Everday Resources

Whether you’re considering applying for disability or already receiving payment, if you can make some money, you may want to do so. Given the fact that social security disability insurance only pays a percentage of your previous salary, it’s natural to wonder if you could earn some supplemental income and still claim benefits.

If so, how much can I earn while on social security disability? Below we’ll explore those answers. 

What Is Social Security Disability Insurance (SSDI)?

Per the Social Security Administration’s official website SSA.gov, SSDI benefits pay a person who is disabled or a family member (in some cases) cash benefits. In order to qualify for these insurance benefits, you must have worked a minimum number of years, with each year earning work credits.  On this work, you must have paid social security taxes — through your employer or in the form of self-employment taxes.

To apply for SSDI benefits, you will submit medical records and other information. Specialized personnel will review your application to determine if you meet the Social Security Administration’s definition of disability.

Who Is SSDI For? SSDI Is for People Who Cannot Earn a Living

SSDI is intended for people who cannot earn a living because of a mental or physical disability. Unlike those on short-term disability insurance, when you receive social security benefits, it means that you are likely to be unable to earn a living over an extended period. This doesn’t, however, completely preclude you from earning some income if you are able to do so.

In fact, it’s encouraged through work incentives.

For example, you may have suffered a personal injury, involving the loss of your hand. Whether you need to type or operate machinery, if you use your hands to work, this may significantly impact your ability to make a living. You may qualify for SSDI benefits.

Even if you can earn some additional income without losing your benefits, it’s important to remember that this is an entitlement program designed to help people who cannot make a living. It doesn’t replace all income lost, and taking disability may require a reduction in your standard of living. 

Suppose you are capable of making a living despite your disability. In that case, social security disability benefits are not intended for you, and you should leave them for those who really need them. The goal should always be to make a living income if you are able and accept the help, knowing you paid for it through your social security taxes, if you cannot.

Substantial Gainful Activity (SGA) & Disability Benefits

While receiving SSDI benefits, you may engage in substantial gainful activity (SGA) but only up to a limit. For 2022, that SGA limit is $1350 for most people. Those who are statutorily blind may make $2260. For blind individuals, this SGA does not apply to supplemental security insurance SSI benefits, a different type of social security. However, for non-blind people, the SGA limit applies to both SSI and Social Security retirement (not usually applicable). In neither case your spouse’s income will not impact your qualification for SSDI benefits. 

This seems rather straightforward, but here’s where this can get a little more complex.

What Are Social Security Work Incentives / Trial Work Period?

If a sudden — or suddenly worsening — condition led to your disability, then applying for disability benefits may have seemed your only or best option at the time. However, once you’ve become accustomed to your disability and have had an opportunity to explore other options, it may look like you can return to work.

With that said, many people are afraid that they may not be able to make an adequate income, so they don’t attempt to do it despite wanting to work. What if they lose their benefits and can’t get them back? That’s a valid fear.

For this reason, SSA  has created an incentive for you to try to work after you start receiving benefits. It’s called the “trial work period“. During this time, you may earn income and receive benefits, as you test your ability to make more income through working versus receiving benefits. 

You can complete a trial work period for up to nine consecutive or non-consecutive months over a rolling 60-month timeframe before you’re considered to “not have a disability” requiring benefits. In any of these work months, if you exceed $970 (in 2022), then it counts toward the nine months in 5 years. 

In other words, even though a non-blind person with a disability can earn $1350 in additional income from gainful employment and stay on disability, you shouldn’t expect that you’ll be allowed to reach this limit every month. For all but nine months in 60 months, the actual limit is $970.

It’s also important to note here, that even if you have no plans to get off disability, you can still take advantage of this trial work period when it makes sense for you. For example, you do some gig work for a couple of months, so you can buy your spouse a nice birthday present you could normally not afford. It’s not a regular thing, and you don’t plan to make a job out of it, but you have an opportunity to make some money within your abilities and do something nice for someone you love. You earn between $970 and $1350 in a month for this work. This won’t get you immediately kicked off disability because it will be treated as a trial work period.

What If Your Countable Income Goes Above the SSI Income Limit?

Supplemental Security Insurance (SSI) pays out based on financial need and is not the same as SSDI, although overlap in those who qualify exists. SSI is for people who are:

• Blind
• Disabled
• Aged

But they also have little or no income or financial assets. We fund it through taxes, not someone’s income, so adults with disabilities who have never worked may qualify for it.

It’s not intended to replace income, but to help a person cover the basics when they don’t have the means to do so:

• Food
• Shelter
• Clothing

Your countable assets (resource limit) can’t exceed $2000 for an individual or $3000 for a couple to get SSI. However, many assets are not counted like your:

• Primary residence
• ABLE accounts
• Primary vehicle if you or a family member use it for transportation

The SSI countable income limit is the same as SSDI (discussed above). However, if you are not blind, SSI and the Social Security you get at retirement age will count toward your income limit. Be sure to subtract these amounts to determine the upper limit for your monthly income from gainful employment.

