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Social Security & Disability Frequently Asked Questions
- How do part-time jobs affect Social Security benefits?
- How does the SSA determine whether I am disabled enough not to work at any job?
- What does Social Security consider to be "employment"?
- Does the SSA review disability recipients’ eligibility from time to time?
- What if I become disabled again after going off disability?
- Can creditors attach my Social Security or Supplemental Security Income checks?
- How does the SSA calculate a retired worker’s monthly benefit?
- Can I continue receiving benefits during the appeals process?
- Does it make sense to continue working if I take Social Security’s early retirement option?
- Can I collect more than one Social Security benefit simultaneously?
- How does the SSA define "substantial work" for disability purposes?
- Can I qualify for Medicare or Medicaid if I am disabled but under age 65?
- What if I’m not sure whether I’m capable of returning to work?
- What’s involved in appealing Social Security decisions, and is it worth it?
- What effect does marriage have on an adult disabled child’s eligibility for benefits?
Q: How do part-time jobs affect Social Security benefits?
A: Social Security benefits are designed to help support people who have retired. Thus, if you return to work following retirement, you may see your benefits reduced, depending on how much income you earn. In April 2000, however, a law was passed that softens the penalty retirees pay for working while receiving retirement or survivors benefits. If you work after retirement, your benefit amount may be reduced only until you reach full retirement age (currently age 65), not up to age 70 as the previous law required.
Here is the formula the SSA now uses to determine how much your benefit may be reduced by other earnings: If you are younger than your full retirement age when you begin receiving Social Security benefits, $1 in benefits will be deducted for each $2 you earn above the annual limit. For 2005, that limit is $12,000. In the year that you reach full retirement age, $1 in benefits will be deducted for each $3 you earn above a higher limit, but only counting your earnings before the month you reach your full retirement age. For 2005, this limit is $31,800. Starting with the month you reach full retirement age, you can receive your full benefits no matter how much you receive from outside work.
Bear in mind that only earnings derived from work–so-called "earned income"—can reduce your benefits The SSA ignores unearned income, such as income from interest, dividends, pensions, annuities, capital gains, and rentals. In other words, you could receive $500,000 in interest income and still receive your full Social Security benefits. The SSA Web site has a calculator to gauge the effect of retirement earnings on Social Security benefits. To access it, go to www.ssa.gov/estimator/.
Q: How does the SSA determine whether I am disabled enough not to work at any job?
A: If you claim that your disability keeps your income below the "substantial" work limits, SSA reviewers will first look at whether the disability interferes with your ability to do the work you did previously. If it does not, your claim will be denied. If it does, the agency then considers the possibility that you might be able to adjust to other work. It considers your medical conditions and your age, education, past work experience, and any transferable skills you may have. If the SSA determines that you cannot adjust to another kind of work, your claim will be approved. If it believes you could adjust to another type of work, your claim will be denied. However, once you have demonstrated that you cannot do the work you once did, it is up to the SSA to prove that there are other types of work you could perform. Social Security has a listing of impairments that are so severe that they automatically mean you are disabled. If your condition is not on this list, Social Security must decide if it is of equal severity to an impairment on the list. In making its decision, the agency will use the medical evidence from your doctors and from hospitals, clinics, or institutions where you have been treated. Just because you have a condition that is difficult to name should not discourage you from applying for benefits. The only hard-and-fast rule is that it must be a medical condition that can be identified and verified by doctors. Any disabling medical (including mental) condition can qualify you for benefits if it prevents you from performing substantial gainful work.
Q: What does Social Security consider to be "covered employment"?
A: To be eligible for Social Security benefits, a worker born after 1928 must have accumulated at least 40 quarters of work in "covered employment." Virtually all paid work qualifies as covered employment, even such episodic jobs as babysitting or housecleaning (provided minimum annual income thresholds are met). The principal groups excluded from the Social Security system are federal workers hired before 1984 and some state and local government employees. In addition, income from interest, dividends, the sale of a business or unreported income is not counted as covered employment. Self-employment earnings on which Social Security tax is paid are considered covered employment, although this has been the case only since 1951. The amount workers earned in self-employment before that year is not counted in determining their benefits.
