Special Monthly Income Limit Rule For The First Year
Many people who retire mid-year have already earned more income than the limit allows. This is why there is a special rule where the earnings limit switches from an annual limit to a monthly limit.
This rule allows you to receive a check for any month you are considered retired by the SSA even if you have already exceeded the annual earnings limit.
That sounds straightforward enough but the interpretation of retired as defined by the SSA can cause some confusion. Heres what they mean by this term:
You are retired if your monthly earnings are 1/12 of the annual limit or less and you did not perform substantial services in self-employment.
Essentially, you are considered retired unless you make more than the income limit. The rule for the year you reach full retirement age also applies when working with the monthly limit. In this calendar year for 2021, the limit is $4,210 .
Its very important to remember that in the year following this first year, the monthly limit is no longer used and the earnings limit is based solely on your annual earnings limit.
Maximum Monthly Income Changes
The 2021 income limit for those receiving SSDI benefits was $1,310 per month. That is what the Social Security Administration set as the income level above which iS considered a worker not disabled. The exceptions to that rule are explained below in this blog article. That level of monthly income was the maximum amount of countable income a recipient could receive unless they were blind. Blind applicants are permitted to earn more due to their special disability their income cap is $2,190 per month in 2021.
The new year brings an entirely new set of limits because the income caps and benefit amounts need to be adjusted to keep up with the rate of inflation seen during the previous year.
The new 2022 SSD monthly income limit is $1,350 for benefit recipients with vision and $2,260 for blind SSD recipients.
- 2021 Maximum Allowable Earned Income Drawing SSD Benefits = $1,310 per month.
- The blind SSD benefits recipients earning limit is $2,190 per month.
- 2022 Maximum Allowable Earned Income Drawing SSD Benefits = $1,350 per month.
- The blind SSD benefits recipients earning limit will be $2,260 per month.
How Much Can You Work While Receiving Ssi Disability Benefits
Qualifying for disability, or Supplemental Security Income is a process that is already a difficult one, and many who have qualified already still feel the need to work at least part-time, whether that to be for need-fulfillment or to supplement their income. Many who wish to do so, find themselves fearful of losing their SSI benefits, especially if they are concerned that they cannot sustain their work long-term. Here we address how much someone can work before it comes into conflict with SSI benefits.
When it comes to receiving SSI for a disability, the Social Security Administration , is going to base their aid given off of what is referred to as substantial gainful activity. While SSDI and certain disabilities such as blindness can alter the equation, substantial gainful activity, means you are working and making a sum total greater than $1,130 a month as of the year 2016. To apply for benefits, you cannot be making more than that amount, and in most cases there are trial work periods where you can make greater amounts than normal without losing benefits. From there, it is necessary to know and understand how the benefits of your SSI are figured in order to see how much you can work. As of 2016, the SSA will pay an amount up to $733 for your SSI benefits which is calculated by the federal benefit rate , which is weighed against your countable income each month. Your countable income is comprised of these sources:
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What To Do If Your Benefits Are Already Being Withheld
If youre subject to the Social Security earnings limit, dont wait for the SSA to start reducing the benefit you receive. Instead, Id recommend voluntarily suspending benefits.
If you wait for the Social Security Administration to discover that youve earned too much working while receiving benefits, your risk of an overpayment notice is higher.
Either way, you arent missing payments that youll never get back. Your benefit amount will be recalculated at your full retirement age to reflect the months that benefits were withheld.
The best way to avoid the earnings limitation is to wait until full retirement age to file for benefits. If you cant wait, make sure you have a clear understanding of how working impacts your Social Security benefits.
If you still have questions, you could leave a comment below, but what may be an even greater help is to join my . Its very active and has some really smart people who love to answer any questions you may have about Social Security. From time to time Ill even drop in to add my thoughts, too.
You should also consider joining the 295,000+ subscribers on my YouTube channel! For visual learners , this is where I break down the complex rules and help you figure out how to use them to your advantage.
What Happens When Your Nine
If you participate in the Trial Work Period Program , at some point you will use up your nine months of unlimited income while still receiving your full SSDI benefits. What then?
The Extended Period of Eligibility When you exhaust your nine TWP months, the SSA wants to give you the incentive to continue working if you can. The Extended Period of Eligibility is a 36-month period in which you have an income safety net.
Each month, the SSA checks your reported income to see if you exceeded the monthly income cap that is substantial gainful activity . If you do exceed the SGA level, you will continue to receive your full SSD benefit during a 3-month grace period. After that, your SSD benefit payment will be suspended for any month your income is above the SGA.
