If an illness or injury leaves you unable to work for an extended period, your income is almost certain to take a hit. And years with little or no income can reduce or even eliminate future Social Security retirement benefits, which are based on your lifetime earnings history.
That’s why the Social Security Administration (SSA) instituted a mechanism called a “disability freeze,” which mitigates the impact of a disability today on your benefit tomorrow.
A disability freeze stops Social Security from counting your income during the years in which a medical condition restricts your ability to work. Those years are not included in your benefit calculation, so you won’t be penalized for a period when you are unable to work.
How a disability freeze works
To understand how a freeze works, it helps to know the basics of how retirement benefits are calculated. Social Security takes your 35 highest-earning years, adjusts them for historical wage growth and derives an average monthly income. (The SSA only factors in income up to an annually adjusted cap, which in 2021 is $142,800.)
Social Security then applies a formula to that monthly average to determine your basic benefit — the amount you are eligible for if you claim it at full retirement age (66 and 2 months for people born in 1955 and gradually rising to 67 for people born in or after 1960). If you qualify for Social Security Disability Insurance (SSDI), your highest-earning years are also used to calculate those payments.
Higher-earning years lead to a higher benefit. By the same token, years of disability could bring down your benefit, because you would likely not be earning much during that time. Even if you do continue to work, Social Security sets strict limits on how much you can earn and still collect SSDI (unless you are taking part in an SSA incentive program to transition back into the workforce).
Since your work history is also a factor in whether you qualify for benefits in the first place, a long period on disability can jeopardize your eligibility for retirement payments.
The disability freeze ensures you won’t pay a price in future benefits for those years of little or no income. In most cases, you qualify for a freeze if you meet these criteria.
- You have worked enough and paid enough in Social Security taxes to qualify for SSDI.
- You have applied for SSDI, either during a period of disability or no more than 12 months after the disability ended (meaning the SSA determined you can again work). In the latter case, the freeze would cover the prior period, when you were unable to work.
- You meet (or met) Social Security’s definition of a disability: a medical condition that prevents you from doing most work for at least one year or will result in death.
If your SSDI claim is approved, the SSA will automatically apply the freeze from your “onset date” — the date it determines you became disabled, based on the medical evidence you provided. The freeze terminates two calendar months after the month in which your disability ends or in the month before you reach full retirement age, whichever comes first.
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Keep in mind
- You may qualify for a disability freeze even if you cannot receive SSDI, in very limited circumstances — for example, if you are statutorily blind but earning above the SSA’s income limit, or if you work for the U.S. railroad system, which has its own disability benefit program.
- A disability freeze is not available to those who collect Supplemental Security Income (SSI), the other SSA-administered benefit for people with disabilities. Unlike with SSDI, eligibility for SSI is not based on your work or earnings history.
Published October 13, 2021