One of the basic requirements for getting approved 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 $1,260 a month from working (in 2020). 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 determines whether you are making over the SGA amount. But the SSA will reduce your SSI benefits if you are working by subtracting part of your income from your payment. If you go over the SSI income limit, the SSA will terminate your benefits. 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.
It's important to understand how SSI benefit amounts are calculated before you can figure out how working will affect your payments.
For the year 2020, the SSA will pay up to $783 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:
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 remaining 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 $1,565 per month, the SSA will subtract $65 (to get $1,500) and then half of the remaining amount (to get $750). That $750 is your countable income from work, and it will be subtracted from your monthly SSI payment (which is $783 without a state supplement or any deductions). You would still get an SSI payment of $33. In a nutshell, you can make about $1,600 a month before your SSI benefit is reduced to zero.
If you are a student who is under the age of 22, the SSA may disregard up to $1,900 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 $7,670 per calendar year, however (in 2020).
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.
Under a Plan to Achieve Self-Support (PASS) program, you can save part of your income or other resources to 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.
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 (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:
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.
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.
For more information, see Nolo's article on getting your SSI reinstated after working too much.
Updated January 31, 2020