You can use the Benefits Eligibility Screening Tool on SSA.gov to determine what you or a loved one may qualify for SSDI, SSI or both.

How Does Self-Employed Income Impact SSDI & SGA?

If you are self-employed, don’t forget to deduct work expenses on your Schedule C, home office, and depreciation, as applicable. These reduce your taxable income. However, the SSA does state it looks at self-employed income differently. They do not “consider income alone” when deciding if you qualify for disability or are entitled to stay on disability because self-employed income can be delayed. They will also “evaluate your work activity based on the value of your services to the business, regardless of whether you receive an immediate income for your services.” In other words, knowing your income limit can get tricky for some.

How Much Money Can You Make on Social Security Disability?

Using the above information, we can now summarize to answer this question. You can make up to $970 per month on an ongoing basis without worrying about losing your disability benefits. However, you can make over this amount for nine months in a rolling 60 month period in what is considered a trial work period.

But don’t forget about SSI. Suppose you also receive SSI or regular Social Security Retirement income. In that case, those amounts count as income unless you’re blind, so you should subtract those amounts from the $970/mo or $1350/mo, depending on your disability income earning strategy. This allows you to determine how much work income you can make without threatening your benefits.

What Are the Income Limits in Order to Not Qualify for Benefits?

If you are currently exceeding the SGA limit of $1350/mo for the year after the disability occurred, then you will not be approved for disability because you won’t qualify. But let’s say that you did qualify and started receiving benefits. Now, you must be careful not to exceed the income limit calculated above, so you can continue to receive your disability benefits. Unless, of course, you intend to return to full-time gainful activity as an employee or self-employed person — if you’re capable of doing so.

Most people asking the question, “How much can I earn while on social security disability” want to stay on disability but also want to take advantage of the trial work incentive to increase their income. That’s certainly okay, but if you choose to do this, it’s vital that you know your upper limit. While the upper limit is the same for most people, if you receive SSI, social security retirement income, or are self-employed, you have some math to do, and you don’t want to get that math wrong. It’s certainly advisable to discuss this with a disability lawyer, and they may offer a free consultation.

Understanding how Social Security Disability Insurance works when you receive (or plan on receiving) a lump sum settlement can save you a lot of hassle and stress.

Following are some commonly asked questions on the topic along with helpful answers to enable you to make smart financial decisions?

Will I lose my SS Disability Insurance if I get a settlement or win a lawsuit?

You won’t automatically lose your Social Security Disability Insurance upon receiving a settlement. In fact, up to 17% of all SSDI recipients have a connection to either workers’ compensation or public disability benefits. However, the amount you receive from SSDI could be lowered due to receiving a settlement or winning a lawsuit, in some cases significantly so.

How does a lump sum settlement affect Social Security Disability Insurance?

Social Security Disability Insurance doesn’t cover more than 80% of a person’s typical earnings before he or she became disabled due to an illness or injury. If you receive a lump sum settlement, SSDI will usually prorate the settlement, dividing the money you receive from the settlement by the number of months you are expected to be on SSDI; that is, until you are able to go back to work or you reach retirement age, at which point SSDI payments automatically switch to a Social Security retirement payment and SSDI offset rules no longer apply.

In some states, the lump-sum payment a person receives when on SSDI is reduced to ensure a person is not receiving more than 80% of his or her former salary. This means that a person who is receiving the full 80% of his or her former salary will receive money from a lump sum worker’s compensation settlement; however, those who are receiving less than 80% of their former salary will receive some settlement money. Once again, this only applies to individuals under the age of 62; those of retirement age receive retirement payments and so will receive the full 100% of their lump sum payment without a reduction to their monthly SS payments.

Following are two examples that clarify the rules.

Clarissa earned $5,000 a month before becoming permanently disabled due to an on-the-job accident. She began to receive Social Security Disability Insurance on her sixtieth birthday and currently receives $4,000 a month in payments, which is 80% of her former salary. She then received a lump-sum settlement of $10,000 from her employer one year later (on her sixty-first birthday). The $10,000 is then divided by twelve (as it is only twelve months before she turns 62, which is retirement age), which comes to about $833 a month. This sum is subtracted from her SSDI payments for the coming year, which means she will only receive about $3,267 a month from SSDI.

Tony, on the other hand, is 42 years old. He used to earn $10,000 a month but became ill and now only receives $5,000 in monthly SSDI payments. This comes to 50% of his former income. If it is determined that Tony’s employer is partly responsible for Tony’s illness and Tony receives a $1,000,000 lump sum settlement, this is divided by 240 months (the number of months until Tony turns 62). Tony would receive the equivalent of $4,166 a month but because he is on SSDI, the state only pays out the equivalent of $3,000 a month to cover up to 80% of Tony’s former salary. Put simply, this means he would only see $720,000 of his settlement money.

What income affects Social Security disability benefits?

Not all payments affect Social Security disability benefits. Some payments that aren’t covered by Social Security’s offset rules include: 

• Veterans Affairs benefits
• Needs-based benefits
• Federal, state, or local disability benefits based on employment covered by Social Security
• Private pensions
• Private insurance benefits
• Supplemental Security income

Can You Receive Social Security Disability and Workers’ Compensation at The Same Time?

