The Social Security Administration (SSA) administers two programs for disabled individuals. Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Both SSDI and SSI use the same medical standard to determine who is disabled. They differ on non-medical parts of the program.
SSDI provides benefits to disabled individuals who have sufficient past work to be insured for disability. While working, FICA taxes are withheld from wages. Part of those taxes are a premium for disability insurance. Generally, a person must have worked five of the last ten years before becoming disabled to be insured (a different rule applies to those under 30). In some cases, disabled adult children and widows or widowers can receive disability benefits based on the work of a parent or their deceased spouse.
SSI makes cash payments to aged, blind, and disabled people (including children under 18) who have limited income and resources. No prior work history or contributions to an insurance fund are necessary.
Both SSDI and SSI have built-in incentives for work.
SSDI Incentives
While your disability claim is pending, you can attempt to work. During the first 12 months you are disabled, if you perform what Social Security calls “substantial gainful activity” (SGA), you will lose your claim unless the work lasted 6 months or less and ended because of your condition or because of the elimination of special services or assistance you received which you needed to work. SGA is $1350 per month in gross wages in 2022.
After the first 12 months of disability, if you have applied for SSDI you may be eligible for a trial work period. A trial work period is up to 9 months during which you can work and still receive a disability benefit regardless of how much you earn. If you earn $970 or more in gross wages in a month in 2022, that will be a trial work month. After 9 trial work months Social Security can use your earnings as evidence you are not disabled. During a trial work month you can earn any amount (even over $1350) and your earnings will not be used as evidence your disability has ended.
SSI Incentives
For the year 2022, the SSA will pay up to $841 in SSI benefits minus countable income. Your countable income is made up of the following: wages you are paid from your job (minus $65), 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 Veteran benefits or unemployment.
If you have a pending SSI case and if you earn more than $1350 in gross wages in a month, SSA will determine that you are not disabled. After SSA decides you are disabled you can earn more than that (talk with SSA about how much more) and still receive $1 of SSI and be eligible for Medicaid health coverage. This is different if you also have unearned income like SSDI benefits. For example, suppose Gladys, a single person, was found disabled and eligible for SSI starting January 2022; SSI is her only income. In March 2022 she finds a part-time job which pays $1000 a month. SSI ignores the first $65 and subtracts half of the remaining earnings from the monthly SSI benefit. $1000 – $65 = $935; $935 ÷ 2 = $447; $841 – $447 = $394. So, in March 2022, Gladys will earning $1000 and SSI will pay her $394, and her total income is $1394. She is much better off financially working this job than if she only had SSI.
Generally, at Kirsch and Clark, we encourage our clients to attempt to work. In most cases you will be better off if you work rather than receive SSDI or SSI benefits. If you attempt to work and it is unsuccessful, it is evidence to strengthen your disability claim. However, we need to know about the work to be able to evaluate it in your individual situation. Please call to discuss your work plans with Mr. Clark.
If you earn SGA during the first 12 months of your disability you may potentially jeopardize your SSDI or SSI claim. If you are working you should send copies of your monthly wage stubs or other record of your work and earnings to Kirsch and Clark.
This is a complicated area of disability law. This brief post does not cover all work incentives or rules regarding work and disability. Please call Kirsch & Clark if you have questions. You can also consult the Social Security web page for additional information. https://www.ssa.gov/pubs/EN-05-10095.pdf or https://www.ssa.gov/disabilityresearch/wi/generalinfo.htm
