Disability benefits aren’t necessarily meant to support you forever. If improved health or workplace adaptations make it possible for you to return to work, the Social Security Administration (SSA) wants to help you do that. Work incentives are SSA programs and policies that let you test the waters and explore your earning potential without putting your benefits at risk.
You are permitted to work while collecting disability benefits, but Social Security limits the amount you can earn. If you are receiving Social Security Disability Insurance (SSDI), payments can end if you engage in what the SSA deems “substantial gainful activity” (SGA). In 2022, that’s work that pays more than $1,350 per month ($2,260 per month for the statutorily blind).
You can also work and collect Supplemental Security Income (SSI), a safety-net benefit for older, disabled and blind people with limited means, though you must adhere to a complex set of income rules. In 2022, you can lose SSI if you earn more than $1,767 a month from work. (The cap may be different if you also have income from nonwork sources, such as investments or government benefits.) If you earn less, your payments can continue but might be reduced.
Some work incentives allow you to keep your disability benefits even if your earnings exceed the caps. Others preserve access to health care coverage when you return to work or make it easier to start benefits again if necessary. Particular programs may be open only to SSI or SSDI recipients, or to both. Here’s a roundup of available incentives.
SSDI/SSI work incentives
Ticket to Work
The Ticket to Work program features a network of organizations that have an agreement with Social Security to provide employment services to people with disabilities. While participating in the program, you can continue to receive benefits and may not have to undergo a continuing disability review.
Say your disability benefits ended because your earnings exceeded the SSA’s limit. If your work income drops back below the cap within five years, you may be able to resume benefits without filing a new application. You must still have the same impairment that made you eligible for benefits to begin with, or a closely related condition.
Unsuccessful work attempt
Social Security considers a work attempt unsuccessful if, within six months of starting:
- You have to stop work because of your medical condition.
- Your earnings drop below the SGA level because of your medical condition.
The SSA does not count income from an unsuccessful work attempt in making an initial determination of eligibility for SSDI or SSI (that is, in evaluating an application for those benefits) or in determining continued eligibility for SSDI.
Impairment-related work expenses (IRWE)
If you need to purchase certain items to perform work duties — for example, a wheelchair, service animal or paratransit pass — those costs can be deducted from your income to help you remain eligible for benefits. To qualify as an IRWE, the cost can’t be covered by another source such Medicare or private insurance.
Subsidy and special conditions
Sometimes employers or vocational organizations offer financial support or other help to someone with a disability who is returning to work, such as longer paid breaks or a mentor to help them complete tasks. If this support is included in your paycheck, the SSA doesn’t count it in determining benefit eligibility. It only counts earnings that represent the “actual value” of the work you do.
Continued payment under vocational rehabilitation or similar program
If you are participating in a vocational rehabilitation program or something similar, the SSA won’t abruptly stop your benefits if your medical condition changes and you are no longer considered disabled.
Instead, payments will continue until the rehabilitation program ends, provided that you started it before your disability ended and Social Security decides continuing will lessen your chances of needing disability benefits in the future.
Plans to Achieve Self-Support (PASS)
A PASS is an SSA-approved plan to achieve a specific professional goal within a set time period. If you use income from SSDI or other sources to pursue that goal — say, for education or child care — that income can be excluded from your SSI benefit calculation.
In addition, money you set aside for a PASS does not count against Social Security’s strict limits on savings and other financial assets for SSI recipients.
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SSDI-only work incentives
Trial work period (TWP)
SSDI recipients can earn any amount from work during nine months over a five-year period without losing benefits. The months don’t have to be consecutive. The TWP ends once you’ve completed nine “service months” — in 2022, that’s a month in which you earn more than $970 before taxes or work more than 80 hours in self-employment.
Extended period of eligibility
This incentive kicks in after your trial work period ends. An extended period of eligibility lasts for three years, during which Social Security will continue to pay your SSDI benefit in months when you earn less than the SGA cap, as long as you still have the same disability that made you eligible for benefits in the first place.
Unincurred business expenses
If you are self-employed and receive business support such as donated supplies or unpaid administrative services from an individual or organization, it may qualify as an unincurred business expense. Social Security deducts the value of such support from your net income in determining whether you are over the SGA cap.
Continuation of Medicare coverage
SSDI recipients are eligible for Medicare, usually starting two years after they become entitled to disability benefits. If your SSDI ends because you earn too much from work, you can stay on Medicare for up to seven years and nine months past the end of your trial work period. Medicare Part A (hospitalization insurance) remains premium-free during this period.
Medicare for people with disabilities who work
When the premium-free period ends, you can buy Medicare, and in most cases get a discount on Part A premiums, if you remain medically disabled but ineligible for benefits due to work income.
SSI-only work incentives
Earned income exclusion
Social Security does not include all earnings when calculating your SSI benefit. Under the earned income exclusion, it discounts the first $65 you make from work each month and one-half of the remaining earnings. There’s a separate SSI income exclusion for students under the age of 22.
Special SSI payments for persons who work
This incentive comes under Section 1619 of the Social Security Act, which allows people getting SSI on the basis of a disability to continue drawing benefits if their work income exceeds the substantial gainful activity cap. To qualify for special payments, you must still be disabled, meet all other SSI eligibility rules and have been eligible for SSI at least one month before you started earning SGA-level wages.
Reinstating SSI eligibility without a new application
If your payments ended because of work earnings but your income subsequently drops back below the SSI cap, you may be able to get benefits restarted without filing a new application.
Along the same lines, if your SSI benefits or Medicaid coverage ended for any reason other than work earnings or medical recovery, you may be able to restart payments without filing an application within a year of the termination of benefits.
Special benefits if you are eligible under 1619
Typically, if you enter a public nursing home, hospital or psychiatric facility, or one where Medicaid pays more than half of your costs, SSI payments are cut off or severely curtailed. However, if you are working and eligible for SSI under Section 1619, you may receive your full cash benefits for up to two months after you’re admitted.
Medicaid while working
SSI recipients are automatically eligible for Medicaid in most states. If you lose SSI due to your work earnings, you may be able to stay on Medicaid as long as you meet all other SSI eligibility requirements, are still medically disabled and would need Medicaid in order to work. You may not qualify for this incentive if your gross income is high enough to replace both SSI and Medicaid benefits.
Published February 4, 2022