You can receive Social Security disability and lump-sum or monthly workers’ comp payments at the same time. However, the workers’ compensation payments are subject to the rules outlined above, and in some states you may not receive any workers’ compensation payments if you already receive 80% of your former salary via SSDI benefits. 

How can I minimize the offset amount?

There are some things you can do to minimize the offset amount of a lump-sum settlement or lawsuit payment:

• You can have the money paid as an annuity instead of all at once. Put simply, this means you’ll receive a set amount of money per year rather than the entire sum in one sitting. This option may work well for people who are close to retirement age and/or are not receiving the full 80% benefit from SSDI.
• You can have the settlement or lawsuit payment deferred so you start receiving an annuity at a future date instead of right now. This is ideal for anyone who receives 80% of his or her former salary from SSDI but still wants the full lump-sum payment from the lawsuit or settlement. By deferring payment until retirement age, a person can receive both SSDI and the full settlement/lawsuit payment. 

These options have their flaws, and may not be suitable for everyone. Talk to a lawyer about your options to ensure your financial decisions meet your current and future financial needs.

Are there exclusions for certain expenses? 

Any medical and legal expenses you incur in connection with receiving workers’ compensation can be excluded when Social Security (or your state) decides on how much money you’ll receive in monthly payments. Let’s take a look at a couple of examples:

Mary, who is 60 years old, earned $10,000 a month but lost her job due to an on-the-job injury. She receives $4,000 in SSDI payments and was awarded $200,000 in a recent lawsuit. This sum divided between 24 months would come to about $8,333 a month, but Mary would only be eligible for an extra $4,000 a month due to SSDI rules. However, if she has to pay about $5,000 a month in medical expenses, she would receive the full benefit with no exclusions as she would only be getting an extra $3,333 a month after medical expenses are covered. 

Tony is 40 years old. He used to earn $10,000 a month but got sick due to exposure to chemicals at work and is now unemployed, receiving only $5,000 a month from SSDI. He won a lawsuit against his former employer and received $1 million on compensation but has to pay 25% of this money ($250,000) to his personal injury lawyer. What’s more, his medical expenses will be about $5,000 a month for the next 10 years. This comes to $600,000 in personal medical bills. These expenses are deducted from his lump-sum payment before Social Security calculates how much money Tony would get from his settlement. He only has $150,000 after qualifying expenses, which comes to about $568 a month for the next 22 years until Tony reaches retirement age. Thus, Tony would receive his full lump-sum payment as it does not exceed 80% of his former income once expenses are calculated into the equation.

How can I calculate average current earnings? 

There are three ways in which average current earnings (ACE) can be calculated:

• Your average monthly earnings from the work or business you engaged in the year before you became disabled. To calculate this, add up your annual income and divide it by twelve.
• Average your monthly earnings from the five years in which you earned the most income before you became disabled. To calculate this, add up the annual income from these five years and divide it by sixty.
• Go over your income from the last five years before you became disabled, find the year in which you earned the most money, and divide that year’s income by twelve.

Naturally, you’ll get different answers from each of these calculations. The number that is the highest is the one that Social Security will use to calculate your SSDI payments. 

A lump-sum payment from a settlement or a lawsuit payment can be a huge boon to anyone on SSDI; however, it’s important to be aware that you may not see much or even any of this money if you don’t have a financial plan in place to ensure your SSDI income isn’t offset by too much as a result of your new source of income.

If you have received a lump-sum payment or expect to receive one in the near future, consider the information outlined above and seek legal or expert help if need be in order to keep as much of your lump-sum payment as possible, without lowering your SSDI income. 

The transition from Social Security Disability Payments to Social Security retirement payments can be scary for many SSDI recipients.

Many worry that they will lose income right when they need it most, others are concerned about the paperwork they may need to fill out to complete the transition while still others are unsure of when their SSDI payments will switch over to regular SS payments.

Following are some detailed answers to commonly asked questions along these lines.

Will My Social Security Disability Change When I Turn 66?

Your SSDI benefits will automatically change when you reach full retirement age. However, “full retirement age” varies depending on the year in which you were born.

• Those born in 1956 will reach full retirement age at 66 years, 4 months
• Those born in 1957 will reach full retirement age at 66 years, 6 months
• Those born in 1958 will reach full retirement age at 66 years, 8 months
• Those born in 1959 will reach full retirement age at 66 years, 10 months
• Anyone born after 1960 will reach full retirement age at 67 years

If you happen to have been born on January 1 of any given year, your full retirement age would be the year before you were born. For instance, an individual who was born on January 1, 1960, would be treated as a person who was born in 1959 and would be at full retirement age at 66 years, 10 months, rather than at 67 years.

What Happens with Social Security Disability Recipients at Retirement Age?

