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DOES ALL INCOME COUNT AGAINST YOU WHEN APPLYING FOR SOCIAL SECURITY DISABILITY (SSDI)?

In order to qualify for Social Security Disability Insurance (SSDI) you must not be working at "substantial gainful activity," or SGA.  This is a restriction that prevents individuals from working and receiving SSDI benefits at the same time.

There are 2 key phrases that must be understood here:

Substantial Gainful Activity (SGA) - is defined as earning wages, commissions, bonus or self-employment income greater than $1,550 per month.  This amount changes year-to-year because of inflation.  The $1,550 limit is for 2024.

 Wages, commissions, bonuses or self-employment income  -  specifically means work-related income, produced by using your labor, time and effort to earn money.  In other words, it is job related income.

WHAT TYPES OF INCOME ARE NOT INCLUDED IN SGA?

Not all income is work related.  Some income may not require a person to invest work, labor, time or effort to acquire the money.  Here are some examples of income that are NOT included in Substantial Gainful Activity:

  • alimony or child support
  • investment income (rent, royalties, stock or bond dividends, retirement plans or benefits from insurance companies)
  • VA retirement or VA disability income
  • Retirement from most jobs where your work has completely ceased
  • Pensions and similar funds
  • Money taken from IRAs, 401-Ks or other retirement plans
  • Money that is given to you with no work, talent or effort expected in returned-- a true gift 

Social Security Disability (Title 2) is not a needs-based program and it is not income restricted.  It is work restricted.  If you are able to work (as proven by working), Social Security will not pay you a disability benefit because you are not disabled.  However, there is no limit on how much INCOME you can have or how many assets you can own.  For example, a millionaire who has stopped working can apply for SSDI benefits and could qualify for payments as long as he/she is no longer working and producing income from work activities.

If you have income above $1,550 per month, here is the question:  What is the source of the income?  Does it come from work-related activities or is it from other sources in which you currently invest no time, effort or labor?  It the income is derived from a work or labor related activity, it makes you ineligible for an SSDI benefit.  However, if the income source has nothing to do with working, labor, effort, then it probably does not interfere with Social Security disability benefits.

In school, I was taught that there are only 2 sources of income:

1.  People working

2.  Money working

People working may affect Social Security disability eligibility.

Money working generally does not interfere with Social Security disability.

What are some examples of "money working"?

Again:  Things like investments, insurance payments, royalties from published or recorded works, retirement income from pensions, benefits of insurance policies of any kind, child support payments, investment income from stocks or bonds, rent payments or alimony payments.  These types of income do not involve you going out to work to earn money.  Thus, they are not considered as "significant gainful activity."  The key word perhaps is "activity," since these sources of income do not require  any "work activity" on the claimant's part.

Look at it this way:  A totally disabled person who is bedfast and cannot perform any kind of work may still have someone paying him rent.  He/she may still get dividends from stock or bonds, or may still receive alimony payments or a retirement check.  None of these represent payment for work.  

Social Security disability is a very complicated and confusing area of law.  It is governed by thousands of pages of laws, rules, regulations, and court decisions.  It may be profitable for you to get advice or representation from an experienced counselor, lawyer or advocate as you start the process. There are dozens of myths, half-truths and just plain falsehoods floating around.  Only an expert will likely know how to apply the laws and regulations.  He or she can save you thousands of dollars and a lot of time in the Social Security disability process.

________________

Provided as information by Charles W. Forsythe of the Forsythe Firm in Huntsville, AL -- Social Security disability counselors and advocates. We handle applications, appeals and hearings.  Free consultations (256) 799-0297.

 

 

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