If you're receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), it's important to understand the circumstances in which your disability benefits might be terminated. Returning to work and experiencing medical improvement are two of the most common reasons, but several other major life changes could cause your benefits to stop as well.
When Returning to Work Can Terminate Your Disability Payments
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 2015, monthly earnings over $780 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 ($1,090 in 2015). (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 2015, the limit is $733 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.)
How Medical Improvement Can Lead to Cessation of Disability Benefits
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.
Other Reasons Your Disability Payments Might Be Terminated
Disabled Child Turning 18
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.
Reaching Full Retirement Age
Once you reach 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.
Death of the Beneficiary
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.)
Significant Changes in Living Situation
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.
What to Do If Your Case Is Being Reviewed
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.