You cannot receive SS disability payments and SS retirement benefits at the same time. Once you start receiving SS retirement benefits, your disability payments will automatically end. There is only one expectation to this rule, and that is for those who became disabled and applied for SSDI but then signed up for early SS retirement benefits before their SSDI application is approved. In such an instance, a person will receive SSDI payments along with retirement payments until their full SSDI payment allotment is completed. As an added benefit, a person in this position is entitled to full retirement benefits even though he or she filed for early benefits.

What do I Need to do to Switch from SSDI to Retirement Benefits?

You don’t need to do anything. Social Security will automatically switch your payments from disability payments to retirement payments. 

Will My Income Go Up or Down When I Start Receiving SS Benefits?

Many people worry that they will lose income when they switch from SSDI to SS retirement benefits, as Social Security bases monthly benefit payments on 35 years of earnings. However, this is not the case for recipients of Social Security Disability payments who have worked fewer than 35 years in their lifetime, as Social Security uses a special formula to calculate average monthly earnings for individuals in this category. 

If you are on SSDI payments, Social Security will calculate the number of years you have worked since you were 21 years old and then subtract one-fifth (or 20%) of your total working years or five years from the total, depending on which sum is less. The final sum is the number of years that will be used to calculate both your SSDI and SS payments. Following are two examples of ways in which this formula is used to calculate payments:

John started working when he was 21 years old. He became disabled when he was 41 years old, which means he worked for 20 years. Social Security will subtract 20% of John’s total working years, which comes to four years. John’s SS disability and retirement payments would then be based on fifteen years of earnings.

Trisha, on the other hand, started working when she was 21 years old and became disabled when she was 51 years old. She worked thirty years, so Social Security will subtract 20% from 30, which comes to 6 years. However, the maximum number of years that can be subtracted from one’s working years is five, so Social Security will base Trisha’s payments on 25 years of work history. 

In both of the above examples, Trisha and John would notice no change in the amount of money they receive each month. This holds true for almost all SSDI recipients; however, there are some instances in which a person may more money when on SS retirement benefits than they did when on SSDI. 

Social Security Disability Insurance automatically cuts money from payments when a person on SSDI has received a settlement or won compensation as a result of a lawsuit. This cut does not apply to a person who is on SS retirement benefits. If you have your lump sum payment deferred until after you reach full retirement age, or opt to have the money paid as an annuity rather than immediately, you will earn more money from your settlement even though you have to wait longer to receive it than you would have otherwise. Here is an example to illustrate the point:

Tony is 60 years old, and he is on SSDI payments due to a workplace injury that makes it impossible for him to hold down a job. He wins a settlement from his former employer, which provides him $500,000 in compensation. Once medical costs and legal costs are deducted from this bill, he has $350,000 left. Social Security Disability Insurance would calculate the amount of money he receives each month from the time he received the settlement until he reaches retirement age nearly eight years later. This sum comes to $3,645, which would be subtracted from his SSDI payments each month in most states (in other states, the money is subtracted from the settlement or lawsuit money rather than the SSDI payments).

If Tony does not need the money right away, he could opt to have it deferred until he reaches full retirement age, at which point he could keep all the settlement money without a reduction in his monthly retirement payments. Alternatively, if he needs some of the money right away, he could opt for annuity payments paid over a ten or twenty-year period. In such an instance, SSDI would only calculate the extra income he would receive from now until he reaches full retirement age. Legal and medical expenses from the next eight years are deducted from the bill, which means Tony would not see a significant reduction in his benefits. If, for instance, he opts to have payments of $50,000 a year made over a ten-year period, Social Security would discount $100,000 in payments that are made after Tony reaches full retirement age along with the $150,000 in expenses outlined above, as the money would be spent before Tony’s full retirement age. Instead of a $3,645 reduction in monthly benefits, Tony’s benefits would only be lowered by $2,604 a month.

Are There Limits on Earnings or Additional Income When I Start Receiving SS Retirement Benefits?

When you reach full retirement age, your earnings or additional income won’t impact your benefits no matter how much money you earn. 

Can I Convert My SSDI Payments to Retirement Payments Before I Reach Full Retirement Age?

You cannot convert your Social Security Disability Insurance to retirement benefits before you reach full retirement age. However, you can make the switch from SSDI to retirement benefits at any point after your sixty-second birthday. This switch is not made automatically; you’ll have to apply to stop receiving SSDI benefits and instead receive SS retirement benefits. However, if you switch from SSDI to retirement benefits you could lose up to 28% of your annual income as Social Security reduces retirement benefits for those who apply for early payments. The amount of money you lose depends on when you apply for SS retirement benefits and the age at which you would be considered “full retirement age”. 

Generally speaking, switching from SSDI to SS earlier than necessary is not a smart financial move. However, it can be the best option for people in special circumstances:

• If you are set to receive a lump sum settlement or win a lot of money from a lawsuit, you could lose some or even all your SSDI benefits if you receive immediate payment. In such an instance, switching to SS retirement benefits will enable you to keep your full lump-sum payment even if you do lose some of your SS income as a result. 
• Perhaps you’ve started your own business while on SSDI and the money you’ve earned so far hasn’t impacted your SSDI payments. Now, however, your business is taking off, and you want to keep all your earnings. If so, switching to retirement payments can help you bring in more money per month than you would have otherwise.
• Your wife or child could qualify for a higher benefit rate if you switch from SSDI to retirement benefits. 

