How Much Can You Earn If You're Receiving SSD?
(Column: Ask the Attorney)
A recipient of Social Security Disability benefits can attempt to work and earn money, but those earnings will have an effect on the amount of benefits received under the Supplemental Security Income (SSI) and Social Security Disability (SSD) programs and, possibly, on continued eligibility for those benefits. In the last article I discussed the impact of earnings on SSI and Medicaid benefits. In this article, I will address the impact of earnings on Social Security Disability (SSD) and Medicare benefits. This is a broad overview of extremely complicated rules, and is only meant to be that. A person attempting to work should consult an advocate to discuss his/her individual circumstances to ensure s/he is taking full advantage of these incentives and to ensure s/he is complying with the law.
First, a reminder about the difference between the SSI and SSD programs. SSI is the federal public assistance program for disabled individuals who have no significant work history and, therefore, have not contributed to the insurance pool. SSD is the federal insurance-based program based on an individual's work history.
Recipients of SSD are entitled to test their ability to work and earn up to a statutory amount for nine months, without losing benefits or having eligibility questioned. This is called the "trial work period." During this time, Social Security will count each month in which an SSD recipient earns more than $530 in gross earnings as a "trial work" month. In calculating the nine months of gross earnings over $530, look to any nine months in a 60-month (five years) period. The months do not need to be consecutive. Any month within a five-year rolling period in which more than $530 gross is earned will count toward the trial work period.
Note that if a recipient of SSD benefits earns less than $530 in a month, that month does not count toward the trial work period, and there is no effect on that person's SSD benefits. That person gets to keep the full paycheck and receive full SSD benefits for that month.
Note also that if a recipient of SSD benefits grosses more than $740 in earnings for a number of months, those months will not only count toward the trial work period, but may trigger a continuing disability review by Social Security to ascertain if the person has medically improved to the point that s/he can engage in substantial gainful activity on a permanent basis. This is because earnings of $740 are considered the bright line test for "substantial gainful activity."
What happens after a person has earned more than $530 for nine months in a 60-month rolling period? At the end of this 9-month trial work period, an extended period of eligibility begins. This means that one's eligibility for SSD benefits continues, even though one does not receive SSD benefits. These 36 months run consecutively. During this time, a person can request payment of SSD benefits for any month in which countable wages are below $740. In addition, SSA considers the first three months of the 36-month period a "grace period," and one will receive SSD benefits in those three months as well. This extended period of eligibility is meant to ensure that a person who attempts to work and become self-sufficient will have a cushion if work activity ceases for any reason.
How does work activity during the trial work period and extended period of eligibility affect the receipt of Medicare? Medicare benefits continue during the trial work period (9 months) and for 39 months thereafter, as long as the person continues to be disabled. In addition, even when one's SSD benefits are discontinued after the trial work period and extended period of eligibility, Medicare will continue for four and one-half years or 56 months after discontinuation of SSD benefits.
If you are going to invoke the benefits of the trial work period, you must keep accurate records of earnings and dates of earnings. You should immediately report in person to the Social Security Administration when you have completed your 9-month trial work period. Otherwise, it can take Social Security years before learning that the trial work period has been exhausted. You will then be subject to an overpayment and recoupment, which can be taken from your tax returns and, ultimately, from your retirement benefits. Advocates in the field report many cases where SSD recipients engaged in trial work, notified Social Security by telephone, but nothing was done. They continued to collect SSD benefits, assuming they were entitled. After all, they had informed Social Security. Years later they were subjected to overpayments and recoupment, which were devastating to their economic circumstances.
Remember, Social Security is a huge bureaucracy that processes enormous amounts of information. So be prepared to be your own advocate by keeping clear and accurate records, and taking personal responsibility to ensure that SSD benefits cease at the right time.