SSDI WORK RULES

Social Security work incentives, as well as the new Ticket-to-Work program, may support an individual’s efforts to re-enter the workforce.

As an individual considers working, these essential Social Security definitions should be considered.

1. Disability: an inability to work due to a disabling condition that will last for at least one year or more. Your disability will be questioned if you work during the first year of receiving benefits.
2. Working: any activity that generates earned income.
3. Earned income: Salaries, wages, tips, professional fees, and other amounts received as pay for physical or mental work performed. Social Security uses the individual's gross income (before taxes).

There are two timeframes - Trial Work Period and Extended Period of Eligibility - that Social Security uses when a SSDI beneficiary begins earning income and can continue to receive benefits.

The Trial Work Period (TWP)

The nine Trial Work months occurring within a five-year window when an individual works and continues to receive full Social Security Disability Insurance (SSDI) benefits. These work months can occur one right after the other (consecutively) or intermittently (non-consecutively). A Trial Work Month is any month when gross earnings (income before taxes) are $670 or more (since January 1, 2008). In other words, if an individual works for six months and stops working, he or she will still have three more months remaining of the Trial Work Period. The nine trial work months count as the Trial Work Period if the months are used within a five-year window (60 months).

If an individual does not work a total of nine months within the five-year window, the window rolls or moves forward until he or she has worked nine Trial Work Months. Once an individual’s Trial Work Period closes (ends), the Extended Period of Eligibility automatically begins.

Trial Work Months are indexed annually for increases or decreases in the cost of living. The earning level for 2008 is $670. This figure was:

• $640 in 2007;
• $620 in 2006;
• $590 in 2005;
• $580 in 2004;
• $570 in 2003;
• $560 in 2002;
• $530 in 2001;
• $200 from 1990 to 2000.

The Extended Period of Eligibility (EPE)

The 36 consecutive months that start at the end of the Trial Work Period. During the Extended Period of Eligibility, any month in which gross earnings (income before taxes) are $940 or more (for 2008) or $1,570 for blind beneficiaries, an individual’s wages are considered Substantial Gainful Activity (SGA). When an individual’s earning first reach SGA, a three month grace period begins, allowing a beneficiary to continue receiving SSDI payments regardless of wages. However, after the three month grace period, an individual will not receive SSDI income benefits if wages are at or above SGA. If wages fall below SGA, SSDI payments will resume. Beneficiaries who continue to earn SGA income after the EPE will no longer be eligible for SSDI payments.

See the SSDI Work Rules Closeup for an example showing how the Trial Work Period, Extended Period of Eligibility, and grace period can work.

Note: Social Security rules allow an individual’s gross earnings to be reduced by any Impairment Related Work Expenses (IRWEs) during your Extended Period of Eligibility, but not during a trial work period month.

For the five years after this Extended Period of Eligibility, if an individual’s earnings fall below Substantial Gainful Activity due to his or her disabling condition, he or she may request to be re-instated without a new application. The provision is called Expedited Re-Instatement to Social Security benefits.

SUBSTANTIAL GAINFUL ACTIVITY (SGA)

A guide used by Social Security to evaluate earned income and “work activity” of individuals applying for or receiving disability benefits.

There are two issues that determine SGA:

1. Substantial activity: work that involves doing significant physical or mental work, or a combination of both, that is productive and for profit.

2. Gainful work activity: work performed for pay or profit; work of a nature generally performed for pay or profit; or work intended for profit, whether or not a profit is realized.

This is a monthly amount that is specified by Social Security for individuals who are employed or self-employed. SGA may be determined by work done or hours worked in a month. Monthly SGA earnings limits are adjusted annually based on fluctuations in the national average wage index. The SGA level is higher for persons who are determined by Social Security to be blind.

For 2008, SGA is $940 and $1,570 for the blind.

Previous Substantial Gainful Activity monthly amounts (non-blind) were:

• $900 in 2007;
• $860 in 2006;
• $830 in 2005;
• $810 in 2004;
• $800 in 2003;
• $780 in 2002;
• $740 in 2001;
• $700 from July of 1999 to December of 2000;
• $500 from January 1990 to June 1999;
• $300 before January 1990.

OVERPAYMENTS

Be sure to report all of your gross income to Social Security promptly. Failure to do so could result in an overpayment of benefits. You will likely be held responsible for repayment of benefits if an overpayment occurs.

If your wages change, report the change right away. Individuals who are self-employed should report earnings based on the most recent IRS tax return. To report earnings, contact Social Security at 800-772-1213 (voice) or 800-325-0778 (TTY).

OTHER SOCIAL SECURITY WORK RULES

An Impairment Related Work Expense (IRWE) is a documented expense for services or items related to one's impairment which the beneficiary paid for in order to support work activity. Some examples of IRWEs include wheelchair repairs, out of pocket payments for prescription drugs or medical expenses, or a computer screen reader.

• Impairment Related Work Expenses must be verified with original receipts or canceled checks.
• Impairment Related Work Expenses are approved at the local Social Security field office on a case by case basis.
• There is no fixed list of approved Impairment Related Work Expenses.