The decision to start collecting early benefits is one that will have a lasting impact on your retirement income. Once you’ve applied for Social Security retirement income, you can’t change your mind and defer payments until a later date. This same point applies to the spouse of a person who is SSDI income and who wants to receive early retirement benefits. If you’re thinking about applying for early SS retirement income, it may be wise to schedule a consultation with a disability attorney who specializes in Social Security. 

How are a Spouse’s Social Security Payments Impacted by the Switch to Retirement Income?

In most instances, spousal Social Security payments remain the same once a person who is on SSDI switches to SS retirement payments upon reaching full retirement age. However, if your spouse filed for Social Security retirement benefits before reaching full retirement age, he or she may want to file for spousal benefits once you reach full retirement age and switch from SSDI to SS retirement income. In such an instance, the person who files for spousal benefits could receive the same amount of money as you do. Here is an example that illustrates this point: 

Kathy and Bob are both 62 years old. Bob is on SSDI; Kathy is not. Kathy opts to file for early SS retirement benefits, and currently receives $1,000 a month. When Bob reaches full retirement age, he will receive $1,200 a month. At this point in time. Kathy can file for spousal benefits; then, she will receive $1,200 a month as well. This is the total sum of her monthly SS payment, not a payment added to the previous $1,000 a month she was receiving before applying for spousal benefits.

Alternatively, a person who is on SSDI could switch to spousal benefits if his or her spouse is the one who is set to receive the most money. If Bob, for instance, is currently earning $1,000 a month in SSDI income but Kathy, who reaches full retirement age before he does, would receive $1,500 a month in SS retirement income, Bob could apply to switch from SSDI payments to SS spousal benefits. 

Bear in mind, however, that while a spouse can apply for spousal benefits, he or she cannot switch from spousal benefits to his or her own benefit later on. To use the above example, if Kathy delays her SS retirement until she reaches full retirement age and applies for spousal benefits at this time, she can’t change her mind later and apply for her own benefit at a later date. The amount she receives is permanently connected to her husband’s SSI retirement income permanently. 

A person on Social Security Disability Insurance doesn’t need to do anything to keep the monthly payments coming, as the payments are automatically switched to SS retirement income once a person reaches full retirement age. However, that does not necessarily mean an individual on SSDI should simply sit back and allow the switch to happen in due time.

There are cases when taking action before or even after reaching full retirement age could be in a person’s best interest and enable him or her to receive more monthly income than would otherwise be possible.

If you find the information above doesn’t cover our personal situation, or you feel you qualify for more income than you are currently receiving, seek legal help from a disability lawyer and/or a tax planning professional as soon as possible in order to receive the compensation that is your due.

Continuing to receive Social Security Disability Insurance (SSDI) benefits depends on whether you remain disabled or if your condition improves.

If you receive SSDI benefits, Social Security will periodically conduct a review of your case file to ensure that you still qualify. If your disability might improve, this review happens about every three years. If the expectation is that your disability will not improve, this review happens every seven years.

Suppose your case review finds that your medical condition has not improved sufficiently to allow you to work. In that case, your social security disability benefits will continue until you reach full retirement age. Your full retirement age is when you are 65 to 67 years old, depending on your birth year.

However, if your case review finds that your medical condition improved sufficiently to allow you to perform regular work, then the social security disability payments will stop. If you disagree with the conclusion of your case review, you have the right to appeal the decision.

Here are some frequently asked questions about Social Security disability benefits and retirement:

What is the difference between SSDI and SSI?

Sometimes these two programs, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), are confused with each other. They are both managed by the Social Security Administration, yet are different programs.

Occasionally, you may also see the use of SSI to represent ordinary Social Security income. This alternative use of the acronym is another source of confusion because Social Security income is retirement income. In contrast, Supplemental Security Income is for those with limited resources, not solely retirement income.

Social Security Disability Insurance (SSDI) is an insurance program paid for by the payroll tax deductions for Social Security. The current Social Security tax rate for 2022 is 6.2% paid by the employer and 6.2% paid by the employee, equaling a total of 12.4%. If you have Social Security taxes withheld from your earned income, you will have this insurance coverage.

SSDI payments require SSA approval of disability status, and the amount paid depends on your work history. If you become disabled and qualify for SSDI, you will receive monthly payments that are the same amount as you would get if you were already at full retirement age.

Related Topic:

https://www.everydayresources.com/posts/benefits-and-insurance-for-people-with-disabilities

Supplemental Security Income (SSI) is based on age OR disability and having very limited income and financial resources. SSI does not depend on any work history.

Is it possible to get SSDI and SSI at the same time?

Yes, it is possible to receive payments from both programs if the amounts of both are small enough. SSDI payments cause a reduction in the amount of SSI. If the SSDI payments you receive are high enough, this can disqualify you from getting SSI payments.

