Increased payments to Social Security recipients began in January 2024, while increased payments to SSI recipients were included in their checks or deposits on December 29, 2023. Other numbers regarding eligibility for disability and average benefits have also changed for 2024.
While the exact Social Security retirement and disability benefit amount that a person can receive depends on their lifetime earnings, here are the average SSDI payment amounts for 2024:
The maximum Social Security retirement benefit that can be collected at full retirement age, and the maximum SSDI benefit for 2024, is $3,822 per month, though few people (only very high-earners) are able to collect this amount.
SSDI payments depend on your average earnings over the 35 years during which you had the highest income, if you worked for 35 years.
Social Security will average your earnings over these 35 years to come up with your "average indexed monthly earnings" (AIME). The agency then takes certain percentages of your AIME (called bend points) to come up with your primary insurance amount.
In 2024, the bend points are:
For details on the calculations, see our article on how much you'll get in SSDI.
The new SSI disability amount in 2024 is $943 per month for an individual and $1,415 per month for a couple (up from $914 and $1,371 in 2023). The SSI payment amounts are higher in states that pay a supplementary SSI payment, but there is no maximum SSI payment in these states. In a state that doesn't pay state supplemental payments, the SSI maximum amount is $943 (the same as the federal base rate).
Most SSI recipients, however, receive less than the federal base rate because of income or free room and board.
Learn more about how much you can get in SSI.
Social Security attorneys (which the SSA calls "representatives") can charge a fee of 25% of the back pay awarded to a client, up to a maximum amount. In 2024, the maximum fee is $7,200, but disability applicants typically pay no more than half that amount.
An applicant for disability benefits through the Social Security disability insurance (SSDI) or SSI programs must be making less than $1,550 per month (up from $1,470 per month in 2023) to qualify for benefits. Blind applicants can make up to $2,590 per month (up from $2,460 per month in 2023). Anyone working above those limits is considered to be doing "substantial gainful activity" (SGA).
People who are currently receiving SSDI and who attempt to return to work can make more than that during a trial work program. SSDI recipients can get up to nine months of trial work. A month counts as a trial work period month when an SSDI recipient makes more than $1,110 per month (up from $1,050 per month in 2023).
After the trial work period is over, you won't get an SSDI benefit in any month you make over $1,550.
Learn more about trial work and how much you can earn on SSDI.
For people who are receiving SSI, the new federal income limit for SSI is $943 per month, but complicated rules govern what income is countable and what income is not. Over half of the income made by an SSI recipient isn't counted toward the limit, so you can actually receive SSI until you make up to $1,970 per month in 2024 (if you have no other income).
But any income you receive between $0 and $1,970 will reduce your monthly benefit. (For instance, if you earn $1,225 a month and have no other income, the reduction for countable income will be $570, and you'll receive only $373 in your SSI check.) To learn how the SSA calculates the reduced benefit, see our article on countable income for SSI. In some states that make extra payments to SSI recipients, the income limit for SSI recipients may be higher.
The income exclusion amount for students receiving SSI is now $2,290 per month (up to an annual limit of $9,230).
Learn more about SSI and working.
If you collect early retirement benefits but continue to work, Social Security will reduce your benefits if you make over $22,320 per year ($1,860 per month) in 2024. But during the year you reach full retirement age, you can make up to $4,960 per month without having retirement benefits taken away. (After you reach full retirement age on your birthday, your benefits aren't reduced at all, regardless of the amount of work or earnings.)
Any early retirement benefits that Social Security deducted while you were working are added back to your retirement check over the next 10 to 15 years.
Learn more about the penalty for working while collecting retirement benefits.
The maximum amount of earnings that is subject to the Social Security tax is $168,600 in 2024, up from $160,200 in 2023. There is no limit to the amount of income subject to the Medicare tax.
Updated March 18, 2024
]]>Here's how it works. If you're married and you file jointly, and you and your spouse have more than $32,000 per year in income (including half of your SSDI benefits), a portion of your SSDI benefits will be subject to tax.
If you're single and you have more than $25,000 in income per year (including half of your SSDI benefits), a portion of your SSDI benefits will be subject to tax.