Q: Does the SSA review disability recipients’ eligibility from time to time?
A: Yes. The SSA will review your eligibility for disability benefits anywhere from every 18 months to every five years, depending on your condition and your medical prognosis. Social Security officials may also call you in for a review if your monthly income frequently approaches the "substantial work" threshold. If you are denied continuing benefits, you can challenge the decision through Social Security’s appeals process. Many denied beneficiaries win back their benefits at the appeals stage.
Q: What if I become disabled again after going off disability?
A: If this happens within five years, you can again receive disability benefits without going through the application waiting period. In addition, your Medicare coverage will automatically resume.
Q: Can creditors attach my Social Security or Supplemental Security Income checks?
A: No. Your benefits are "judgment-proof." Even the Internal Revenue Service cannot get them for payment of back taxes.
Q: How does the SSA calculate a retired worker’s monthly benefit?
A: The Social Security Administration (SSA) bases its benefit calculation on the retiree’s highest 35 years of earnings up to the amount subject to Social Security withholding each year. If necessary, it will use years in which the retiree has low earnings or no earnings to bring the total years of earnings up to 35. The SSA then calculates the retiree’s average monthly earnings over those 35 years adjusted for inflation. The retiree’s monthly Social Security check is arrived at by adding together 90 percent of the first $627 of the average monthly earnings, 32 percent of the next $3,152 and 15 percent of any average monthly earnings above $3,779. (These are the figures for 2005; they are adjusted each year to reflect inflation.) As you can see, the formula is weighted to favor those who earned less during their working lives, giving them a 90 percent retirement benefit on most of their earnings, while giving the highest earners only a 15 percent benefit on a large portion of their working income (and no benefit on earnings above what was subject to tax, which in 2005 is $90,000). You can calculate your future Social Security benefit based on your current and projected earnings by using the SSA’s online Benefits Calculator.
Q: Can I continue receiving benefits during the appeals process?
A: In some cases, disability or SSI recipients can request that their benefits continue during the appeal. This request must be made within 10 days of notice of an end to or reduction in your benefits. However, if the appeal ultimately goes against you, you may have to pay back the benefits you received during the appeal.
Q: Does it make sense to continue working if I take Social Security’s early retirement option?
A: If you are planning on early retirement, you should carefully consider how much a return to even part-time work will actually cost you. You will already be looking at reduced benefits because you retired early. If you return to work and exceed the income threshold, you will see your benefits reduced still further (although the SSA recalculates the Social Security benefit of early retirees who have excess income when those retirees reach full retirement age). Not only will your excess income reduce your Social Security benefit, but you will pay tax on the income as well, and the extra income may mean that more of your Social Security benefits will be taxed. You may even wind up, ironically enough, paying Social Security tax on your earned income. This means that your decision to return to work could result in an effective marginal tax rate of 50, 80 or even 100 percent!
Q: Can I collect more than one Social Security benefit simultaneously?
A: No. If you are eligible for two benefit programs, you will receive the higher of the two benefit amounts, but not both. The exception is Supplemental Security Income, which you can receive while collecting benefits from another Social Security program.
Q: How does the SSA define "substantial work " for disability purposes?
A: In order for you to qualify for Social Security disability benefits, your disability must prevent you from doing any "substantial gainful work." "Substantial" is currently (2005) defined as any work that earns you an average of more than $830 a month. (Persons who are blind can earn up to $1,380 a month in 2005 without being disqualified from receiving benefits).
Q: Can I qualify for Medicare or Medicaid if I am disabled but under age 65?
A: Yes. Even if you are below age 65, you can qualify for Medicare coverage after 24 months of collecting Social Security disability benefits. These months do not have to be consecutive. You may qualify for Medicaid coverage immediately if your assets and income are low enough. If your disability is the result of an accident caused by someone else, however, your Medicaid eligibility may be jeopardized if you receive a large sum of money as the result of a lawsuit or insurance claim. In such a case, you may want to consider setting up a Supplemental Needs Trust that keeps the money from being counted toward Medicaid eligibility.
Q: What if I’m not sure whether I’m capable of returning to work?