SSDI payments are, on average, higher than SSI payments. SSDI payments do not depend on having limited financial resources.

Here are the main differences between SSI and SSDI:

• Eligibility: SSI is available for those 65 or older with or without a disability and at any age for those who are blind or disabled with no work history requirement. SSDI is available for those who are disabled and have sufficient work history to qualify.
• Average Monthly Benefits: SSI payments in 2022, average $604 per month (maximum is $841 for an individual and $1261 for a couple). SSDI payments in 2022, average $1,358 per month with a maximum of $3,345 per month.
• Financial Limits: SSI requires having very limited financial resources (under $2,000 for an individual and $3,000 for a couple) and unearned/earned income limits. For example, under $861 per month for unearned income for an individual and $1,281 for a couple. Higher amounts are allowed under the SSI program for countable earned income. SSDI does not have financial resource limits but has an earned income limit in 2022 of $1,350 per month for those who are disabled but not blind and $2,260 per month for those who are blind.

If you are 65 or older with very limited resources and income, you may qualify for SSI payments without needing to be disabled. You may also be eligible for Medicaid health insurance coverage and the Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps.” Some states supplement the SSI payments to pay higher amounts than the federal payments.

When is the full retirement age for me?

Full retirement age (FRA) increased by law in 1983 from 65 years old up to a maximum of 67 years old now.

FRA depends on the year of your birth, according to this chart:

Year of Birth	Full Retirement Age
1937	65
1938	65 and two months
1939	65 and four months
1940	65 and six months
1941	65 and eight months
1942	65 and ten months
1943 to 1954	66
1955	66 and two months
1956	66 and four months
1957	66 and six months
1958	66 and eight months
1959	66 and ten months
1960 and later	67

The Social Security Administration has a useful online tool to calculate your full retirement age.

How about Medicare at age 65?

When you reach 65, that is still the same year you qualify for Medicare. Be sure to apply for Medicare when you turn 65 to avoid paying the penalty to join later. Medicare Part A is free, and you have options to consider about paying an insurance premium to get Medicare Part B. You may want to consider paid supplemental insurance such as Medicare Advantage programs.

Will my disability payment increase if my disability gets worse as I get older?

No. Your monthly SSDI payment does not change if your condition becomes worse. The benefits are calculated based on your earnings history. The amount of disability payment is the amount you would receive if you were at full retirement age when you became disabled.

The Social Security Administration (SSA) approves a disability claim based on your inability to perform work due to a disability expected to last 12 months or longer or result in death. Approval of disability status is the same as being fully disabled, even if your condition subsequently deteriorates more.

If your condition improves, you must inform the SSA, especially if you can go back to work. You must also undergo a case review about every three years for a disability that might improve and about every seven years for a permanent disability. Losing disability status means your monthly SSDI payments will stop.

What happens with my SSDI when I hit full retirement age?

If you still qualify as disabled, your disability benefits automatically convert to retirement benefits when you reach full retirement age. You need to do nothing as this process happens internally in the Social Security Administration’s system.

Will full retirement age change my benefit amount?

Social Security benefits from disability insurance calculations have the same basis as if the disabled person reached full retirement age when they became disabled. If you become disabled when younger than full retirement age, you can think of this Social Security disability payment as equal to early retirement with full Social Security benefits.

When you reach full retirement age, you qualify for 100% of the retirement benefits even if you are not disabled as long as you have sufficient work history.

Usually, you do not see any change when the SSDI benefits convert to retirement benefits when you reach full retirement age.

It is helpful to check your work history record and see your Social Security deductions taken from your paychecks (and matched by your employer) for each year you earned income. You can do this easily by getting an online MySocialSecurity account.

The same applies to your spouse receiving benefits based on your work record. Those benefits automatically change from disability to retirement benefits when you reach full retirement age. However, if your spouse takes these benefits before your spouse reaches full retirement age, their benefits are lower.

It is helpful to work with a financial professional who understands the Social Security rules to make the best decisions about when to take retirement benefits if you (or your spouse, if you have one) qualify for them.

There is one exception. The exception applies if, in addition to receiving disability benefits, you also receive worker’s compensation payments or another government payment such as public disability benefits from a government job.

Since you do not pay social security taxes on these other disability payments, your disability benefits from Social Security are reduced by them. This reduction ends at full retirement age, so your total benefits would increase when you reach your full Social Security retirement age.

Can I increase my benefits when I reach retirement age?

If you reach retirement age and are still collecting Social Security benefits by receiving SSDI, your benefits cannot increase by taking any action on your part. Your SSDI monthly benefits covert to a retirement benefit for the same amount.

Another automatic change happens if you receive worker’s compensation or public disability benefits from a government job. Before reaching full retirement age, those payments reduce your SSDI benefits. After full retirement age, those reductions are not necessary, so your total monthly benefit payments would increase.

Can I work if I receive SSDI benefits?

When you collect social security disability payments, any earned income may reduce the amount of your monthly benefits. However, when you reach full retirement age, you are no longer hindered by limits on your earned income. After reaching full retirement age, any amount you make from working does not lower your monthly Social Security benefits.

