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Social Security Disability Insurance (SSDI) encourages people to return to work by providing incentives including creating a Trial Work Period during which there is no limit on the amount of money you can earn while still receiving your SSDI benefits including Medicare

  • The Trial Work Period lasts for 9 months, which are not necessarily consecutive (one after the other.) This period is easily renewable to up to 12 months. Plus there is a program known as Extended Period of Disability that extends some benefits beyond 12 months.
  • Additional incentives to return to work include not counting a substantial portion of so-called subsidized earnings, deducting certain work related expenses  (IRWE) and allowing savings accounts that can lead to future work (PASS Accounts) and a program that includes vocational retraining (TWWIIA).
  • Social Security is not allowed to use your attempt to return to work as the basis for classifying you as no longer disabled. Your disability status must still be determined on the basis of your medical records alone.
  • Social Security works to be helpful if the return to work isn't successful. For instance, benefits continue if it turns out you are unable to work.
  • If you are receiving Medicare because of SSDI, it also continues under a program known as TWWIIA, which is pronounced like "Twee -- uh."
  • Problems can arise when Social Security continues to pay benefits after your eligibility to receive them has stopped. Once Social Security catches up, they will want a refund, often catching people unaware. You can avoid a problem by knowing the rules and by keeping your own records when you return to work.

For additional information, see:

Note: Supplemental Security Income (SSI) work incentive programs are different from SSDI. For information on SSI's work incentives see SSI: Return To Work Incentives.

Before You Return To Work While Receiving An Income From SSDI

  • Make sure you understand the impact returning to work will have on your government and private benefits.
  • Volunteering can be a good way to test your readiness to return to work, sharpen or learn new skills, fill a gap in a resume, or even find a job.
  • Education (such as taking a course or obtaining a new degree), may help you prepare to return to work.
  • Vocational Rehabilitation may help update your skills or provide assistance if you need it to return to work.

For more information, see Return to Work, and Returning to Work, Impact on Your Benefits.

If you try to work, it is important to do the following:

  • Tell Social Security. You don't want Social Security to find out on its own that you returned to work. Social Security will learn about it through computerized quaterly employment tax records provided by the Internal Revenue Service. The government is on to tricks to hide working like setting up corporations or other entities, or working off-the-books, or under some one else's Social Security number. The penalties can be severe. See Sample Letter To Social Security Informing Of Your Intent To Return To Work.
  • Track your income and expenses and other information that will be requested in Work Activity Reports for employees and for self-employed people. It is far easier to put this information together while you are working than to try to reconstruct it later.  To learn more, see: Trial Work Period.
  • Submit pay stubs to Social Security.

Steps To Take If You Return To Work While Receiving Income From SSDI

Keep track of your Trial Work Months as you use them.

Social Security is slow to process income data, so your Trial Work Months may expire well before Social Security realizes it. If they keep sending you payments after the expiration of your Trial Work Period, plus the three extra months to which you are entitled, Social Security will want that money back. If you remain aware of this situation and set the extra money aside, repayment won't be so painful. If you put the money into an interest bearing account, you may even earn a little money since Social Security doesn't charge interest on repayments.

Track and report all earnings, regardless of amount, that have payroll taxes deducted.

A simple way to do this is to keep all of your payroll check stubs, or a photocopy of your pay checks -- no matter how small or large.

Your countable income for purposes of determining whether there is a work month can be reduced by any or all of the following:

  • Impairment Related Work Expenses (IRWE): Expenses that help you work, but for which you are not reimbursed. For a list of expenses for employees to include, see the Social Security Work Activity Report, Form SSA-821-BK. For self employed people, see the form SSA-820-BK. A simple chart to help you keep track of these expenses is included. To learn more, see: IRWE.
  • A "Subsidy": The money you receive beyond what your services are worth. To learn more, see: Subsidy.
  • Money put into a "PASS" Plan: A plan that you create, subject to Social Security's approval, that will help you reenter the workforce and become self-supporting, for example, money to let you open a restaurant. To learn more, see: PASS.

If your earnings vary, provide Social Security pay stubs. Also let Social Security know if you earn money one month, but receive it another month.

Even though you work, if your earnings are below Trial Work Period or Substantial Gainful Activity levels ($720 and $1,000 respectively in 2010), the month is not counted as a trial work month, which means you get to preserve it for future use. This is important because every Trial Work Period month you don't use is a month during which you can collect your full SSDI benefit check and earn as much as you can as well.

If you don't provide pay stubs, Social Security will simply divide reported quarterly earnings by three and then compare those gross earnings to the Trial Work Period and Substantial Gainful Actity levels to compute your Trial Work Period and the Extended Period of Eligiblity during which you might also receive an SSDI check. If your income varies, such as due to time off, overtime, the ups and downs of hours worked and even the varying days and months on which pay periods end and paychecks are issued, you may hve months counted as Trial Work months which shouldn't be counted.

Likewise if you receive a check in one month for work performed in another month, the month that should count is the month in which the money was earned - not the month in which you received the pay.

Totaling your earnings month-by-month is what is called for in federal regulation. (20CFR404.1592(b) says that, for SSDI purposes, wages are counted when actually earned -- not necessarily in the same month in which the pay check is issued.

Also be aware that if earnings are sufficient to be considered a Trial Work Month, they don't count if they occur during an Unsuccessful Work Attempt that lasts less than 6 months and ends because of reasons related to the disability. For example, because of health problems or accommodations are no longer available. If there is resistance to this argument from Social Security representatives, refer them to the following policy documents: 20CFR404.1574(a)(1), 20CFR416.974(a)(1), POMS DI 11010.210 and SSR 84-25.

If your return is not successful, tell Social Security right away and see: SSDI: If Your Return To Work Is Not Successful.

Additional Information about work can be obtained at: offsite link.

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