The Social Security Administration pays disability benefits to millions of American nationwide who have long-term disabilities and cannot work. When you are healthy enough to return to employment, you are able to earn an income and still maintain your disability benefits. However, your earnings can cause the SSA to stop paying benefits if it exceeds certain limits.
Information About Social Security Disability
Disability is one of three programs available to you from the SSA, along with retirement and survivor benefits. As of March 2011, more than 43 million people in the United States are receiving one of the three SSA benefits. Your benefits are based on your lifetime earnings and payments are made once a month. Being accepted for disability coverage is very hard; only 40 percent of first-time applicants are accepted by the SSA, according to the Life and Health Insurance Foundation for Education.
How Do You Obtain SSA Disability Coverage
To qualify for SSA disability benefits, you must have medical conditions that are scheduled to last longer than a year and prevent you from working or adjusting to other types of employment. If the sight in your better eye cannot be corrected to better than 20/200 or your field vision is less than 20 degrees, you are considered blind or to have low vision and both are qualifying impairments. You also must have accrued enough work credits according to your age and paid into Social Security when you worked. You need 40 work credits to qualify, with a credit earned for every $1,120 you make in one year. A maximum of four can be earned yearly. Younger workers with disabilities can qualify with fewer credits.
You are able to earn an income while receiving SSA Disability benefits through work incentives. The federal agency provides two periods for you to test your work ability after recovering from your disability. During this time you are able to receive full disability benefits. You are first given a trial period which last 60 months. You complete your trial period once you accumulate nine qualifying months. A qualifying month is when you earn $720, or work 80 hours in your business. After your trial period, you are given an extended period of eligibility. This period lasts for 36 months. However, your income from work factors into your benefit payments during this period; if your earnings for a month exceed $1,000 -- $1,640 if you’re blind -- you won’t receive SSA Disability benefits.
The amount of money you make affects the taxability of your SSA Benefits, which are paid out tax-free. If your wages and any other taxable compensation you have combined with your disability payments exceed the program’s limits, the Internal Revenue Service will tax your benefits at normal income tax rates. For example, the IRS taxes 50 percent of your SSA Benefits if your total income tops $25,000 and 85 percent if it is over $34,000. If your married and your total household incomes surpass $32,000 and $44,000, the IRS taxes 50 and 85 percent of your SSA Disability payments, respectively.
- Social Security Online; Atlanta Region; February 2011
- Social Security Online; Special Rules For People Who Are Blind; January 2011
- Social Security Online; How Much Work Do You Need?; January 2011
- Social Security Online; Working While Disabled—How We Can Help; January 2011
- Social Security Online; Taxes and Your Social Security Benefits; February 2011
- Jupiterimages/Photos.com/Getty Images