What happens to my benefits when I reach retirement age if I return to work?

If you can work before the full retirement age, there is a possibility of increasing your Social Security retirement benefits. This increase may happen if your earnings improve your Social Security monthly benefits calculations.

The Social Security Administration has a free, voluntary Ticket to Work program that helps disabled people who want to find work. Under this program, it may be possible to test your ability to work for up to nine months without reducing your SSDI benefits.

What’s required for me to make the transition to full retirement?

Transitioning from receiving Social Security disability insurance payment to collecting Social Security retirement benefits is automatic when you reach full retirement age.

Your monthly benefit payments will not change; however, you will no longer be subject to any of the rules for SSI disability payments. You will not need to have any further case reviews after reaching full retirement age. You will still get your monthly payments when you reach retirement age, even if your disability improves.

What about SSD and early retirement?

You cannot take early retirement at age 62 if you receive Social Security disability payments. You would not want to do this because your early retirement payment would be up to 30% lower than the SSDI monthly benefits, which come from the rate calculated for your full retirement payments.

You might only consider changing to early retirement pay if you lose disability status. If you lose your disabled status at age 62, you would have the option to request early retirement payments from Social Security if you qualify for them. Losing your disabled status from a case review at age 62 would be a valid reason to consider early retirement.

Your monthly check from early retirement would be lower than the amount you receive as disability benefits; however, this might be preferable to not receiving any payments. In this circumstance, you would also have the option to wait until full retirement age to receive all your benefits that match the disability payment amount you were getting before you lost your disability status. That wait may be many years.

Additionally, you have the option to delay receiving benefits to age 70 to receive an increased monthly payment from Social Security. Depending on your year of birth, your retirement benefits payments may increase by up to 32% above the full retirement pay. It may be helpful to work with a financial professional to understand these options. The best choice for you depends on your particular circumstances.

How does early retirement impact spousal benefits?

Social Security disability payments come from the amounts projected for your full retirement age. A spousal benefit paid out based on your work history record is not automatically upgraded to the level paid at full retirement age.

If your spouse applies for the spousal benefit before the spouse reaches full retirement age, then benefits will be based on the early retirement amount (up to 30% lower), which is a permanent reduction.

Can I switch from Social Security retirement benefits to Social Security disability benefits?

Yes, it is possible to switch from Social Security retirement benefits to Social Security disability benefits under certain circumstances. Suppose you filed for early retirement benefits and started receiving Social Security payments when you were only 62. Then, you became disabled.

Since you are not yet full retirement age, you may receive a higher payment if you are qualified as disabled. The difference is that disability payments would be at your full retirement age, which are up to 30% higher than early retirement payments.

In this special circumstance, it is worth evaluating if you should apply for disability for the few years between the early retirement age of 62 and your full retirement age based on your birth year that could be from 65 to 67 years old.

If you retire early and then later realize that a medical condition qualifies you for disability benefits, it is possible to claim disability payments retroactively.

Disability claims may take many months, sometimes years, for approval and might face denial. You may want to apply for early retirement benefits while waiting for your disability claim to be approved or denied to have some Social Security income in the meantime.

It is also wise to consider working with a disability attorney for a complex case. A Social Security disability attorney is a specialist in working with Social Security benefits. A disability lawyer may help if your disability claim faces a denial and the decision needs an appeal.

The rules regarding Social Security disability benefits are complex and constantly changing. It is helpful to work with a financial professional who understands the current regulations and check with the Social Security Administration website for the most recent information about Social Security disability benefits.

Children who have a disability that renders them unable to work may be eligible for Social Security disability benefits under special provisions. The benefits they might qualify for are Supplemental Security Income (SSI) payments, which are income-restricted.

What Are the Medical Qualifications for Children to Receive SSI Payments?

Supplemental Security Income payments are different from welfare, and one of the major differences is the medical requirement. Children are only eligible for SSI payments if they suffer from a disabling medical condition that causes “marked and severe functional limitations.” The medical condition must have resulted in disabling functional limitations for at least 12 months, or the condition must be terminal.

Medical professionals and a Social Security disability attorney can help determine whether a child’s condition meets the medical qualifications for SSI.

What Are the Income Limits for Social Security Disability for a Child?

Financial qualifications apply both to a child’s earnings and their family’s income. In order to qualify for Social Security Disability through Supplemental Security Income, both income limits must be met.

What Income Limits Apply to Disability Benefits for a Child?

The child themselves generally cannot earn more than $1,350 per month, and the calculations are on a month-to-month rather than an annual basis. Their income can’t be more than $2,260 if they are blind. The federal government recognizes blindness as a uniquely challenging disability in such a visually oriented world, and thus allows blind children and adults higher income limits.

As far as the child’s income limit is concerned, the $1,350 (or $2,260) monthly maximum takes into account only income that’s earned from “substantial gainful activity” — work. Children who are fortunate to receive earnings from investments, interest or other assets usually don’t have to include these when calculating their individual income. All income must be included in the family calculations, however.