How big a portion of your SSDI benefits is subject to tax depends on how high your income is. Here's a chart with monthly income amounts that tells you whether your SSDI benefits will be taxed and the maximum amount of SSDI that could be taxed.
If you have over $2,083 in income per month, calculating the actual amount of SSDI benefits that will be taxed can be quite complicated. You can make the calculations on the IRS Form 1040 tax return or you can use Social Security's tax calculator.
SSDI Taxes for Individuals |
||
Amount of Monthly Income |
Amount of Annual Income |
Maximum Portion of SSDI to Be Taxed |
0 - $2,083 |
0 - $25,000 |
0% |
$2,084 - $2,833 |
$25,000 - $34,000 |
50% |
$2,834 and up |
over $25,000 |
85% |
SSDI Taxes for Couples |
||
Amount of Monthly Income |
Amount of Annual Income |
Maximum Portion of SSDI to Be Taxed |
0 - $2,666 |
0 - $32,000 |
0% |
$2,667 - $3,666 |
$32,000 - $44,000 |
50% |
$3,667 and up |
over $44,000 |
85% |
Keep in mind that, if your disability benefits are subject to taxation, they'll be taxed at your personal income tax rate. In other words, your tax rate would not be 50% or 85% of your benefits; your tax rate would probably be more like 15-25% of your benefits.
Those with higher incomes (where 85% of your benefits would be taxed) might pay a tax of 28% on their benefits. The tax rate is the same used for your other personal income.
Large lump-sum payments of back payments of SSDI (payments of benefits for the months you were disabled but not yet approved for benefits) can bump your income up for the year in which you receive them, which can cause you to pay a bigger chunk of your backpay in taxes than you should have to.
To avoid losing part of your backpay this way, the IRS allows you to apply the SSDI benefits that Social Security owed from a prior year to prior tax returns, lowering your income for the year you actually receive the lump sum.
For example, if you were entitled to disability benefits for 22 months before you received your back pay, you could amend your tax returns for two prior years to claim some of the income in those years instead of the current year.
You should ask a lawyer or CPA for help if you want part of your back pay to count for a prior year; it's complicated. For more information, read our partner's article on how Social Security disability back pay is taxed.
Most states don't tax Social Security disability benefits. The following states, however, do tax disability benefits in some situations.
Some of these states use the same income brackets as the federal government (discussed above) to tax SSDI benefits, but most have their own systems. To find out how your state taxes SSDI benefits, see our sister website's article on state taxation of SSDI benefits.
Updated May 3, 2023
]]>If you started working and earning above the substantial gainful activity level when you were receiving Social Security disability insurance (SSDI), and you continued working after your nine months of trial work period, Social Security terminated your payments. If your earnings fall below the substantial gainful activity (SGA) level again within five years of when your SSDI benefits were stopped, you can get your benefits restarted without reapplying through expedited reinstatement. In 2024, the SGA level is $1,550 (or $2,590 for blind people).
To qualify for expedited reinstatement, you must have stopped working (or stopped working as much) because of the same disability for which you originally received SSDI benefits (or in some cases, a closely related disability). Also, your medical condition must not be better than when you originally applied for SSDI.
If you lost benefits because you started working while collecting SSI and your income went above the SSI income limit, your SSI payments stopped. If your income dips below the SSI income limit again within five years of when your SSI stopped, because you stop working, or stop working as much, due to your medical condition, you can get your benefits restarted without reapplying. If you meet all of the following criteria, you may have your benefits restarted without having to apply again. To qualify, all of the following must be true:
When you apply for expedited reinstatement of your benefits, your application has to go to Disability Determination Services (DDS), which can take a while. Fortunately, Social Security will pay you benefits for up to six months while you are waiting for an answer on your EXR. Even if your application for expedited reinstatement is denied, you get to keep the benefits Social Security paid you while your application was pending. In addition, while you wait for a decision, you'll be covered by Medicare (for SSDI recipients) or Medicaid (for SSI recipients). If your request is denied, your Medicare or Medicaid will stop.
