The U.S. Social Security Administration provides resources to individuals and families in need through various benefit programs. Persons with severe physical or mental health conditions can receive monthly disability payments through Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), for example, so long as they can satisfy the designated eligibility requirements.
To be eligible for benefits under either program, applicants must first establish that they are disabled. Under Social Security regulations, a person is not disabled unless their health significantly limits their ability to perform basic job functions for one year or longer. Applicants who are working and earning more than a certain amount each month are engaging in “Substantial Gainful Activity” and will not be eligible, as their earnings show their ability to work despite the limitations of their physical or mental health. In 2021, a person is engaging in substantial gainful activity if their monthly wages equal $1301 or higher.
Individuals who meet the above requirements and are therefore considered disabled will not always qualify for monthly disability payments, though. To receive benefits through SSDI, an applicant’s recent work history must be of a particular nature and duration. If it’s not, they may be able to receive SSI benefits, but only if their monthly income and assets fall below applicable limits.
Such eligibility criteria are important, as they help the Social Security Administration identify which applicants are truly disabled and in need of assistance. However, some income-based restrictions can have unintended consequences when current beneficiaries are interested in joining the workforce if their condition improves. Though working would increase their income, confidence, and general life satisfaction, many beneficiaries are afraid to do so for fear that their condition will return or worsen, forcing them to quit their job and being left without income from wages or disability benefits.
To address these concerns and to encourage capable persons to work, the Social Security Act makes exceptions to some eligibility requirements for SSDI and SSI. These exceptions are referred to as work incentives, as they minimize the risks involved in trying to work while on disability.
The income-based restrictions on eligibility for both SSDI and SSI are detailed below. If you currently receive benefits under either program and are interested in looking for employment, review the restrictions applicable to you and consider how the applicable work incentives can help you try to work with reduced risk of losing benefits or eligibility.
Work & SSDI
As stated above, persons who earn $1,301 or more each month in wages are engaged in substantial gainful activity and are not considered disabled for purposes of receiving Social Security benefits. While this restriction applies to the initial eligibility determination of all applicants, it is only an ongoing restriction for those determined to be disabled and entitled to disability benefits through SSDI.
- Trial Work Program (TWP): Under TWP, those receiving SSDI will continue to receive monthly payments for anywhere between 9 months to 5 years while they try to decide whether they can return to work full-time. The trial period will last until the individual’s monthly earnings reach or exceed a designated amount for a total of 9 months, whether consecutive or staggered. Currently, a month is counted if the TWP participant earns at least $940, or is self- employed and works more than 80 hours.
- Extended Period of Eligibility (EPE): This period is an extension of the TWP, and lasts 36-months from the end of an individual’s trial work period. In any month during this period where the individual earns less than the designated SGA amount, they will be paid their monthly SSDI amount. If the individual is already earning the SGA amount when the period begins, they will still receive their SSDI payment for that month and for the two months that follow.
Work & SSI
Applicants who are determined to be disabled but who lack the requisite work history to qualify for SSDI may receive SSI if their countable income is lower than the current federal benefit rate (FBR). In 2021, the rate for individuals is $794/month, while the rate for persons living with a spouse is $1191/month. The types of income that count towards this limit include wages and earnings, benefit payments, and free food and rent.
- Earned Income Exclusions: The first $65 of income from earnings or wages is deducted from an individual’s countable income for that month, as well as half of any earnings or wages above this amount. Further, the first $20 of any other type of countable income they receive that month will be deducted as well. If the recipient Recipients that live with their spouse may have to account for their income even if their spouse is ineligible, depending on how much their spouse earns in a month. If the spouse earns more than the difference between the individual FBR and the FBR for couples, their income will be counted. The same earned income exclusions apply, though, and their income limit will be the higher FBR that applies to couples.
In practice, these rules and exceptions allow recipients who work but have no other countable income to remain eligible for SSI even while working and earning an income more than two times greater than the applicable FBR. However, any amount of earned income that is not excluded will be deducted from the maximum payment available from SSI-up to $794 for single recipients, and as much as $1191 for those who are married.
Additional Work Incentives (SSDI or SSI)
- Expedited Reinstatement: Individuals who lost eligibility due to an increase in earnings or income that later become unable to work because of their condition may request reinstatement of their benefits without re-filing. Once such request is submitted, an individual can receive temporary benefits for up to 6 months while the SSA approves and processes the reinstatement. This right expires five years after the initial loss of eligibility.
- Impairment-Related Work Expenses: Individuals who require impairment-related accommodations to work may deduct any related expenses from their total earnings or wages.