But, if during the 36-month safety net period your earnings again fall below the SGA level, your SSD benefit payments will resume for each such month.
Clauson Law has focused on representing the injured and disabled for over 10 years. We have handled thousands of cases. Each client is important to us and has a unique situation.
How To Qualify For Ssi Benefits
You can get Social Security Disability benefits even if you do not have enough work credits to qualify for SSDI. The SSA offers the SSI program to disabled adults and children who have limited financial resources. It is a safety net so that people who cannot work for a living but do not qualify to collect SSDI can pay for essential items, like food, clothing, and shelter.
To qualify, you have to meet the same medical disability standards as a person does for SSDI. In addition, your income must be low, and your countable assets cannot exceed certain limits. Specifically, you could qualify for SSI benefits if:
- You have a severe illness or injury that meets the benchmarks of the SSAs Listing of Impairments, also called the Blue Book.
- Your disability prevents you from supporting yourself through gainful employment.
- You have very little income. This income limit can change every year. In addition, the income limit tends to vary by location because SSI is a joint program of the federal and state governments.
- Your countable assets do not exceed the SSI limit. This number can also change every year. Your home and the land it is on do not count as assets. Most cars also do not count toward your resources.
You must satisfy all of these elements to be eligible for SSI benefits. If you are struggling to understand the qualifications for SSDI or SSI, our firm can help you navigate these matters and apply for the benefits you may be entitled to because of your medical condition.
You Can Test Out Your Ability To Work While Collecting Social Security Disability Without Losing Your Benefits
By Aaron Hotfelder, J.D., University of Missouri School of Law
Some recipients of Social Security disability insurance are hesitant to work because they’re unsure how it will affect their disability payments. While this reluctance is understandable, Social Security has special rules that allow people to continue to receive their full monthly benefit while trying out a part-time or even full-time job. Understanding these rules before seeking employment will help you make sure you’re not jeopardizing needed disability payments.
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Employment: Social Security Disability Work Incentives At A Glance
SSDI WORK INCENTIVES
Trial Work Period – The trial work period allows you to test your ability to work for at least nine months. During your trial work period, you will receive your full Social Security benefits regardless of how much you are earning as long as you report your work activity and you continue to have a disabling impairment. In 2021, a trial work month is any month in which your total earnings are $940 or more, or, if you are self employed, you earn more than $940 or spend more than 80 hours in your own business. The trial work period continues until you have worked nine months within a 60-month period.
Extended Period of Eligibility – After your trial work period, you have 36 months during which you can work and still receive benefits for any month your earnings are not substantial. In 2021, earnings of $1,310 or more are considered substantial. No new application or disability decision is needed for you to receive a Social Security disability benefit during this period.
Expedited Reinstatement – After your benefits stop because your earnings are substantial, you have five years during which you may ask Social Security to start your benefits immediately if you find yourself unable to continue working because of your condition. ou will not have to file a new disability application, and you will not have to wait for your benefits to start while your medical condition is being reviewed to make sure you are still disabled.
Will Your Claim Be Denied Due To Sga
Individuals who work and earn gross monthly income exceeding the SGA threshold are not considered disabled and are ineligible to receive benefits, unless they were working under one of special circumstances discussed above. Generally, if you are making over $1,310 when you apply, your claim will be denied almost immediately, without a medical review , because how much you are earning is one of the first things the SSA looks at.
If, however, it is determined that your work activity does not amount to substantial gainful activity, you will have passed the first step of the SSAs five-step evaluation process and your medical eligibility will be considered at the next step of the process.
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Additional Factors That Affect Ssdi
For some SSDI recipients, there are other considerations that may impact the number of monthly benefits, including:
- Substantial Gainful Activity :Your SGA is the amount of money you can earn despite your disability. The SGA level for 2019 is $1,220 for most disabilities and $2,040 for those who are blind. If you make more than this amount per month, you arent eligible to receive SSDI benefits. Theres a sliding scale for recipients who earn some amount under the SGA level.
- Payments from Other Disability-Related Sources: If you receive any form of government disability benefits, including workers compensation or state disability benefits, these amounts may reduce your SSDI benefits. However, the amount is not affected if you receive VA benefits or have disability coverage through a private insurance company.
- SSDI Backpay: For some applicants, there is some time lag between the application date and the date of onset the date the SSA determines that your disability began. You may qualify for back pay during this time, which could increase the amount of SSDI benefits you receive.
