Social Security Disability benefits are available to those who are unable to work due to a significant medical condition or have a health issue that is expected to result in death. For a disability to qualify, it must be significant enough that it would prevent you from working for at least one full year.
If you are disabled, Social Security will continue to monitor your condition on a regular basis through Continuing Disability Reviews. These reviews must occur every 18 months, three years, or seven years depending on your condition. If you suffer from a condition that is likely to improve, you can expect a shorter review cycle. However, chronic conditions that are unlikely to improve may involve a longer time between reviews.
If you are currently receiving Social Security Disability benefits, it is important to know what circumstances would cause them to end and what your limitations are regarding income. In addition, you should be aware of what changes to your benefit income you may see as you reach retirement age.
Returning to Work
Since disability benefits are generated due to an inability to work, one common means of benefit termination is returning to work. In 2020, Social Security Disability allows a recipient to generate up to $1,260 per month, or $2,110 for those who are blind. However, any income over this amount, and potentially an amount below it, could qualify as “substantial gainful activity,” disqualifying you from receiving Disability benefits.
One exception to this rule is known as a trial work period. This allows an individual to attempt to return to work for a period of up to nine months without the automatic cessation of their benefits. After the trial period, if the individual is able to continue working, their disability benefits will be stopped. However, if returning to work is not feasible, benefits will continue as scheduled.
Disability benefits are designed to supplement a person’s income during their working years if they suffer from a disability. Because of this, these Social Security benefits cannot be paid out after a person has reached full retirement age as determined by the government. Full retirement age ranges from 65 to 67 years old.
Your full retirement age is dependent on the year you were born:
If you were born before 1938:
– Your retirement age is 65 years old.
Those born between 1938 and 1942:
– Retirement age is 65 plus two months for each year after 1937. For example, someone born in 1939 would have a retirement age of 65 and four months.
Those born between 1943 and 1954:
– Full retirement age is 66.
Those born between 1955 to 1959:
– Retirement age is reached at 66 years plus two months for each year after 1954. This means that someone born in 1956 would have reached retirement age at 66 years and four months.
Those born after 1960:
– Retirement age is 67 years old.
Once you reach your full retirement age, your benefits will switch over to Social Security Retirement benefits. Disability benefits are based on your retirement benefits at full retirement age. Because of this, transitioning between disability and retirement programs should result in no change to your benefit amount.
The one difference to keep in mind is that after this transition, there is no longer a limit to your earnings. Prior to retirement age, the government places a cap on your earnings while you are still receiving benefits. However, once you reach retirement age, this cap goes away, allowing you to generate income without any penalty being applied to your benefit amount.
If you are receiving disability benefits and you become incarcerated, your Social Security benefits will be stopped during the time you spend in a penal institution. Benefits will also be suspended for 30 days following your release if you do not participate in a rehabilitation program. The month after the 30-day period ends, your benefits will continue once again.