Social Security Disability Insurance (SSDI) is a program that aims to financially assist those disabled individuals who are unable to retain employment due to their medical condition. However, it also encourages individuals to return to work through its work incentives.
The Social Security Administration offers a variety of work incentives for its beneficiaries. It includes the Trial to Work Period (TWP), an Extended Period of Eligibility (EPE), Expedited Reinstatement of Benefits (EXR), Plan to Achieve Self-Support (PASS), and more.
Keep reading below as we discuss the different work incentives available to SSDI beneficiaries.
How Does Working Impact Disability Benefits?
The issue of whether you can work while receiving disability benefits is more complex than it may initially appear.
There are certain situations where you can maintain your benefits while also working. If your income is above a specific threshold, you may see a reduction in benefits, or they could even be temporarily or permanently suspended. If you do not want to risk losing any benefits, read up on the regulations that govern your particular case.
An expert in disability benefits legislation can explain when you can return to work, how much money you can make without jeopardizing your benefits, and what steps you can take to work again.
How Much Can You Make on Disability?
The Social Security Administration offers an online benefits calculator for current and prospective beneficiaries. The SSDI eligibility calculator can help you estimate both your present and future monthly benefit amounts.
The Social Security Administration may permit you to participate in a trial work period to evaluate your potential for future gainful employment.
In 2023, The Social Security Administration classifies monthly earnings of $1,470 or more as substantial gainful activity (SGA). This is the maximum amount of income you can have without losing your disability payments. Additionally, a blind person receiving disability benefits can earn no more than $2,460. These monthly earnings can fluctuate or increase annually.
These amounts, known as substantial gainful activity (SGA), considers your work-related costs as well. It rises on average every year and lets you deduct expenses before calculating how much you take home. The following are some possible deductions you can make:
- Co-pays for prescriptions
- Essential counseling services
- Travel to and from the workplace
- Personal caregivers
- Devices to aid mobility, such as wheelchairs
With these and other permissible deductions, the money you make from work can help you live comfortably while you collect disability payments.
With your attorney’s assistance, you can analyze your benefits, employment income, and permitted deductions to make sure your desire to work does not jeopardize your benefits.
Why Is There an Income Limit?
You may be curious about the rationale behind the monthly cap on earnings that SSDI recipients must adhere to in order to continue receiving benefits.
The answer lies in the criteria for the SSDI program. In order to qualify for disability payments, an individual must demonstrate that they are unable to work as a result of an injury, sickness, or impairment.
People who have paid into Social Security for a long time but are suddenly unable to work due to a disability or ailment are eligible to receive benefits under the program. SSDI benefits are designed to help people and their families get by when they are unable to work due to a disability or illness.
Let’s say a recipient’s income is higher than the threshold of SGA or at a level where a TWP would kick in. If a Social Security recipient engages in such types of employment, it may be interpreted as a sign that they have improved to the point where they are no longer disabled and can support themselves financially.
SSDI users who want to work must often limit their hours to avoid the SGA restriction and the subsequent trial work period.
SGA limits for disabled individuals are adjusted annually. The Social Security Administration often adjusts the maximum income by increasing it every year, as they did for the year 2023, to take inflation and other considerations into account.
If you receive SSDI payments, keeping your finances in order and maintaining your eligibility for benefits requires that you stay up to speed on the current additional income restrictions for SSDI beneficiaries.
SSDI Work Incentives
Following are some work incentives that the SSA offers to SSDI beneficiaries.
Trial Work Period (TWP)
Everyone receiving SSDI is eligible for a nine-month trial work period (TWP), during which they can test out the working arena.
During your TWP, you are not required to report any earnings to SSDI, regardless of whether they exceed the SGA standard ($1,470 in 2023, $2,460 if blind).
Your TWP consists of nine months of trial work spread out over a period of five years. Your nine months of trial employment can take place at any time within the five-year period, consecutive or not.
This opportunity will remain open until all nine of your trial work months are finished. Your SSDI payments will remain unaffected by whatever income you may make throughout your TWP.
Extended Period of Eligibility (EPE)
Once your nine-month trial work period has finished, you will enter your three-year Extended Period of Eligibility (EPE).
Your SSDI payments will continue if your gross monthly earnings are less than the SGA maximum.
While calculating your Social Security benefits, Social Security may disregard some of your income by considering it as a deduction when you are within your EPE or expedited reinstatement (EXR).
Taking advantage of these deductions can reduce your taxable income down below the SGA threshold, thus preserving your eligibility for SSDI payments despite continued employment. Impairment Related Work Expenses, also known as IRWEs, and subsidies are the two types of deductions that are taken the most frequently.
When you first earn more than the SGA limit in a given month while you are in your EPE, your three-month grace period will begin.