The Ssa Giveth And The Ssa Taketh Away
Getting approved for benefits had come as such a relief. James had heard horror stories of how it takes some applicants months or even years to get approved.
He qualified for benefits because his condition is permanent. It affects his speech and fine motor skills. He says those deficits, combined with the stereotypes about people with disabilities, have left him unable to secure a full-time job despite having a masters degree in instructional technology.
If you receive SSI or SSDI, did not file taxes in 2019 and did not receive a stimulus check this year, you can still use the IRS Non-Filer Tool until Nov. 21, 2020.
So James does gig work because not working at all goes against his nature. Thats not who I am, he says.
But navigating Social Securitys work-related rules is very, very frustrating.
Disability benefits experts say discrimination, confusion regarding the rules and fear of benefits being cut at any time are all too common. And thats despite the official Social Security position that people on disability should work to their fullest potential.
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How You Earn Work Credits
You earn one work credit for every three-month block that you work a job that pays into Social Security. You buy into Social Security through payroll taxes. For the year 2020, the SSA says that you must earn at least $1,410 per quarter to earn a single work credit, and $5,640 in a year to earn four work credits.
For example, a person who works 30 years at qualifying jobs could earn up to 120 work credits. Note that the number of credits you have beyond the requirement does not affect the amount of benefits you receive through this program.
How Much Can I Make Without Losing Ssi
However, the SSA excludes a persons first $85 in monthly earned income. Furthermore, SSI beneficiaries under age 22 or enrolled in school or a vocational training program can earn up to $1,900 in monthly income, up to $7,670 annually without jeopardizing their SSI benefit or eligibility.
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What Happens If You Engage In Sga While Receiving Ssdi Benefits
If you are approved for SSDI benefits, you are required to notify the SSA of any changes to your employment. This includes:
- Starting or stopping work
- Hour changes
- Duty changes
Why does the SSA need to know this employment information? If you start working after being approved for SSDI benefits, you may no longer be eligible if you earn more than $1,260 per month from your work. This is because the SSA would no longer consider you disabled since you are performing enough work to earn more than the SGA monthly limit, which is $1,260.
If you return to work and earn less than $1,260 per month, the SSA would not consider your work to be SGA. Therefore, you would not lose your benefits as a result of your decision to return to work.
Fact #: Social Security Provides A Foundation Of Retirement Protection For Nearly Every American And Its Benefits Are Not Means
97% of the elderly either receive Social Security or will receive it.
Almost all workers participate in Social Security by making payroll tax contributions, and almost all elderly Americans receive Social Security benefits. In fact, 97 percent of the elderly either receive Social Security or will receive it, according to Social Security Administration estimates. The near-universality of Social Security brings many important advantages.
Social Security provides a foundation of retirement protection for people at all earnings levels. It encourages private pensions and personal saving because it isnt means-tested in other words, it doesnt reduce or deny benefits to people whose income or assets exceed a certain level. Social Security provides a higher annual payout than private retirement annuities per dollar contributed because its risk pool is not limited to those who expect to live a long time, no funds leak out in lump-sum payments or bequests, and its administrative costs are much lower.
Indeed, universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.6 percent of annual benefits, far below the percentages for private retirement annuities. Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.
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Pittsburgh Public Schools Passes A 3% Property Tax Increase As Budget Cuts Loom Next Year
This was 2010. Eighteen years after my college graduation, I hit my salary peak, bringing in net pay of close to $2,100 per month, or around $25 per hour. I felt like I was making headway in spite of student loans and health insurance costs. I was working hard and living with a degree of frugality.
Then everything changed.
In 2010, my disability forced me to permanently stop working full-time. I utilized my short and long-term benefits, then was approved for SSDI.
After Medicare and student loan costs, I was bringing home a little under $1,000 per month in 2011. Fast forward to 2020, and I have a net monthly payment of $1,018 per month. Almost 30 years after those first regular paychecks vis a vis my graduate school stipend, Im earning the same literal amount of money before adjusting for inflation. It is almost as if those intervening years didnt happen, that my work and educational accomplishments, my volunteer time, and my other contributions to the community had no impact on my real worth.
After finishing this essay, Ive learned that even that modest amount is threatened. The federal government just informed me that my benefits have been canceled, without offering an explanation. I have 60 days to appeal.
It is a classic case of how our value as neighbors, citizens and human beings is determined by our net worth, not our humanity.