What Types of Income Do You Have to Report to Social Security?

Qualifying for Social Security Disability (SSD or SSDI) benefits means you met the government’s definition of a disabled worker because you suffer from any medically determinable physical or mental impairment that prevents you from performing a substantial gainful activity, what they call an “SGA.”

What is an SGA? — The SGA is a monthly income level the Social Security Administration (SSA) sets to determine who qualifies as disabled and who does not. If you can earn more than the income limit, then you are ineligible for SSD benefits.

Our team of experienced SSD lawyers at Scully Disability specializes in representing disabled workers and needy residents of Northwest Indiana and Chicagoland. We will help you understand the rules that govern working while you receive SSDI or SSI benefits. At Scully Disability, we devoted our legal careers to mastering Social Security Disability law and fighting to win our disabled clients all the SSD and SSI benefits they deserve.

SSD Benefits Monthly Income Limit

In 2021, the Social Security Administration’s threshold earnings amount is $1,310 per month. The level is higher for blind SSD recipients; their level is $2,190. In 2022, the monthly income limit will be $1,350 for most SSD recipients and $2,260 for blind SSD recipients.

Penalty for Failing to Report — Every person receiving SSD or SSI benefits is required to report their income to the SSA. Failure to report accurate, up-to-date income information without justification can lead to “penalty deductions” that can amount to a suspension of your benefits. For a first unjustified failure to accurately report your income to SSD, a penalty equal to your benefit for the last month you were eligible can be imposed. That essentially means you lose one month’s benefit. A second offense can bring a penalty equal to two months’ benefits, and a third or subsequent failure can result in a three-month benefit penalty.

Changes Required to Be Reported for SSDI

The amount of your earnings is not the only item that must be reported to the SSA to continue to receive your SSDI benefits. You also need to notify the SSD program when any of these events occur:

• you begin work
• the hourly rate you earn
• the number of hours you regularly work
• any change in your pay rate or your number of hours worked
• when your job ends, or you leave the job
• when you start a new job

Income You Are Required to Report

There are two kinds of income you are required to report to the SSD benefits program, earned income and unearned income.

• Earned income is any money you receive in exchange for work you performed, whether you work for an employer or you are self-employed. The income must be reported each month, even if there are no changes.
• Unearned income is money you receive that is not in exchange for work.

These sources of income include the following:

• workers’ compensation
• other public disability benefits
• sick pay
• vacation pay
• pensions from jobs that did not pay into Social Security

Reporting Income Does Not Always Reduce Your SSD Benefits

Reporting your income does not automatically lead to a reduction in your SSD benefits. Many sources of income are exempt from the list of income that will lower your SSD benefits.

The reduction in SSD benefits is intended to prevent SSD benefits recipients from being paid twice for the same loss. For example, if you are receiving workers’ compensation, you are already being paid for the disability-related lost wages. Collecting from SSD for the same disability would be double-dipping. However, if you are paid by a private disability insurance policy or a personal injury settlement, the Social Security Administration does not reduce your SSD benefits.

Expert SSDI lawyers at Scully Disability will evaluate your case free of any costs or obligations.

Report Disability-Related Expenses to SSD (Allow Higher Earnings)

Remember that the 2021 monthly limit on SSD recipients’ earnings is $1,310. But if you incur expenses at work related to your disability, those expenses can be deducted from your income. For example, if you pay for special equipment or assistance to enable you to work, those costs will not be counted against the monthly income cap.

Trial Work Period — The Trial Work Period (TWP) is a special program within the SSD plan that allows SSD recipients to work and earn more than the monthly income limit and still get their full SSD benefit. The program is intended to encourage disabled workers to test whether they can successfully return to work. The TWP program allows you to earn as much as you can for nine months without a benefit reduction. Each month you earn more than $940 counts as one of your nine TWP allowed months. Those months need not be consecutive but must be within five years.

Outside of the Trial Work Period program, reporting countable income exceeding the monthly cap will result in a finding that you are not disabled. However, you remain qualified to again receive SSD benefits if your income falls beneath the earnings cap.