If your request for expedited reinstatement is denied, you have 60 days from the date you receive your denial letter to file a Request for Reconsideration. DDS will reconsider your application to see if it made a mistake.
If your Request for Reconsideration is denied, you have sixty days to request for a hearing in front of an administrative law judge (ALJ). This appeal process is very similar to the appeal process for initial disability applications. See Nolo's section on Social Security disability appeals for more information.
Updated December 20, 2023
]]>Because Social Security's definition of disability includes an inability to work due to medical impairments, working while receiving disability can raise red flags with Social Security.
Individuals receiving SSDI are allowed one nine-month trial work period (TWP) to experiment with working while still drawing their full monthly benefits. In 2024, monthly earnings over $1,110 will trigger a trial work period month. The nine months occur over a 60-month period, but the months need not be consecutive. Once you've exhausted the nine months of your TWP, you will no longer receive disability benefits for any month you earn over the Substantial Gainful Activity threshold ($1,550 in 2024). (Be sure you're clear on the details regarding trial work periods before you begin working.)
Recipients of SSI will lose benefits if their income or assets exceed the SSI eligibility thresholds. In 2024, the limit is $943 per month for countable income, while the limit for assets is $2,000. Not all income from work counts toward the income limit, however (in fact, the SSA ignores more than half of your wages when counting your income). But some "in-kind" income, like free housing or food, does count against the limit, and keep in mind that some portion of spousal income and resources will be "deemed" to the SSI beneficiary. (Learn more about income limits and SSI.)
If you experience medical improvement that would allow you to go back to work, Social Security may decide to terminate your disability benefits. The SSA makes this determination through a process known as a Continuing Disability Review (CDR).
If you're selected to undergo a CDR, you'll receive a notice in the mail from Social Security stating that your claim is being reviewed. You will be asked to provide information about your recent medical treatment and your daily activities. A disability claims examiner will review your medical records to decide whether medical improvement has occurred since your "comparison point of decision," or the date you were last found to be disabled. If the claims examiner does not find medical improvement, the CDR is closed and your benefits continue. If the claims examiner finds that your condition has improved and that you're able to work, you will no longer be considered disabled.
You have 60 days to request an appeal, which consists of a relatively informal hearing before a Hearing Officer. At this hearing, you can present additional evidence, call witnesses, and testify about your condition. If the Hearing Officer finds that your disability has ended, you have 60 days to ask for a hearing in front of an Administrative Law Judge (ALJ). Note that you have only ten days from the Hearing Officer's decision to ask that your benefits continue while your ALJ hearing is pending.
While it's impossible to predict with any certainty whether or when a CDR will occur, CDRs are usually scheduled every three years or seven years, depending on the severity of your condition and your prospects for experiencing medical improvement. Generally, the younger the disabled individual, the more likely he or she will experience a CDR. Significant earnings can also trigger a CDR, although earnings that occur during a TWP will rarely cause a review.
Sometimes when an Administrative Law Judge awards benefits, the judge will recommend a review of a case after a certain length of time (often 12 months) because medical improvement is expected. While this doesn't always guarantee a CDR will take place, you should certainly be prepared for it by continuing to seek medical care, taking prescribed medications, and following your doctor's treatment recommendations.
Social Security will automatically review the cases of children receiving SSI when they turn 18. Benefits will be discontinued when the beneficiary fails to meet the adult standards of disability, although this decision may be appealed.
Once you reach the full Social Security retirement age, your disability benefits are automatically converted into Social Security retirement payments. Any earnings during or after the month you reach full retirement age will not reduce your Social Security retirement benefit.
The death of a disability recipient ("beneficiary") will terminate both SSI and SSDI benefits. However, if an individual was receiving SSDI and left a surviving spouse, children, or even dependent parents, survivors benefits may be available. (For more information, read Social Security Survivors Benefits After Death of a Disabled Worker.)
Entering a nursing home, assisted living facility, or hospital may affect your eligibility for SSI, but it depends on the kind of facility and how long you're staying. If you can demonstrate to Social Security that you will be institutionalized for 90 days or less, your SSI benefits may continue. Notify Social Security of your changed living situation as soon as possible.