You will continue to receive cash benefits from SSDI during the grace period, regardless of the amount of income you bring in during that time. After the conclusion of your grace period, your SSDI benefits will be reduced to $0 for every month in which your earnings are greater than the SGA maximum.
When your three-year EPE expires, you can keep receiving SSDI payments as long as your income does not exceed the SGA threshold.
If you are currently earning more than the SGA limit but your income decreases below the SGA limit in the future, you will be eligible for SSDI again. In the next section discussing expedited reinstatement of benefits, I’ll elaborate on what happens once the EPE expires.
Expedited Reinstatement of Benefits (EXR)
If you are earning over the SGA limit and have exhausted both the trial work period and extending the period of eligibility, your SSDI payments will be terminated.
If your income goes below the SGA limit, you may qualify for up to six months of interim SSDI cash payments through expedited reinstatement (EXR).
After six months, Social Security will reevaluate your condition to ensure you still qualify as disabled. If you do, you can resume receiving benefits immediately without filing a new application.
If it is determined that you do not meet the criteria for disability, SSDI benefits will be terminated. If you need clarification, ask a Work Incentive Consultant about expedited reinstatement.
Deductions
There are strategies to reduce your gross monthly earnings throughout your extended period of eligibility and expedited reinstatement, so Social Security will only recognize a portion of your income.
This is referred to as “deductions.” We’ll go over the most popular ways to reduce your monthly earnings below the SGA level, which allows you to keep working while still receiving your SSDI payments.
Please be aware that you will not be able to take advantage of these deductions during your TWP.
Impairment Related Work Expenses (IRWEs)
Impairment-Related Work Expenses (IRWEs) are the costs that you bear on your own that are associated with your impairment and that are necessary for your employment.
When determining your income, Social Security won’t consider any money you earn outside of Social Security that goes toward paying for things that fall into this category. Examples of IRWEs include:
- Prescription drug costs
- The cost of a personal care attendant
- Additional travel expenses
Items you intend to count as IRWEs are subject to approval by Social Security. You can submit a form to the Social Security Administration in order to request authorization for your IRWEs. If your IRWEs are accepted, Social Security will subtract the amount from your income when determining whether you are engaging in SGA and whether you are eligible for SSI benefits. This improves your chances of keeping your SSDI payments.
Subsidies and Special Conditions
Workplace subsidies and special conditions are forms of assistance that can increase your earnings beyond the market rate for your services.
Employer subsidies are one type of assistance, whereas special conditions are typically provided by third parties like vocational rehabilitation agencies.
When determining if someone is engaged in SGA, Social Security considers any subsidies or other extenuating circumstances. Earnings that accurately reflect the value of your job are the only ones considered when determining whether your salary exceeds the SGA cap.
If Social Security determines that you qualify for a subsidy or have other extenuating circumstances, you will be able to increase your income without losing your benefit level.
There may be subsidies or other special conditions if the following criteria are met:
- You’re being supervised more closely than similarly employed people at other companies.
- When compared to other people in your position, you either have less work to do or easier work to perform.
- A mentor or coach at work is assisting you in certain tasks.
Contact Social Security if you believe you are eligible for a subsidy. They might require you to provide proof of subsidy eligibility, such as a note from your employer. Your mentor/job coach may also be able to assist you in determining what information you will need to provide if you believe you might qualify for special conditions.
Unincurred Business Expenses (Self-Employment)
Contributions from others to a business at which you are self-employed are known as “Unincurred Business Expenses.” The following are some examples:
- Volunteer assistance from a friend
- Funding from a government body to help with business costs
- Someone providing you with anything of value, like a place to work, without charging you for it
When calculating whether your monthly income exceeds the SGA threshold, Social Security subtracts the cost of any business expenditures from your total income. In order to determine the worth of any future business costs, Social Security employs fair market value.
Plan to Achieve Self-Support (PASS)
People who are eligible for SSI can participate in a savings program called a Plan to Achieve Self-Support (PASS), which enables them to put money away toward a professional objective.
The Social Security Administration does not consider PASS savings or withdrawals to be resources or income for the purposes of SSI eligibility.
If you are receiving SSDI payments, it will only be beneficial to you if you are also receiving SSI benefits or if you would be eligible for SSI benefits if you invested part of your payments into a PASS.
Continued Payment
If you are enrolled in a vocational rehabilitation program that is recognized by Social Security and is designed to help you become self-sufficient, you can keep receiving SSDI payments even if you no longer fulfill Social Security’s criteria for disability.
Conclusion
If you are unsure of your capacity to get back into the job market, then the SSDI work incentive is a great way of testing the waters while still retaining your disability benefits. Consider talking to a disability attorney to decide if this is the best course of action for you.
