Individuals with disabilities and their families often worry about the effect that the individual’s working will have on government benefits. Holding a job—aside from delivering a paycheck—is an important route to independence and self-esteem. On the other hand, disability cash benefits such as SSDI (Social Security Disability Insurance) and SSI (Supplemental Security Income) may be key to the person’s financial security. The rules are complex. Check out state agencies and non-profits that work with individuals with special needs to find and keep employment, while preserving their public benefits when possible.
If individuals are getting disability benefits from the SSDI program or Child Disability Benefit (CDB) program (available to an adult child if a parent, having paid into Social Security, is either retired, disabled or deceased), they can lose their cash benefit if their net monthly wages equal or exceed $1000. This amount is called Substantial Gainful Activity or SGA. The amount will go up to $1,010 in 2012 and the SGA amount for the disability of blindness is $1,640. If net wages are below the SGA amount the individual can keep the wages and continue to receive the cash disability benefit. Job-related expenses paid out of pocket by the worker such as a communications device or gas for the commute to work may be valid deductions from gross wages. Wages can also be reduced if the employer, government agencies, or other individuals provide services or subsidies to enable the person to work. Employers can file reports that detail outlays for necessary accommodations or other subsidies in order to further refine reported income. The same applies to the expense of a job coach who may be provided by a social service agency.
The rules for how earnings affect benefits differ with the SSI program. Depending upon whether the individual has other sources of income, the first $65-$85 of monthly earned income is disregarded. After that, SSI payments will be reduced by one dollar for every two dollars earned. There are a few additional exclusions from countable earnings but, as a general rule, earnings offset and reduce the SSI cash benefit. The SSI program does not look at whether earnings are above or below the SGA limit. At some point, the SSI benefit can be reduced to zero if the earnings are high enough.
Then there’s the question of health benefits. Individuals receiving SSDI or CDB receive Medicaid health insurance after two years. SSI recipients receive Medicaid as their health insurance. If a person loses the SSDI or CDB cash benefit because of earnings, Medicare coverage continues for 93 months, after which the individual has the option to pay for Medicare coverage. If individuals lose SSI cash benefits solely because of earnings, they can remain eligible for Medicaid in most cases, as long as the disabling medical condition continues and assets remain below the Medicaid asset limits.
While each situation is unique, it’s generally a very good thing when an individual with disabilities receives a job offer. Do your research, reach out to advocates and encourage your loved one to seize employment opportunities whenever possible.