Understanding Disability Income Limits
When it comes to disability, one of the most common questions people have is, “How much money are you allowed to make on disability?” This question is crucial for individuals who are considering applying for disability benefits or who are already receiving them. The answer to this question can vary depending on several factors, including the type of disability, the source of the disability benefits, and the individual’s specific circumstances.
Types of Disability Benefits
There are several types of disability benefits available, and each has its own set of rules regarding income limits. The most common types include Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and private disability insurance.
SSDI is a federal insurance program that provides benefits to individuals who have worked and paid into the Social Security system. To qualify for SSDI, you must have a medical condition that meets the SSA’s definition of disability and have earned enough work credits. The income limits for SSDI are quite generous. For the year 2023, the limit is $1,350 per month for individuals who are blind and $1,350 per month for individuals who are not blind. However, there is also an earnings test that applies to SSDI beneficiaries who are under full retirement age. If you earn more than $1,910 per month in 2023, your SSDI benefits may be reduced.
SSI is a needs-based program that provides monthly payments to individuals who are disabled, blind, or aged, and have limited income and resources. The income limits for SSI are quite strict. For 2023, the federal benefit rate for an individual is $841 per month, and the income limit is set at $2,000 per month for individuals and $3,000 per month for couples. This limit includes all income, including wages, rental income, and any other forms of monetary support.
Private disability insurance policies can vary widely in terms of income limits. Some policies may have a cap on the amount of income you can earn while still receiving benefits, while others may have no income limit at all. It’s important to review your specific policy to understand the details of your coverage.
Earnings Limits for SSDI Beneficiaries
For SSDI beneficiaries who are under full retirement age, there is an earnings limit that applies. This limit is adjusted each year to account for changes in the average wage index. For 2023, the limit is $1,910 per month. If you earn more than this amount, your SSDI benefits will be reduced dollar for dollar. However, once you reach full retirement age, there is no longer an earnings limit, and you can earn as much as you want without affecting your SSDI benefits.
Earnings Limits for SSI Beneficiaries
SSI beneficiaries are subject to an earnings limit, but it’s important to note that this limit is not the same as the income limit. For SSI beneficiaries, the earnings limit is $89 per month for individuals and $174 per month for couples. If you earn more than this amount, your SSI benefits may be reduced or suspended. However, there is a nine-month trial work period during which you can earn as much as you want without affecting your SSI benefits.
Impact of Work on Disability Benefits
It’s important to understand that working while receiving disability benefits can have a significant impact on your eligibility and the amount of benefits you receive. For SSDI beneficiaries, if you earn more than the earnings limit, your benefits may be reduced or suspended. However, if you return to work and your earnings are below the substantial gainful activity (SGA) level, you may still be eligible for SSDI benefits. The SGA level for 2023 is $1,350 per month for individuals who are not blind and $2,260 per month for individuals who are blind.
For SSI beneficiaries, if you earn more than the earnings limit, your SSI benefits may be reduced or suspended. However, if you return to work and your earnings are below the SGA level, you may still be eligible for SSI benefits. It’s important to note that SSI benefits can be restored if your earnings drop below the SGA level.
Conclusion
Understanding how much money you are allowed to make on disability is crucial for individuals who are considering applying for disability benefits or who are already receiving them. The income limits for SSDI, SSI, and private disability insurance can vary widely, and it’s important to review your specific policy and the rules that apply to your situation. By understanding these rules, you can make informed decisions about your financial future and ensure that you are maximizing your