Is it possible to work part-time and not lose my disability benefits?
Yes. It is possible. However, the full answer to this question depends on how much you earn and what kind of disability benefits you are receiving, either:
- Social Security disability benefits (sometimes referred to as Social Security Disability Insurance – SSDI), or
- Supplemental Security Income (usually referred to as SSI) benefits.
If you are receiving Supplemental Security Income and you go to work, the Social Security Administration (SSA) will reduce your SSI benefits by one dollar for every two dollars you earn after the first $65 (or $85 if you have no other income). This means that you could earn so much working part-time that your SSI benefits will stop. But unless your benefits have stopped because of your earnings for an entire year, the Social Security Administration will start up your SSI benefits again if your earnings go down. After a year of receiving no benefits, you’ll have to apply all over again.
If you are receiving Social Security disability benefits and your earnings are below what the Social Security Administration calls the “substantial gainful activity” amount, your benefits will neither stop nor be reduced because of earnings. That is, you’ll continue to get your full Social Security disability benefit while you work part-time. It is also possible to earn more than the “substantial gainful activity” amount and still receive your full benefits during the nine-month trial work period.
How much can I earn per month and still receive my Social Security disability benefits?
You can earn up to the “substantial gainful activity” amount, which for 2010 is $1,000 per month in gross income (not take-home pay), and still keep your full Social Security disability monthly benefit. The substantial gainful activity amount is an absolute cut-off point. If your countable earnings average more than the substantial gainful activity amount, even $1 more, your Social Security disability benefits will stop after you have used up your nine-month trial work period (and a grace period of three more months), no matter how disabled you are.
If you are going to work part-time and you want to avoid problems keeping your benefits, it is best to keep your income well below the substantial gainful activity amount. In fact, because there are advantages to keeping your income below what SSA calls the “trial work period services” amount, which in 2010 is $720 per month, this is what we recommend if you are receiving Social Security disability benefits. This way you won’t use up your trial work period months; you can save them for later use if you ever decide to try to go back to work full-time.
If your claim is for SSI, the trial work period rules do not apply. For those people already receiving SSI benefits, the substantial gainful activity amount rules don’t apply either.
What are the advantages to keeping income below the “trial work period services” amount?
The trial work period rules allow you to earn any amount per month for nine months and still receive full monthly disability benefits. This lets you test your ability to return to full-time work without having your monthly disability benefits stop. For example, you could go to work full-time for eight months during which time you would get paid for full-time work and receive your Social Security disability benefits too. If at the end of eight months of work you decide that you cannot continue, there is no harm done to your on-going disability benefits. You’ll keep your benefits as long as you don’t medically improve.
However, people often use up their trial work period months by working part-time. Some people, who worked part-time while their claims were pending, are surprised to discover that they used up their trial work period months even before the Social Security Administration found them disabled. If your income exceeds the trial work period services monthly amount (which is $720 in 2010 — it goes up a little most years) for nine months at any time since you applied for benefits, even if those nine months are not consecutive, you will have used up your trial work period. A trial work period month here and a trial work period month there counts as long as all nine months are in any five-year period. Once you use up your nine-month trial work period, it is gone.
People who have already used up their nine-month trial work periods by working part-time are surprised when the Social Security Administration abruptly stops their disability benefits. For example, if your trial work period has already been used up and then you go to work full-time for eight months, your benefits will be stopped after only three months of work. You’ll probably be able to get your disability benefits back if you stop working within three years after you used up your nine trial work period months; but then if you work again at the substantial gainful activity level more than three years after you used up your trial work period, the Social Security Administration is supposed to stop your benefits with the first month of work. If you’re unable to continue working at that point (that is, more than three years after the end of the trial work period), you’ll have more difficulty getting your benefits reinstated.
In short, it is best not to use up your trial work period until you are ready to return to work full-time. Because the trial work period can be valuable, we recommend that you not waste it on part-time work. To keep from wasting the trial work period, you need to keep your monthly income below the trial work period services amount.
When I am trying to keep my income below the trial work period services monthly amount, is it gross income or take-home pay that counts?
Gross income. And that gross income is not averaged over months worked. The trial work period services monthly income rules are very strict. There are no deductions that can be taken against your gross income to reduce it below the trial work period services monthly amount.
If I need more income than the trial work period rules allow, what are the rules for working at less than the “substantial gainful activity” level?
Gross income counts but income is averaged. Theoretically, you get to subtract sick pay, vacation pay, and what the Social Security Administration calls “impairment-related work expenses,” which, as a rule, are the amounts of out-of-pocket payments you make in order to treat your disabling impairment, but there may be some other work expenses that can be deducted too. You’ll need to consult with your attorney or someone at the Social Security Administration about these deductions because many things you might think are deductible, like health insurance, are not deductible. These deductions can be used to reduce your countable income below the substantial gainful activity level. But if you rely on such deductions to keep your income below the substantial gainful activity amount, you’re really living dangerously. It is safer just to use the substantial gainful activity amount as your guideline and make sure your average monthly gross earnings do not exceed this amount.
Is it possible to work part-time at my own business?
It is possible even though the Social Security Administration’s rules allow it to find that a person, who is working part-time in his or her own business and actually losing money (as many businesses owners do when they first open their businesses), is engaging in substantial gainful activity. Benefits can be lost on this basis alone, though this is unusual.
Also, even if you are losing money but you are working more than 80 hours per month, the Social Security Administration will find that you are performing trial work period services. Thus, you will be using up your trial work period.
When must I report my work income to SSA?
If you are receiving SSI benefits, you must report income you receive in one month by the tenth of the next month.
If you are receiving Social Security disability benefits, the Social Security Administration requires that you report “promptly” when you go to work or start your own business. Thus, you need to tell the Social Security Administration right away that you are trying to work.
But nowhere does the Social Security Administration provide a clear statementwhen you need to send it copies of check stubs and proof of any impairment-related work expenses. Thus, you’re likely to be told different things by different people at the Social Security Administration. The general rule is that you must report earnings early enough to avoid an overpayment. But if you’re keeping your income below the substantial gainful activity amount, you won’t have an overpayment (unless you make a mistake).
When you telephone the Social Security Administration to report that you have begun work, ask when you need to provide income documentation. Because different rules apply, make sure that the Social Security Administration representative understands that you are receiving disability benefits, not retirement benefits. Be sure to get the name and location of the person you speak with. Follow up with a letter to your local office, which explains that you have started working and repeats what you were told about reporting income. Keep a copy of the letter.