Disability Benefits and Reporting Income Changes to Social Security

If you are receiving disability benefits from the Social Security Administration through either Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), you may not realize how important it is to advise the Social Security Administration (SSA) of any changes in your income or living circumstances. Changes in income and other assets and resources may impact the amount of benefits you receive, and failing to report any changes may jeopardize your eligibility for benefits.

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If you are receiving disability benefits you may not realize how important it is to advise the SSA of any changes in your income or living circumstances. Changes may impact the amount of your disability benefits, and not reporting changes may even jeopardize your eligibility for benefits.

There are different types of income which must be reported to Social Security depending on whether you receive SSI or SSDI, and there is some income that you don’t need to report.

The SSA is concerned with four types of income:

•    Earned Income. This includes wages you are paid by an employer, self-employment income and royalties (for example, payment from patents or copyrights).
•   Unearned income. This income includes pensions, unemployment benefits, Social Security retirement, dividends, interest and gifts of cash.
•    In-kind income. In-kind income is payment a person receives in some form other than cash; for example, if a person receives food and shelter they do not pay for from a relative or friend.
•    Deemed income. This is the portion of income earned by a spouse, parent(s) or sponsor that Social Security uses to calculate the amount of SSI benefit a person is granted.

People receiving SSDI are unable to work full-time at any job.

However, they may have other sources of income and, if their medical condition improves, they may be able to begin working on a limited basis. If you are receiving SSDI, you are not required to report unearned income to Social Security, but you must notify Social Security if you start or stop work and you must report any wages you earned through an employer or income received from self-employment.

Additionally, you must report the following:

•   Disability payments you receive through a state program;
•    Workers Compensation benefits;
•   Pensions from work not covered by Social Security such as federal civil service, foreign government jobs, state and local pension systems.
•   Sick pay; and
•   Vacation pay.

Although Social Security does not limit unearned income under SSDI, the amount of wages you earn can impact the amount of your benefit as well as your eligibility to receive benefits.

You cannot earn more than Substantial Gainful Activity ($1,550 per month or $2,590 if blind in 2024). Your benefit may be reduced by the amount of wages you earn, and if you are earning more than $1,550, Social Security may decide you are not disabled.

If you have been denied disability don’t give up! Contact a Disability lawyer at 512-454-4000 for a free consultation and get the benefits you deserve.

You should also notify Social Security if you get married or divorced.

Because SSDI benefits are earned by paying into the Social Security system via payroll deductions, to be eligible for SSDI benefits, you must have accrued enough “work credits” to be covered. If you are a disabled worker receiving Social Security disability benefits under your own work record, getting married will not affect your benefit payments. But, if you receive benefits based on someone else’s work record, for example, a spouse, deceased spouse, ex-spouse or parent, you may lose your benefits by getting married, depending on your relationship to the person on whose record you collect Social Security benefits.

If you are receiving disability benefits through Supplemental Security Income, your reporting requirements are a little different.

The SSI program provides benefits to blind and disabled people whose income and financial resources are limited. SSI differs from SSDI in that SSDI applicants must have worked in jobs that paid taxes into the Social Security system to be eligible, while adults and children who have never held a job may qualify for SSI. Social Security requires SSI recipients to report all four types of income: earned income, unearned income, in-kind income, and deemed income. However, not everything is considered income for SSI reporting purposes. For example, if someone pays your medical bills, that is not considered income. The exclusions are complicated and it’s best to consult with an attorney or Social Security disability advocate regarding your personal situation.

The following are examples of income that can be excluded from countable income:

•    The first $65 per month of earned income and one-half of wages over $65.
•   The first $20 of earned or unearned income. This amount can be combined with the $65 exclusion listed above.
•    Income tax refunds.
•   Money received as a loan to be repaid.
•   Wages that go toward special impairment-related work expenses (IRWE) for disabled persons or blind persons (BWE). These are items or services you need for work because of your disability, such as medicine, wheelchairs, and transportation expenses.
•   Income set aside or being used to pursue a plan for achieving self-support by a disabled or blind individual.
•   Rent subsidies and home energy assistance.
•   Food stamps.
•   Reimbursement of expenses from social services agencies.

In addition to income, SSI beneficiaries should also report changes in their living arrangements.

You should notify Social Security if any of the following occurs:

•    Your marital status changes. If you get married, a portion of your spouse’s income and assets will be “deemed”, or counted as yours, including earnings from working, SSDI payments, and other types of income.
•    The number of people you live with changes, for example if someone in your household marries, dies or has a baby. This impacts how much in-kind income you have.
•    If your living arrangements change; for example, if you move into (or out of) a nursing home or a group home.
•    Changes in your income or spouse’s income.
•    If your resources or assets change. An SSI recipient can only have $2,000 in resources, if single, and $3,000 if married. Cash, checking and savings accounts, stocks and bonds are all considered assets.

Any changes in income must be reported to the Social Security Administration immediately, no later than 10 days after the end of the month in which the change occurred to avoid overpayment of benefits and penalties.

If you receive an overpayment, you will have to pay back the money you received, even if you have already spent that money. You will receive a notice explaining why you have been overpaid, your repayment options and your right to appeal.

If you receive SSDI, Social Security will withhold the full amount of your benefit until the overpayment is paid back, beginning 30 days after receipt of the overpayment notice.

You may request that a smaller amount be deducted, but the request must be approved by SSA. If you receive benefits through SSI, 10% will be withheld from your benefit until paid. You may request more or less to be withheld, but again, the request must be approved by SSA. If you are no longer receiving benefits, you must send Social Security a check for the full amount within 30 days of the notice or call Social Security to set up a monthly payment plan.

Beneficiaries can also be penalized for failure to report changes in income by reducing monthly payments.

These reductions range from $25 to $100. If SSA finds that you deliberately withheld information or provided inaccurate information, benefits will be stopped for six months. A second violation will result in stopping payments for 12 months and a third for 24 months. Penalties for fraud can include imprisonment.

Failure to report Social Security income is a serious matter and you could lose your benefits. If you receive Social Security Disability income or Supplemental Security Income and are confused about reporting requirements, you should contact the Social Security Administration who can advise you about your personal situation.

Author: Attorney Greg Reed has been practicing law for 29 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion Gold rated by Martindale Hubbell. Through his extensive litigation Mr. Reed obtained board certification from the Texas Board of Legal Specialization. Greg is admitted to practice in the United States District Court - all Texas Districts and the United States Court of Appeals-Fifth Circuit. Mr. Reed is a member of the Travis County Bar Association, Texas Trial Lawyers Association, past Director of the Capital Area Trial Lawyers Association, and an Associate member of the American Board of Trial Advocates. Mr. Reed and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.