Many people nearing retirement age often find themselves unable to continue working due to a disability. In such cases, they consider applying for Social Security Disability Insurance (SSDI). But can one get SSDI along with retirement pensions?
Yes, it is possible to receive Social Security Disability Insurance benefits along with retirement pensions, but there are some important considerations to keep in mind. When you reach Full Retirement Age (FRA), you cannot receive both full SSDI benefits and full retirement benefits simultaneously.
Read below to learn more about how SSDI and retirement pensions work together.
Can You Get Both SSDI and Retirement Pensions?
The Social Security Disability Insurance program is not based on an individual’s level of financial need but rather on whether a person is unable to work due to a disability.
Although you can receive both SSDI benefits and your retirement pension, your pension can potentially affect your SSDI benefits. The impact of your pension on SSDI depends on whether your pension is based on work that is covered by Social Security or not.
Pension Based on Social Security-Covered Work:
If your pension is based on work for which you paid Social Security taxes, it may not affect your SSDI benefits.
This is because Social Security uses a concept called the “Windfall Elimination Provision” (WEP) to adjust benefits for individuals who receive pensions from non-Social Security-covered employment. However, this provision does not apply if your pension is based on work that was covered by Social Security.
Pension Not Based on Social Security-Covered Work:
If your pension is based on work that was not covered by Social Security (for example, certain government jobs), it could potentially lead to a reduction in your SSDI benefits.
The reduction is governed by the Government Pension Offset (GPO) rule. Under GPO, if you receive a pension from a government job where you did not pay Social Security taxes, your SSDI spousal or survivor benefits may be reduced.
Retirees from certain state and local governments, as well as federal employees appointed before 1984, when the civil service in the United States came under the Social Security system, are the most likely to be affected by the WEP.
In a similar vein, the GPO applies to spouses, widows, and widowers who are receiving Social Security spousal or survivor benefits along with a pension from a federal, state, or local government job that did not contribute to Social Security taxes.
These individuals have their benefits cut down by two-thirds, or if the two-thirds are greater than their SSDI payment, the benefits get terminated.
Can You Get SSI and a Pension at the Same Time?
It’s important to note that Supplemental Security Income (SSI) is different from SSDI, and it is not affected by pensions or other government benefits. SSI is a need-based program, and eligibility is determined by a person’s income and resources.
As a pension is an asset, it may change whether or not you are eligible to receive SSI and in what amount. Because of the nature of SSI as a needs-based program, assistance is given first to those who truly need it.
Qualifying for SSDI While Receiving a Pension
There is no reason why your extra unearned income would keep you from getting SSDI benefits. There are, however, strict requirements that must be met before you can receive these benefits.
In this section, we will talk about how factors like your work history, income, and medical condition all play into your ability to receive Social Security Disability Insurance benefits.
Work Credit Requirements for SSDI
To qualify for SSDI, you need to have earned a certain number of work credits, which are determined by your age and length of employment history. You can earn a maximum of four work credits per year. The specific dollar amount needed for one work credit may change annually, so it’s important to check the latest figures on the SSA’s website.
The number of work credits required to qualify for SSDI depends on your age at the time you become disabled. In general, you need a certain number of work credits, and you must have earned some of these credits recently.
Income Limits for SSDI
There is a limit on how much money a person can make in a given month if they are receiving SSDI benefits. Earnings must fall under the substantial gainful activity limit to qualify for SSDI. The SSA revises and updates this limit on an annual basis.
In 2023, the SGA limit is $1,470. This only includes income earned from employment as well as self-employment. However, self-employed individuals must also fulfill other criteria to be eligible for SSDI. The purpose of this limit is not to restrict your financial resources but rather to ensure that you are unable to work due to your disability.
Qualifying Disabilities
The most difficult requirement for Social Security Disability Insurance is proof of a severe disability that prevents you from working. The Social Security Administration provides detailed lists of disabilities that meet the agency’s strict criteria for determining a claimant’s inability to work.
Furthermore, applicants are only accepted if their medical records, treatment notes, laboratory and clinical results, and imaging scans clearly demonstrate that their disability leaves them with minimal to no functional capacity.
In most cases, this means they are no longer able to perform the duties of their previous position, any position for which they are qualified, or even low-skilled work.
You’ll need a lot of proof before the Social Security Administration will recognize your condition as an impairment.
Can I Receive Social Security Disability and Retirement Benefits?
It’s impossible to receive Social Security Disability Insurance and retirement benefits simultaneously. If you apply for and are approved for SSDI benefits, you will receive the same amount each month as you would have at full retirement age. This amount is calculated through a complex formula involving your Average Indexed Monthly Earnings (AIME).
If you have already begun receiving retirement benefits, you will not be eligible for disability benefits. Nevertheless, if you obtained early retirement and can prove that you did so because of a qualifying disability, you may be eligible to receive the difference between your full retirement benefit and the early retirement benefit.
Conclusion
To sum it up, it is possible to receive both a pension and SSDI benefits as long as the pension contributes to Social Security taxes. Otherwise, your SSDI benefits would be subject to a significant reduction.
