By Leah Kesselman, Elder & Disability Law Clinic Student, Fall 2020
Most people spend about 90,000 hours of their lives at work—that’s three times as many hours as we spend eating and 10,000 more hours than we spend watching TV! 
Of course, we rely on our paychecks to cover housing, food, and transportation, but regular employment has other benefits too. Having a job can give you a sense of purpose, help you build new skills, and makes you feel like a part of your community. Work is also a critical part of our social health. In fact, a 2018 survey reported that 60% of women and 56% of men have close friends at work. For all of these reasons, having a job can be especially beneficial for people with disabilities. Unfortunately, it can also cause a great deal of stress for those who rely on disability benefits.
If you have a medical condition that keeps you from earning a living, you may be eligible for disability benefits. The Social Security Administration offers two different types of disability benefits. The first one is called Social Security Disability Insurance (SSDI) and is only available to people who used to work but can no longer do so due to their disability. The second program is called Supplemental Security Income (SSI). SSI is not based on work credits: any U.S. resident with a disability, limited income, and limited resources may be eligible.
The table below highlights some of the most important differences between SSI and SSDI.
|Eligibility Requirements||Must have limited income and resources AND at least one of the following: have a disability OR be blind OR be over 65 years old.||Must have a disability AND have a certain number of work credits AND not be engaged in substantial gainful activity AND be unable to do any of the jobs you are qualified for.|
|Income and Resource Cut-Offs||Can’t have more than $2,000 ($3,000 for couples) in countable resources OR earn more than $783 ($1,175 for couples) per month in countable income.||Not eligible for benefits if you earn more than $1,260 per month in countable income.|
|Maximum Monthly Benefit for 2020||$783 for a single person; $1,175 for a married couple.||$3,011 (based on individual work history)|
|Average monthly benefit||$577.78 (as of August 2020)||$1,258 (as of August 2020)|
|Health Insurance||Automatically qualify for Medicaid once you start receiving SSI (in most states)||Automatically qualify for Medicare after 24-month waiting period (from the time you start receiving benefits).|
SSI and SSDI also have one, very important thing in common: even if you’ve qualified in the past, you will stop receiving benefits if you start earning more than a certain amount of money. In 2020, the federal income limit is $783 per month for SSI and $1,260 per month for SSDI. If you earn more than this amount, you are considered to be engaged in “substantial gainful activity” (SGA). If you are engaged in SGA, the Social Security Administration assumes that you are independent enough to earn a living wage and that you no longer need your disability benefits.
So, having a job is great, but it can also lead to a reduction in, or total loss of benefits. That’s okay if you know you know your job is secure. But if you aren’t sure whether you’ll be able to keep working, giving up your benefits might seem a little too risky. What if your new job turns out to be too physically demanding? What if you can’t find reliable transportation or they don’t give you enough hours? These were some of the most common concerns I heard when I was working as a job coach, and they’re definitely important things to think about. It’s also important for you to know that you can work AND continue to receive disability benefits. You just have to understand the system.
Working affects SSDI and SSI in different ways, so the first thing you’ll need to do is figure out which one you are receiving. Most people get one or the other, but it is possible to have both.
If You Have SSI, Here’s How Working Can Affect Your Benefits
You are not eligible for SSI if you earn more than $783 per month in countable income. The first thing you should know is that “countable income” is not the same thing as gross income, or the amount of money you actually earn each month. Countable income includes the money you earn from working (earned income) as well as any workers’ compensation/unemployment benefits you receive and any money you get from friends or family (unearned income). If you get free food or shelter, the value of those items is also included in your countable income. That’s already a lot to keep track of, but it gets even more complicated.
The Social Security Administration doesn’t actually count all of the money you earn as countable income. First, they subtract $65 from your total monthly income. Then, they subtract half of your total monthly earnings above $65.
For example, Tom earns $600 per month working as a maintenance man at his local YMCA. When calculating his countable income, the Social Security Administration will subtract $65 from his total monthly income of $600. This leaves him with $535 of earned income per month, but not all of this gets counted either! Next, they will subtract half of the remaining $535 ($267.50). Even though Tom is earning $600 per month, this leaves him with only $267.50 in countable income—well below the income limit for SSI.
The Social Security Administration also subtract $20 from any unearned income you receive. So, let’s say that Tom’s mom sends him another $100 per month, in addition to the $600 he already earns at the YMCA. $100 – $20 = $80, so only $80 of the money from his mom is considered to be countable income. To figure out Tom’s total countable income for SSI, we have to add this amount to his countable earned income ($267.50). This makes Tom’s total countable income $347.50 per month. Since the limit is $783, Tom will still qualify for SSI.
