear of losing their benefits.
This is done with the help of the Trial Work Period.
A Trial Work Period allows you to work above the set earnings threshold for a total of 9 months within a 60-month period and still receive your benefits. The months don’t need to be consecutive months in the 60-month term.
If your monthly earnings are above the threshold set for the trial work period, that month will count toward your nine-month total. In 2023, this threshold is set at $1,050 but usually increases annually due to the cost-of-living adjustment.
You are also eligible for an Extended Eligibility Period that lasts for 36 months after you’ve finished your nine trial work months. As long as your earnings do not exceed the SGA threshold, you will receive your full benefits during that time.
To determine your eligibility, some expenses, such as those needed to help you continue working despite your disability, may be deducted from your income.
If your earnings exceed the SGA threshold during your extended eligibility period, your benefits will be terminated, and you will be paid in full for that month as well as two further months after your benefits are terminated.
However, even after your benefits are terminated, if your income falls below the SGA within the 36 months of the Extended Eligibility Period, you can contact Social Security to reinstate your benefits.
You will continue to get disability benefits as long as you remain disabled and your income does not exceed the SGA limit.
If your income exceeds the SGA threshold after 36 months, your benefits will be discontinued; however, if your earnings drop below SGA within the first five years after your extended eligibility period, you may be eligible for an expedited re-instatement of your benefits.
It may seem hard to understand these rules, but the main goal of the trial work period is to help you get back to work. You can make sure you do not lose your disability benefits by upholding the rules set by the Social Security Administration and working with an experienced disability benefits lawyer or advocate.
Can You Work While Collecting SSI?
The SSI program also has an SGA threshold similar to that of the SSDI program. Those who are blind are exempt from the SGA limits for SSI eligibility. If you are non-blind and your monthly earnings exceed $1,470, you will be considered to be engaging in SGA.
However, once you have been granted benefits, your SGA status is no longer the most important factor in determining eligibility. Instead, if you start working, your benefits may be reduced depending on how much you make.
In 2023, the highest monthly benefit that you can receive from the SSI program is $914. Note that this does not include any extra state income, which may be available in certain regions.
For the purposes of SSI eligibility, both earned and unearned income are considered countable. Earned income consists of money received from employment, while unearned income includes assistance from loved ones, free meals and housing, and government aid programs like food stamps and unemployment insurance.
However, you can deduct or exclude a portion of your earned and unearned income.
For instance, you can remove the first $20 of unearned income that you get each month. It’s also possible to leave out income that is part of a plan to become self-sufficient, state-funded needs-based aid, certain HUD housing subsidies, and the first $60 of irregular income.
You can deduct the first $65-$85 of your monthly earned income in addition to any of the $20 unearned income. After this deduction, only about 50% of your income is considered to be countable income.
For instance, if you earn $1,085 per month and have no other income, you would subtract $85 and take half the remaining amount, giving you $500 in countable income. Your regular benefit of $914 would be reduced by this amount, leaving you with around $414 each month.
Working While Collecting SSDI: Is It Worth It?
As you learn more about the rules of working while receiving SSDI benefits, you may find yourself wondering whether it is worth it to go back to work.
Getting your Social Security benefits while working has a few upsides. If you have a low-paying job, Social Security benefits can help you increase your overall income, even after the deductions.
And if you manage to work while receiving SSDI benefits until your full retirement age, you will be eligible for full retirement benefits.
The main disadvantage of working while receiving SSDI benefits is that it can significantly reduce your income. Furthermore, the Social Security Administration will withhold a certain amount of your earnings and will only release them once you reach your full retirement age.
If you combine your income with Social Security benefits, you could end up paying more in taxes than if you had only relied on your disability benefits.
Conclusion
SSDI beneficiaries who are unable to make ends meet based on their benefits alone have the option to work while receiving them. But they must do so with caution, as it can reduce or result in the discontinuation of their benefits, depending on which benefits they are receiving.
