When an adult with special needs receives any Social Security benefits, earning wages from working could affect those benefits. However, the impact that working can have on Social Security benefits depends largely on what type of benefits the adult receives and the amount of wages the adult earns.
Supplemental Security Income (SSI)
Household income, including income earned from employment, directly impacts whether an individual with special needs can receive Supplemental Security Income (SSI) benefits and how much they can receive. Generally, the more income a person has through employment, the smaller the amount of SSI they can receive.
Some earned income does not count as income for SSI, including the following:
- The first $20 of income per month from most sources;
- The first $65 of earnings per month; and
- One-half the earnings over $65 earned per month.
SSA provides an exemption for certain income earned by full-time students. Additionally, suppose the individual has impairment-related work expenses (add link to definition of IRWEs). In that case, SSA will deduct those reasonable expenses from their earned income, which could increase the amount of SSI benefits to which they are entitled. Further, SSA allows for the gross work earnings to be “reduced” if it is determined the employer is paying a subsidy and the amount of the subsidy is not considered “countable earnings” as part of the substantial gainful activity (SGA) calculation (see below). Also see SSA Program Policy Statement SSR 83-33. Finally, SSA allows individuals to exclude some income from their earnings if they put it aside to meet expenses for a work goal under a Plan to Achieve Self-Support (PASS).
Social Security Disability Income
Individuals with disabilities no longer qualify for Social Security Disability Income (SSDI) benefits if they can engage in SGA. The Social Security Administration (SSA) measures SGA based on an individual’s earnings each month. Therefore, the amount of SGA changes every year. For instance, in 2023, the SGA amounts are $2,460 for individuals who are blind and $1,470 for individuals who are disabled but not blind. However, SSA does provide some exceptions for self-employed individuals or those working for a family business.
SGA does not immediately affect the SSDI benefits a person with disabilities receives. Instead, SSA provides for a nine-month trial work period that allows the individual to work and earn any amount of money without adversely affecting their SSDI benefits. The nine months can be consecutive or non-consecutive within 60 months.
After the individuals earn more than the SGA for nine months, they move into a 36-month extended period of disability. During this timeframe, the SSA reviews the individual’s monthly income to determine if it meets or exceeds the applicable SGA. If the earnings are below the SGA for the month, the individual will receive SSDI benefits that month. Conversely, if the earnings are at or above the SGA for the month, the individual will not receive SSDI benefits that month.
Once 36 months of an extended period of disability have elapsed, SSDI benefits will terminate if the individuals receive earnings that are at or more than the SGA level in any month. Therefore, even if the individuals make less than the SGA level in a later month, they will not automatically begin receiving SSDI benefits again. However, individuals in this situation can reapply for expedited benefits reinstatement if they become disabled again within five years of the date that they stopped receiving SSDI benefits.
Childhood Disability Benefit
Some individuals with special needs may qualify to receive Social Security benefits based on a parent’s work record in specific situations. For example, if individuals became disabled before the age of 22 and have a parent who is deceased or who receives SSDI or Social Security Retirement benefits, they may qualify to receive these benefits. This type of Social Security benefit is the Childhood Disability Benefit (CDB), which SSA formerly called Disabled Adult Child (DAC) status; eligibility for these benefits often allows persons with special needs to receive far more in Social Security benefits than they otherwise would receive in SSI or SSDI benefits because their parent likely had a substantially larger work record.
The impact of working on CDB is different than it is on SSI or SSDI. If an individual with disabilities receives CDB and begins to work, then the same rules will apply as if the individual is receiving SSDI in terms of SGA. However, for individuals who are not yet receiving CDB but may in the future, engaging in SGA could result in complete ineligibility for CDB for the rest of their life. For example, if an individual is over the age of 22 and earns more than the SGA level in any month before a parent becomes disabled, retires, or passes away, then the individual is at serious risk of being unable to draw CDB under that parent’s record.
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