Social Security Benefits It Works to Work
Work provides them a lot of benefits: a way to use one’s talents and contribute, a place to build peer relationships and even friendships, a way to develop social capital. Since I am a financial planner, rather than a psychologist or behaviorist, I will focus on the benefit in my purview: money. People who work have more income than people who don’t. But people with disabilities and/or their family and friends are sometimes afraid that working at all, or at least working too much, will cost essential benefits and support services. I have it on good authority from several highly competent Social Security career employees that 1) Social Security wants people with disabilities to work and 2) a person with a disability who works is almost always better off financially than one who relies on benefits alone. But following the rules can be daunting.
An income of $1,180/month is the basic threshold to beware….
First, some basics: You do not need to be totally incapable of working to meet the Social Security definition of “having a disability”, and thereby qualify for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). However, your disability must prevent you from working too much, or to use Social Security lingo from engaging in “Substantial Gainful Activity” (“SGA”). SGA is defined as work that provides you more than $1,180/month in gross income (2018) or more than $1970/month in gross income (2018) if you are blind.
But rules have exceptions.
That said, the definition limits “countable” income. Work incentives, including Impairment-Related Work Expenses (IRWE, pronounced “UR wee”) and employer subsidies, may reduce how much of your income the SSA counts when determining your eligibility.
IRWE can include things like the training and care of a service animal, the cost of special transportation, or the purchase of a wheelchair or mobility aid, or special clothes, or communication devices. In general, IRWE, which must be approved by the Social Security Administration, must cover items and services that:
- …you require in order to work
- …you need because of your disability or a related condition
- …you pay for out-of-pocket without any reimbursement from any third party
- …have a reasonable cost.
As a person with a disability, you might need a job coach. Or you might need more frequent breaks because your disability makes it harder for you to work for extended periods of time under certain conditions. Perhaps because of your disability, you work somewhat slower than your co-workers, but earn the same.
In each of these cases, if your employer makes reasonable accommodations, Social Security considers your employer to be providing a subsidy. If the subsidy can be quantified, it can be deducted from countable income.
Income + Benefits = Better
So, you can work and receive benefits. You do lose fifty cents of SSI for every countable dollar you earn, but you will still have more money with earnings on top of reduced benefits than on benefits alone. SSDI is an all-or-nothing benefit. As long as your countable income is below SGA, you will get your whole SSDI benefit and it may grow as you work longer. Clearly you are better off working than not.
If you receive SSDI, even if you do start to earn over SGA, your benefits don’t just stop abruptly. There is a process, designed to determine whether you can earn at that level consistently. First, you must first accumulate nine “Trial Work Months” in a rolling sixty-month period. A trial-work month is a month in which you earn more than $850 (2018). Note that this threshold is lower than SGA and is calculated without the benefit of IRWE or subsidy deductions. Month nine completes the trial work period. During the trial work period, you will receive your SSDI benefits.
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The SSA will review your trial work period history to determine if, on average, you were earning above SGA, after IRWE and subsidies. If yes, your SSDI benefits then end. If no, you enter the “Extended Period of Eligibility,” or “EPE,” which lasts for 36 months. Throughout the EPE, you will receive SSDI for any month you earn below SGA. Then your benefits stop, but if you are once again unable to earn SGA, you can request expedited reinstatement any time within the next 5 years. After that, you must reapply and requalify for benefits.
If you work and receive disability benefits, following the rules to maintain eligibility is a job within a job. Still you can clearly live better on $457 of SSI + $1,000 of wages than you could on $750 of SSI alone. And your $850 of SSDI would not go nearly as far as $850 + $1,667 of earnings. Let’s get to work!
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Alexandra Baig left the corporate financial world to build her own financial planning practice focusing on the particular needs and complexities of people with disabilities and their families. She has an MBA from the University of Michigan and her CERTIFIED FINANCIAL PLANNER™ designation. She is well-versed in the government benefits available to people with special needs and the rules governing them. Her goal is to help people with disabilities and their families make the most of public and private money to life the life they chose.
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This post originally appeared on our November/December 2018 Magazine [18]