One of the basic requirements for disability benefits is that your medical condition is so severe it prevents you from performing a substantial amount of work. The Social Security Administration (SSA) defines a substantial amount of work, which it calls substantial gainful activity (SGA), as earning $1,070 a month from working (in 2014). Therefore, if you are earning this much from work when you apply for benefits, you will be denied.
However, once you get approved for SSI, the SSA no longer considers whether you are doing SGA. But the SSA will reduce your benefits by subtracting part of your income from your payment, and terminate them if you go over the SSI income limit. In general, though, the SSA encourages SSI recipients to try to go back to work, and has created a number of work incentives that let a person work without losing their eligibility for benefits.
How Works Affects Your SSI Payment
Its important to understand how SSI benefit amounts are calculated before you can figure out how working will affect your payments.
For the year 2014, the SSA will pay up to $721 in SSI benefits (this doesn’t include any supplement your state may provide). This amount is called the federal benefit rate (FBR). Your monthly benefit amount is the difference between the FBR and your countable income. Your countable income is made up of the following:
- wages you are paid from your job (some of which is excluded)
- the value of free food and shelter provided for you
- support money from family or friends (though not all of your spouse’s earnings are counted against you), and
- payments from other sources, like veterans benefits or unemployment.
Earned Income Exclusion
Earned income means money you are paid from working. If you have earned income, the SSA will exclude the first $65 (if you don’t have any unearned income, $85 will be deducted instead), plus half of the remainder amount over $65 that you are paid each month. This reduces your countable income, which will help minimize the effects of your work on your benefit amount.
For example, if you make $1,465 per month, the SSA will subtract $65 (to get $1,400) and then half of the amount over $65 (to get $700). That $700 is your countable income from work, and it will be subtracted from your monthly SSI payment (which is $721 without a state supplement). You would still get an SSI payment of $21. In a nutshell, you can make a little over $1,500 a month before your SSI benefit is reduced to zero.
Student Earned Income Exclusion
If you are a student who is under the age of 22, the SSA may disregard up to $1,750 of your gross wages (per month) when figuring your countable income. "Gross wages" means the amount of your paycheck before things like taxes are deducted. Note that the SSA limits this exclusion to $7,060 per calendar year, however (in 2014).
To use this incentive, you must go to school on a regular basis. If you are between 7th and 12th grade, this means going to school at least 12 hours a week. If you go to a college or university, you must attend at least eight hours of classes a week. And if you are enrolled in a work-training program, you must attend between 12 and 15 hours a week depending on the type of training you are getting. Even if you can’t go to school because of your disability but you are educated at home, you may be eligible for this incentive.
Besides excluding some of your income, the SSA offers several programs to help you keep your benefits if you want to try to work.
Plan to Achieve Self-Support
Under a Plan to Achieve Self-Support (PASS) program, you can save part of your income or other resources towards can be used to pay for tuition and books or work-related items. For more information on PASS plans, see Nolo's Guide to Social Security Disability, by David Morton, M.D.
Work Expenses for Blind People
If you are blind, the SSA will exclude all costs related to your job, even those that aren’t related to your being blind, from your countable income. This includes transportation, any kind of specialized assistance, and even your taxes.
Impairment-Related Work Expenses
Impairment-Related Work Expenses (IRWEs) are what you pay for disability-related items or services you need to do your job. The SSA will exclude some of these expenses from your earnings when determining your countable income. Here are a couple of examples of IRWEs:
- the cost of specialized equipment you need to do your job, and
- the cost of specialized transportation you need to get to your job.
You can find a detailed list of IRWEs on the SSA’s work incentives web page. If you have an expense that isn’t listed here, it still may be deductible, so make sure you talk it over with an SSA representative. Routine medical or dental care is not an IRWE.
If your employer pays you more than the reasonable value of your work because you are disabled, the SSA will count the overage as a subsidy. Subsidies are not included when figuring your countable income.
Expedited Reinstatement (EXR)
If you lose benefits because your wages put your income above the SSI income limit, your SSI payments will stop. However, if you became unable to work again because of your medical condition, your benefits can be easily restarted in some situations. If you meet all of the following criteria, you may have your benefits restarted without having to apply again.
- Your benefits were stopped because your earned income, or the combination of earned and unearned income, was too high.
- You are not working at the SGA level the month you apply for the EXR.
- You can’t work at the SGA level because of your disability.
- Your current disability is the same as or is related to your original disabling condition, and
- You ask for the EXR within five years from the month your SSI benefits were terminated.
For more information, see Nolo's article on getting your SSI reinstated after working too much.