(All figures provided are for 2022. Figures vary slightly from year to year, most often increasing a nominal amount.)

What Family Income Limits Apply to Disability Benefits for a Child?

Family income limit calculations primarily focus on the parents’ income, for parents are typically the ones who claim their child as a dependent. They also have the highest incomes within a family in the vast majority of cases.

The Social Security Administration takes into account both the patients earned income (from substantial gainful activity) and unearned income (from non-work sources). 

Parents’ income is likewise considered on a monthly rather than annual basis. Adding up all income within a month is a fairly straightforward process, even if doing so requires checking income from many sources. 

Child Benefit Standard Calculation

The gross income isn’t what the SSA looks at, though. Several numbers are subtracted from the parents’ gross income:

1. Government Payments: All income earned through government programs (e.g. food stamps, welfare, stimulus checks, etc.) is subtracted. SSA benefits such as SSDI are one government program that doesn’t get subtracted.
2. Tax Refunds: Any federal or state tax refunds are subtracted (including advance payments for the Child Tax Credit). This keeps refunds from messing up income limits in any one month.
3. A flat amount of $397 is subtracted for each non-disabled child in the family. This is subtracted first from non-earned income, and then from earned income once non-earned has been exhausted. It’s the same amount as the difference between individual and couple SSI limits.
4. A flat amount of $20 is subtracted (regardless of whether there are one or two parental income earners). This again is subtracted from non-earned income if available.
5. A flat amount of $65 is subtracted. This is subtracted from earned income, regardless of whether any non-earned remains.
6. The total earned income at this point is reduced by 50 percent, halving the amount of income from actual work.
7. The SSI benefit rate for the parents is subtracted from non-earned and earned income remaining. This is $794 for children who live with a single parent, and $1,191 for children who live with both parents/a parent and a stepparent.
8. The remaining earned and non-earned parent income is then divided equally among all disabled children in the household. The entire amount is attributed to the child if they’re the only child in the family who is disabled. The amount is proportionally deemed if there are multiple disabled children.

Approval and Allowance Calculation

The resulting amount that’s deemed to the child must not exceed the individual maximum income of $1,350 (or $2,260). This amount is added to any earned income that the child personally receives when checking the maximum allowances.

The child should be approved for Supplemental Security Income if their earned and deemed income is less than the maximum. 

Cash benefits payments are normally made immediately if the child suffers from total blindness, total deafness, muscular dystrophy, cerebral palsy, severe intellectual disability (for children 4 or older), symptomatic HIV, down syndrome, and birth weight less than 2 pounds 10 ounces (for children 3 or younger). Any other medical condition can take three to five months to review before payments are made.

A review is conducted at least every three years, or more often in some cases.

Child Benefits With Child Support Calculations

For parents who receive child support, one-third or the payments received are included in the parents’ income when calculating SSI eligibility for a child. Thus, the child support received within a month should be divided by 3 before adding it to income.

This is included before anything is subtracted, and thus is subject to the flat amount deductions, halving and non-disabled child deductions as noted above.

Child Benefits Received from Disabled Parents’ Calculations

Any Social Security Disability Income (SSDI) or Supplemental Security Income (SSI) payments that parents receive are included as normal parent income for the purposes of calculations.

SSDI/SSI payments are included at the full amount received (and not divided by 3), but they are subject to the flat amount deductions, halving and non-disabled child deductions noted.

Child Benefits With Alimony Calculations

Alimony is included as parent income when determining eligibility. Unlike child support, it’s included at the full amount received. Alimony is still subject to the flat amount deductions, halving and non-disabled child deduction, though.

Child Benefits for Disabled Children in Medical Facilities

For disabled children who are in a medical facility that health insurance pays for, SSI benefits are normally set at $30. This assumes that the child’s income qualifies, of course.

How Deeming Affects a Child’s Eligibility for SSD Benefits

The amount that remains after all of the calculations have been completed gets assigned to the disabled child. The assigning is referred to as “deeming.”

Any deemed money is considered income for the child, and gets added to any earned income that they have. The total amount is then used to determine eligibility, with the child receiving SSI benefits if the amount is under the maximum allowance (provided their medical condition qualifies). 

Again, the maximum disability determination allowance is $1,350 for most disabilities and $2,260 for complete blindness. This is for each disabled child within a family.

Get Help Navigating SSI Benefits for a Disabled Child

As this rather lengthy explanation shows, the income eligibility calculations required for a disabled child to receive Supplemental Security Income payments are lengthy and involved. All income sources must be correctly tabulated, and then all applicable deductions must be taken.

Because this process is complex, parents should consult a knowledgeable Social Security Disability attorney for assistance with determining eligibility. Eligibility must not only be calculated correctly to determine qualification, but also so there are no delays or other issues due to inaccurate calculations. An SSDI attorney will be familiar with these calculations, having done disability benefits calculations many times. 

Of course, an attorney can also assist with determining whether a medical condition qualifies. Contact an attorney now for a consultation, so you can apply and begin receiving payments as quickly as possible.