Disability benefits will also be stopped for as long as a person is incarcerated, and occasionally for a felony conviction, even one that does not result in jail time. SSI recipients who are incarcerated for at least 12 months in a row will need to re-apply for benefits once they're released.
If you receive notice from Social Security that your case is being reviewed, contact an experienced disability attorney immediately. While a CDR can be a frightening prospect for a disability recipient, having a knowledgeable representative on your side will increase your chances of retaining your much-needed benefits.
Updated December 20, 2023
]]>I'm getting married and am over 60 years old. How will this affect my SSI payments? My husband-to-be is 66 years old and is on Social Security disability and has retirement benefits of less than $500 a month.
If you get married while receiving SSI, your payment is likely to be reduced because of your husband's income. Why? Because most of your husband's Social Security income will be "deemed" to belong to you. Social Security uses a complex formula to come up with what your new SSI payment would be—I'll show you how it works.
Anytime a spouse's income is more than $392 per month, that income is subject to deeming. (This is the amount that Social Security presumes is necessary for your spouse's own food and shelter needs, believe it or not.) If you have a minor child who is not receiving public benefits, another $392 will be "saved" for that child, meaning your spouse's income could be as much as $784 per month without any income being deemed to you. But you didn't mention having a child at home, so I assume it would just be you and your husband living together after you're married, making your husband-to-be's income subject to deeming.
To figure out what your new SSI payment would be, you would take your husband-to-be's income and add it to any income you get each month (you didn't mention whether you have any income beyond SSI, so I'll assume not). Let's say your joint income is $500, since you mentioned your husband-to-be's Social Security check is around $500 (I assume your husband's disability payments have recently converted to retirement payments, since you can't receive Social Security disability payments after full retirement age). You then subtract $20 from that amount, and what’s left is the spousal income that is deemed to you ($480).
You then subtract $480 from the SSI income limit for a couple (not for an individual) to come up with your monthly benefit. The SSI income limit (and monthly benefit rate) for a couple is $1,371 in 2023. So after subtracting $480, the $891 remainder is what your new monthly benefit would be. This is less than the $914 SSI benefit that you may have been receiving ($914 is the standard federal benefit amount for an individual in 2023). Note that these calculations would change if you were receiving more money because your state adds a state supplement to the SSI payment.
Or, in case your husband-to-be has income besides Social Security (you didn't say), your SSI payment would be reduced even more. For instance, if your husband-to-be also was receiving $300 from another source (not counting any money from an IRA or company pension), you would have to subtract that from the couple's income limit as well, leaving you with an SSI payment of only $591. If your husband-to-be has other unearned income of more than about $900, your SSI payment would probably be eliminated altogether.
For more information, see our article on how marriage affects SSDI and SSI disability benefits.
]]>The Trial Work Period (TWP) is designed to allow SSDI recipients to experiment with working while still receiving their full monthly benefit. It consists of a total of nine months, not necessarily consecutive, over a 60-month period. During these nine months, a person may earn an unlimited amount without lowering their monthly cash benefit. The TWP was developed many years ago to encourage disability recipients to go back to work when they can.
A month counts as a TWP month whenever an individual earns more than $1,050 per month (in 2023) or when a self-employed individual (that is, business owner, freelancer, consultant, etc.) works 80 hours or more in a month.
All of your monthly earnings before taxes apply to the $1,050 TWP threshold, but you can deduct impairment-related work expenses that you pay for out-of-pocket (such as service animal-related costs, medical supplies, or job coaching). Keep receipts of your impairment-related expenses so that Social Security can total your earnings accurately.
In addition, it is essential to inform your local Social Security office of your earnings for each month you work while receiving benefits. Send a certified letter with a copy of your pay stubs and any impairment-related work expenses by the 10th of the month after a month in which you work. Failure to do so may result in your benefits' being terminated.