A: Because the SSA wants to encourage disability beneficiaries to at least try returning to work, it offers some incentives. You can return to work and earn as much as you can while still collecting disability benefits for up to nine months during any five-year period. If things don’t work out after a few months, you can leave the job and continue receiving disability benefits uninterrupted. If you want to try working again, you can do so and still receive benefits for a total of nine months during any five-year period. Moreover, if you return to work but your earnings fall below the "substantial work" threshold during any month in the ensuing three years, you can report your earnings and you will receive your full disability benefit for that month or months. In addition, if you had qualified for Medicare coverage while disabled, that coverage will continue for 39 months after your return to work.
Q: What’s involved in appealing Social Security decisions, and is it worth it?
A: If your application for benefits is denied or you are receiving less than you believe you deserve, you can appeal. There are four stages of the appeal process, and you must go through one before you can move to the next.
At the first stage, reconsideration, your claim is reviewed by someone other than the person who made the initial decision regarding your benefits. This person’s decision is based on the material in your file when the original decision was made, plus any new evidence you would like to submit. Unless you are appealing a Social Security decision to terminate your disability benefits, you do not have a right to meet face-to-face with the person making the decision, although you can request to do so. A decision can take up to two or three months. If the decision goes against you, you have 65 days from the date on the written notice to appeal to the next level. A copy of the Request for Reconsideration form in PDF format is available from the Social Security Administration’s Web site. To find it, click here. You can also request the form from your local Social Security office or by calling 800-772-1213.
If the reconsideration goes against you, the next step is a formal administrative hearing before an independent administrative law judge (ALJ). Again, you must fill out a special form to request such a hearing. For an online copy of this form, click here, or you can contact your local Social Security office or call 800-772-1213. This hearing may be your best shot at getting an unfavorable decision reversed, so you should consider obtaining the services of an attorney or other professional knowledgeable about Social Security matters to assist you at this stage. (When providing written notice denying a claim, the SSA will send a list of local community groups and legal services organizations that can either help you with an appeal or refer you to someone who can.) You are allowed to appear at this hearing, and it’s in your best interests to do so. This puts a human face on the hearing and permits the judge to ask you questions. A friend, relative, attorney or other advocate may represent you at the hearing, and you can present witnesses or other evidence to the judge.
If the ALJ rules against you, your next step is the Social Security Appeals Council, which conducts reviews of hearing decisions. Your chances of success here are fairly slim. First, the Appeals Council does not review all cases that are appealed, and if it does decide to review your case, it meets only in Washington, D.C., so you will have to travel there or send a representative. Still, you must file an appeal to the Appeals Council in order to move on to the next step of taking the appeal to federal court. If you haven’t retained the services of an attorney knowledgeable about Social Security matters up to this point, you should seriously consider doing so now. If the Appeals Council is to overturn an ALJ decision, the odds are that it will do so only on the basis of a legal error made by the ALJ. Again, you must fill out a special form to request an Appeals Council review. For an online copy of this form, click here, or you can contact your local Social Security office or call 800-772-1213.
If you disagree with the Appeals Council’s decision in the case, you may file a civil lawsuit in the United States District Court (federal court) for the area where you live. You have 60 days after the Appeals Council decision is mailed to do so. Such a lawsuit is an expensive undertaking, but it may be worth it depending on the money at stake and the strength of your case. If you do decide to go forward, you will need to be represented by an attorney who is experienced in handling similar Social Security cases. Social Security law strictly limits the fees that attorneys can charge for such representation. Many lawyers will take a case at any stage in the appeals process on a contingency basis—that is, they will collect only if you win and will then take a percentage of your past due benefits. Social Security rules state that they can collect 25 percent of your past due benefits or $5,300, whichever is less.
Q: What effect does marriage have on an adult disabled child’s eligibility for benefits?
A: As a general rule, a disabled adult who is receiving Social Security benefits based on his parent’s work record will lose his benefits if he marries. However, if the adult child marries someone who is also receiving Social Security benefits, the adult child’s benefits will not be affected by the marriage. The benefits may be reinstated if the marriage is either voided or annulled. But if the marriage ends by death or divorce, benefits cannot be reinstated.
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