SSI is designed to make sure that your monthly income is at least equal to the maximum benefit of $783. If you have $0 of countable income, you will receive the whole $783 per month. But if you start earning money, your SSI will decrease to account for those earnings. Instead of receiving the full $783, you will only get enough money to make up the difference between your countable income and the maximum benefit. To really understand what this means, let’s take one more look at Tom’s situation:
We know that Tom’s total countable income is $347.50 per month. Tom is still eligible for SSI, but the Social Security Administration will only give him enough money to get his total monthly income up to the maximum benefit. In other words, they will give him however much he needs to get from $347.50 to $783. Tom will need another $435.50 per month to get his total monthly income up to $783, so he will receive $435.50 from SSI. If Tom’s countable income went up, his benefits would decrease accordingly, but he would not lose them completely unless his total countable income became higher than $783 per month.
Employers are generallyu understanding when it comes to SSI and many of them will work with you to make sure you stay below the federal income limit. If you do decide to take on additional hours or accept a higher paying job, you won’t necessarily lose your benefits forever. If you can’t continue working because of your disability, you can always ask the Social Security Administration to restart your benefits. If you make your request within five years of when your benefits stopped, you won’t even have to file a new application!
If You Have SSDI, Here’s How Working Can Affect Your Benefits
Like with SSI, your SSDI benefits will stop if you start earning more than a certain amount of money per month. However, there are also some pretty significant differences between the two programs.
First, the income limit for SSDI is a little bit higher than it is for SSI. In 2020, the federal income limit for SSDI is $1,260 so, if you’ve qualified for SSDI, you can earn up to $1,260 per month without losing their benefits. Second, while SSI is based on your total countable income, SSDI is based only on your earned income. This means that people receiving SSDI can collect investment income and receive gifts without seeing any changes in their monthly payments. There is also no limit on the amount of resources you can have if you are receiving SSDI.
Finally, the size of your monthly SSDI payment is based entirely on the amount of money you earned during your working years. When you first apply for SSDI, the Social Security Administration will look at your work history and calculate your average monthly income. Then, they plug that number into a formula that tells them how much money you should get. That’s it. Unlike with SSI, the size of your SSDI payment won’t typically change from month to month. As long as you are still disabled and earn less than $1,260, you will keep receiving your full SSDI benefit.
Here’s what all of this means: if you’ve qualified for SSDI and you’re not earning more than $1,260 per month, your current income doesn’t have any impact on your benefits. As long as you still have a disability, your monthly payments will not stop, and they will not get any lower. If you are earning the federal minimum wage ($7.25 per hour) you could work 173 hours without seeing any change in your SSDI. That’s about 43 hours per week! However, it’s important to remember that the more you earn, the less you can work. Let’s look at another example.
Sarah works as a receptionist earning $12 per hour. To figure out how many hours Sarah can work without losing her SSDI, we divide the monthly income limit by her hourly wage. 1,260 ÷ 12 = 105; so, Sarah will be able to work 105 hours per month, or 26.25 hours per week, without losing her benefits.
Now, let’s say Sarah’s boss is really pleased with her work and asks her to start coming in 35 hours per week for the same rate of pay. If Sarah agrees, she will be earning about $1,680 per month—well above the federal income limit for SSDI. But even though Sarah no longer qualifies for SSDI, she probably won’t lose her benefits right away.
The Social Security Administration offers a few work incentives to make the transition a little bit less stressful. trial work periods let people test their ability to work before they actually lose their SSDI. Trial periods usually last about nine cumulative months. During that time, you will continue receiving your full disability benefits, no matter how much you’re earning, as long as you (1) report your income to Social Security and (2) continue to have a disability. If the job isn’t working out, you will be able to leave at any point in the trial period without experiencing an interruption in your benefits.
After you’ve used up your trial work months, you have another three years where you can collect SSDI for any month your income fell below $1,260. This is called the extended period of eligibility. If you continue to work after the extended period of eligibility your monthly SSDI payments will stop completely. However, if your disability starts interfering with your work again, you can always ask Social Security to restart your benefits. If you do this within five years of when your benefits ended, you will not have to file a new application. Finally, if your SSDI stops because of your earnings but you are still disabled, you will continue to receive free Medicare coverage for at least 7.75 years after your work trial period ends!
For more information, please visit the Social Security Administration’s Website at https://www.ssa.gov/benefits/disability/.
 https://www.ncoa.org/blog/ssi-vs-ssdi-what-are-these-benefits-how-they-differ/; https://www.fool.com/retirement/social-security-disability-what-you-need-to-know.aspx.