For those concerned that a TWP could lead to their benefits being terminated when Social Security conducts a Continuing Disability Review (CDR), it should be noted that CDRs are generally conducted randomly by Social Security. While it's possible for a CDR to occur during a Trial Work Period (or at any other time), a TWP by itself is not likely to raise a red flag with Social Security. If you do have a review, Social Security will look at your medical records, but not your trial work, to see if you are still disabled.
Once you've exhausted your nine-month TWP, you enter the Extended Period of Eligibility (EPE). The EPE is a 36-month period during which you'll continue to receive your full benefit every month as long as you remain disabled and earn less than Social Security's substantial gainful activity (SGA) threshold. In 2023, the SGA level is $1,470 for non-blind individuals and $2,460 for the blind.
If you earn over SGA in any month during the EPE, you'll lose that month's entire benefit, a situation sometimes referred to as the "cash cliff." This will also cause Social Security to find that your disability has "ceased." Once that happens, you will be paid in full for that month and an additional two-month grace period, before benefits terminate.
If you later stop working, or your earnings fall below the SGA level during the EPE, contact Social Security and your benefits will be restarted without having to file a new application. Because it's so easy to re-start your benefits if your work attempt doesn't work out, Social Security calls the EPE the "re-entitlement period."
When the 36-month re-entitlement period ends, your benefits will continue as long as you are medically disabled and not earning SGA. If you earn over SGA for even one month after the 36-month period of re-entitlement, your benefits will terminate. However, if your medical condition makes you stop working again, you may be eligible for expedited reinstatement, if it's within five years of the EPE.
An example may help clarify how the TWP and EPE function in practice.
Medicare coverage comes with SSDI benefits (two years after you become entitled to SSDI). It continues during the Trial Work Period and Extended Period of Eligibility. At the end of your TWP, you'll remain covered by Medicare for another 93 months, even if you're working and earning SGA during this time. Of course, if you remain entitled to disability benefits after the EPE ends, you will still enjoy Medicare coverage as well.
If you're an SSDI recipient wanting to work but unable to perform any of your past jobs, you may be eligible for free vocational rehabilitation, schooling, or technical training through Social Security's Ticket to Work program. Those participating in Ticket to Work will be evaluated at a vocational rehabilitation office and a plan will be developed for the individual to try to return to the workforce. As an added incentive, Social Security may not initiate a Continuing Disability Review of an individual in the Ticket to Work program.
For those who work for themselves, income isn't necessarily a good measure of how much a person is working. To measure whether a self-employed person is working too much to still be considered disabled, Social Security has come up with some elaborate rules based on income earned, number of people who work in the business, and hours worked. These rules apply after the Trial Work Period has ended. To learn more, see our article on what counts as SGA for small business owners.
]]>Back payments are paid for the months between the date you applied for disability benefits and the date you were approved for benefits. Due to the number of people that are applying for disability benefits and the time it takes to process your application, there is usually a long delay between your disability application date and approval date. But note that, for Social Security Disability Insurance (SSDI) benefits, Social Security has a five-month waiting period, so you're only eligible to receive back pay for any delay beyond the waiting period (see “When Payments Will Begin,” below, for further information).
Those who get SSDI back pay will also get payments for the months between when you became disabled (your "disability onset date") and when you applied for Social Security Disability benefits. These are called retroactive benefits because you can get them even before you applied. These are benefits that you would have received if you had applied for benefits earlier.
The type of back payments you're eligible for depends on the type of benefits you are receiving. Those who are disabled can receive SSDI (benefits for those with enough work history) or SSI (benefits for those who have low income and assets). It's possible for individuals to receive both benefits, so you can receive both SSI and SSDI back pay. Below is a chart telling you what back payments you'll receive if you get approved for both SSI and SSDI.
SSDI |
SSI |
|
Back payments available? |
Yes |
Yes |
Retroactive benefits available? |
Yes |
No |
Interest paid on back pay? |
No |
No |
Note that there is no back pay maximum, either for SSDI or SSI.
For those who are receiving SSI benefits, payments begin the first full month after you are approved for benefits. For example, if you are approved for SSI benefits on January 1, you can expect to begin receiving benefits on February 1. There's an exception to this rule for individuals who were determined to be “presumptively disabled.” Those individuals can begin to receive benefits while their application is being processed.
