Impact of Earned Income on Social Security Disability Benefits

Introduction

Before we start to talk about the Employment Supports or Work Incentives provided by Social Security it is important for you to know that Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI) are two different programs and with few exceptions the rules about working are different depending on the program you are in. You may be in one or both programs. If you are one of those people in both programs you have two different sets of rules or Employment Supports/Work Incentives to think about.

For this discussion we are going to be talking about one program only...Title II. For a description of Title II benefits see my previous Hub "Social Security For People With Disabilities". We will be talking about the impact of earned income on the Social Security benefits so you can make an informed decision about how much you want to work when you have this type of Social Security benefit.

For a list of Employment Supports for Title II beneficiaries and a short description of each click here.

The following Employment Supports/Work Incentives are available to people who receive Social Security Disability Insurance (SSDI), Childhood Disability Beneficiaries (CDB), Disabled Widow/Widower.

Remember, these types of benefits are all or nothing. That means when you work you either receive all your cas benefits from Social Security or you receive none of them based on earned income. Social Security always starts with gross income.

The first safety net available when a person starts to work is called Trial Work Period (TWP). This is a nine month period during which a person may work and there s no ceiling on the amount of money a person can earn and still receive the Social Security check. These months are not consecutive and all nine must happen within a five year rolling period. Any month during which you work and your gross earnings are less than the "trigger amount" for the year are not counted as TWP months.

That was confusing, huh? Here is a little more explanation. For year 2009 the dollar amount of gross earned income that triggers Social Security to count that month as a TWP is $700. Any month you work and earn less than $700 gross income you have not used any of the nine TWP monts available to you.

Any month you earn more than $700 you have used one of the nine months available to you.  Remember, $700 is just a trigger.  You could earn $3000 and you will still be eligible for your check from Social Security as long as you are still in the Trial Work Period.  And, you have five years to get all nine months in before you move to the second safety net. If you don't get them all in during a rolling five year period you may start to reaccumulate months already used.

The month after the Trial Work Period ends the second Safety Net begins. It is called the Extended Period of Eligibility (EPE).

I will post the Hub for the Extended Period of Eligibility shortly.