For those who are receiving SSDI benefits, several factors affect when your payments begin: your disability onset date, your application date, and the five-month waiting mandatory period for SSDI. (There's one exception to the waiting period for SSDI; claimants who have been diagnosed with ALS don't need to wait five months.)
Disability onset date. Social Security will use the date you filed a disability application as your “alleged onset date.” If Social Security doesn't challenge this date, the date of application will become your “established onset date” (EOD). Your EOD is important because it is on that date that benefits can begin.
(Sometimes Social Security changes your alleged onset date to a more recent date so that you'll get less back pay. If you were disabled for a period of time before your application date, you may want to hire an SSDI attorney to help you challenge your established onset date, so that the onset date reflects when you actually became disabled and unable to work.)
Wait period. A mandatory waiting period applies to all SSDI claims. You must be disabled for five months after your disability onset date before you can start receiving SSDI cash payments. You will receive disability benefits starting at the beginning of the sixth month. The five-month wait period is generally shorter than the time it takes for an application to be approved, so the waiting period doesn't usually delay the start of your monthly payments, but it does affect the amount of your SSDI back pay. Since Social Security doesn't pay disability benefits during the waiting period, you won't get paid back payments for the five months of the waiting period).
Application date. You won't be able to collect retroactive benefits generally for more than 12 months—the 12 months before your application date. If you the five months of the waiting period to the 12 months of retroactive benefits, the farthest back that Social Security will recognize a disability onset date is 17 months before the application date (12 + 5 = 17). This is true even if you actually became disabled years ago. Another way to think about it: if you weren't disabled more than five months before your application date, you aren't going to get any retroactive benefits.
Your "date of entitlement" is the date that Social Security starts owing you benefits. For SSDI, it's five months after your disability onset date. By using your date of entitlement, you should be able to calculate the amount of your SSDI back pay. Here are some examples using our SSDI back pay calculator.
SSDI Benefits |
|
Date of Disability Onset- EOD |
January 1, 2020 |
Date of Application |
March 1, 2020 |
Date of Benefits Approval |
January 1, 2021 |
Date of Entitlement |
July 1, 2020 |
Months between EOD and Approval Date MINUS Wait Period |
12 – 5 = 7 |
Monthly Payment |
$1,000 |
SSDI Back Pay Due (Monthly Payment x Months between EOD and Approval Date MINUS Wait Period) |
$7,000 |
SSI Benefits |
|
Date of Disability- EOD |
January 1, 2020 |
Date of Application |
March 1, 2020 |
Date of Benefits Approval |
January 1, 2021 |
Date of Entitlement |
April 1, 2020 |
Months between Application Date and Approval Date |
10 |
Monthly Payment |
$500 |
SSI Back Pay Due (Monthly Payment x Months between the Application Date and Approval Date) |
$5,000 |
If Social Security approves you for SSDI only, you'll most likely receive one lump-sum payment for the entire amount of your SSDI back pay.
If you're approved for SSI, or you get approved for both SSI and SSDI, the rules are different. Social Security generally pays the past-due benefits for SSI or combined SSI/SSDI in three equal installment payments, separated by six months each. However, you are eligible for larger first and second installments if you need money for "necessities" (housing, food, medical needs) or to pay off debts for necessities. Or, you may be eligible for one lump-sum payment if you are not expected to live past the next 12 months or you are no longer eligible for SSI benefits at the time you receive your back pay (and not expected to become eligible for benefits within the next 12 months). For more information, read our article on lump-sum payments of back pay.
You should receive your SSDI or SSI back pay in a separate check or direct deposit one or two months following your approval. You may receive it before or after you receive your first monthly payment.
To learn more about disability back pay in general, see Disability Secret's section on Social Security disability backpay.
]]>Social Security doesn’t give you a list of items a representative payee can or can’t buy with someone else’s disability benefits. But you’re expected to spend the money in the best interests of that person.
This article will discuss how you must handle the Social Security beneficiary’s funds, including details about what a representative payee can spend that money on and what the money can’t be used for.
As a representative payee, your first duty is to pay for the disability beneficiary’s living expenses, including:
Once these needs are met, a representative payee can spend the remaining disability money on other things that benefit the disabled person. For instance, you could use some of the money to pay the beneficiary’s past-due bills or education expenses.
You can also use some benefit money to pay for personal comfort items and recreation costs, like:
As far as discretionary spending goes, Social Security evaluates what's reasonable spending based on each disability recipient's circumstances.
How Social Security disability benefits should (or shouldn’t) be spent will be different for different people, depending on the following:
This is why Social Security doesn't publish a list of personal comfort or entertainment expenses that aren’t allowed. What's reasonable spending for some would be unreasonable for others.
For instance, if you’re the payee for a person receiving $700 in SSI benefits per month, you might have trouble just paying for the beneficiary's basic needs. So, spending $300 on a 4K HDTV probably isn’t reasonable.
But what if the beneficiary receives $2,000 per month in SSDI benefits? Making the same purchase, in that case, might be reasonable—especially if the person enjoys watching television and isn't able to get out much.
As a representative payee, you have a fair amount of discretion about how best to spend your friend or family member’s disability benefits. But there are a few things you can’t use that money on, including:
(Generally, only nonprofit organizational payees with written approval from Social Security can charge a fee.)
When Social Security assigns a representative payee for someone receiving SSDI or SSI benefits, it’s because there’s reason to believe that person can’t manage their money on their own. Social Security might assign a payee if the beneficiary is one of the following:
(Learn more about why Social Security appoints representative payees.)
Once their living expenses are paid, even people who need representative payees have the right to spend some of their own benefit money. But the question of giving the person cash has to be determined on a case-by-case basis. You’ll need to use your best judgment.
For example, let’s say you’re the payee for someone with drug or alcohol abuse issues. You’d probably only give such a beneficiary small amounts of cash and closely monitor how it’s spent.
When you accept the role of Social Security representative payee, you agree to always spend the disability benefits in the best interests of the friend or family member you’re helping. You also agree to be held accountable for that spending.
Most representative payees will have to file an annual report with Social Security that explains how the money was spent. You’ll need to keep accurate records of the following:
If there’s money left over after meeting the beneficiary's current needs—including discretionary spending—you must save it in a separate bank account (like an ABLE account) for the beneficiary’s future needs. That’s especially important if the person you’re helping receives a large back payment of past-due benefits.
Learn more about your responsibilities as a Social Security representative payee.
Updated March 31, 2023
]]>I have been receiving disability for seven years and have received a letter saying Social Security does routine audits every three to seven years. Should I be concerned? Also, hearing in the news about the recent "billions of dollars paid to public who should have not qualified," will this make it more difficult to be re-approved or have my case looked at more closely than normal?
Social Security periodically reviews the condition of all Social Security disability recipients to confirm they still fit the definition of disabled – that is, that they are still unable to work. These reviews are called continuing disability reviews. So the letter you received is just routine.
Social Security should have sent you a disability award letter when you were approved for benefits, and that letter should have stated when you could expect your first review. If Social Security found that it was possible, though not necessarily likely, that your medical condition could improve, then your file would have been set for a three-year review. If Social Security didn't expect your condition to improve, your file would have been set for a seven-year review. Generally, the files of disability recipients over 55 receive reviews less frequently than the above timeline. And in recent years, Social Security's lack of funding has allowed the agency to do far fewer reviews than technically required.
Unless your condition has improved enough for you to work, a continuing disability review is not much to worry about. You won't have to prove your disability over again. Instead, to terminate your benefits, Social Security would have to prove that there has been medical improvement in your condition – that is, that the severity of your impairment has become less severe. Also, the medical improvement in your condition must relate to your ability to work. In practical terms, this requirement means that you must have more residual functional capacity (RFC) than you had when your disability benefits were approved. If your RFC hasn't changed (say you still can't sit or stand for more than six hours), your benefits can't be terminated. Social Security must also find that there is some kind of substantial gainful activity (full-time work) that you could do.
There are exceptions to these rules – such as Social Security finding there was a clear error or fraud in the original decision – but in actuality, only about 5% of disability recipients lose benefits after a review. And no, while there may be more scrutiny on initial disability decision in the near future, unless policy and regulations are changed regarding disability reviews, it won't be more difficult to pass a review because of the political climate.
To read further, see our article on how likely it is your benefits will be terminated after a review and the frequency of disability reviews.
]]>Social Security prefers to choose someone who lives with the disabled person and knows what their needs are, such as a parent or other family member. If there isn’t a qualified person living with you, Social Security will likely appoint one of the following people to serve as your payee:
This article will explain what a Social Security payee does, what’s required of a payee, and how to change your representative payee if needed.
Anyone receiving Social Security disability benefits who needs help managing their money could have a representative payee. But the following disability recipients are required to have a Social Security representative payee:
Your representative payee receives your disability payments and manages how that money is spent. Your Social Security payee must:
But being appointed as your representative payee doesn't grant the payee any power to control your other assets.
Your representative payee must deposit your benefits in a checking or savings account created for that purpose (not a joint account). Your payee must use the money to pay for your:
If there’s money left over, it can be used to pay for your other expenses, such as:
After that, any remaining money (for example, from a large backpay payment from Social Security) should be saved in an interest-bearing account.
For more information, see our article on what a representative payee can and can't buy.
Your representative payee must keep track of how all your money is spent. And most payees will need to file an annual accounting with the Social Security Administration. The payee should keep track of income and spending details, including:
At the end of the year, Social Security will send your payee the Representative Payee Report (Form SSA-623, SSA-6230, or SSA-6233). Your payee can complete and return the form or use the information on the form to submit the report online.
Due to changes in the law, some representative payees who live in the same house as the person receiving disability benefits are no longer required to file the annual payee report, including:
But these representative payees must still keep records of all spending and savings and be ready to share this information with Social Security if it’s requested.
Your representative payee must keep Social Security informed about changes in your life or living arrangements. Your Social Security payee must report it if you do any of the following:
Finally, if your representative payee realizes that you’ve mistakenly received too much money from Social Security, the payee should contact the SSA and return the excess money or face fines and penalties.
For more information, see Social Security's Guide for Representative Payees.
Representative payees can be individuals or organizations. The rules regarding payment are different depending on which type of payee you have.
An individual representative payee generally can’t collect a fee for payee services provided to you. The exception is if your payee is also your legal guardian. In that case, your payee might be able to collect a guardian fee if the court has authorized it.
Sometimes an organizational payee, such as a social service agency, serves as representative payee for several people receiving Social Security disability benefits. Those types of payees can collect a fee, but a couple of things must happen first:
If you don’t want the person or organization Social Security has chosen as your representative payee to serve in that role, you can appeal the appointment of the payee. You’ll need to send a letter to Social Security within 60 days after you’re notified of the appointment.
If you’re already receiving Social Security disability benefits through a representative payee but want a different person to be your payee, you can request a change. Unfortunately, Social Security doesn’t offer a payee change form online that you can use. Instead, the person you want to take over as your representative payee will need to go to a local Social Security office to fill out an application and provide proof of identification.
The process required for someone to become your Social Security representative payee is the same whether you want that person to be chosen as your first payee or to replace your existing payee. It starts with the application—Form SSA-11, Request to Be Selected as a Payee. Note that even if someone has power of attorney over your finances, that person still has to apply and be approved by Social Security to serve as your representative payee. The person you want to be your payee will usually complete the application in a face-to-face interview at your local SSA field office.
If you’re already getting disability payments and a family member feels you can’t manage your own finances—for instance, if your health has declined—that person can apply to be your Social Security payee without you requesting it.
When that happens, Social Security will need to know why the payee applicant believes you can’t manage your income. Social Security will investigate, but the SSA will continue to pay your benefits directly to you until the investigation is finished and a decision is made.
If Social Security appoints a representative payee that you feel you don’t need or that isn’t someone you trust to manage your money, you’ll have 60 days to file an appeal.
Learn more about the Social Security appeals process.
Updated March 31, 2023
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