Working and Receiving Partial Disability Benefits

Partial disability benefits are designed to provide people with financial assistance while they are unable to work full-time. For many, these benefits can mean the difference between being able to make ends meet when a disability has drastically impacted one’s ability to work. But what if you are able to work in some capacity or find employment that is reduced? Can you receive partial disability benefits even with this limited income? The answer is arguably: yes.

Does Working Affect Disability Benefits?

The simple answer is: it depends. Generally speaking, if you are able to work and earn an income that is considered substantial enough to meet your basic needs, you may not qualify for partial disability benefits. However,if you are able to work but only earn a decreased income – due to limited job availability, physical or mental restrictions, or for any other reason – then you may be able to receive disability benefits. In addition, individuals who are able to work a reduced amount of hours may still qualify for partial disability benefits.

What Are the Guidelines?

The U.S. Social Security Administration (SSA) has established a number of guidelines for determining eligibility for disability benefits when an individual is still able to work. The following criteria could make you eligible for benefits:

• Your impairment(s) must be considered “severe” by the SSA.
• Your impairment must keep you from doing the work which you were previously doing.
• Your impairment must also prevent you from adjusting to another type of work.
• Your income must fall within a certain limit (this is known as the Substantial Gainful Activity Limit, or SGA).

If any of these conditions are met and you are still able to work in some way, you may qualify for partial disability benefits.

Can I Have Money in the Bank on Disability Benefits?

While social security disability benefits are intended to provide financial support for individuals who are unable to work, some people have saved money over the years and may be wondering if those funds are taken into account. Generally speaking, if you have up to $2,000 (or $3,000 for married couples) in the bank, you should still qualify for benefits. However, if you are receiving other forms of income or have more than the allowed amount in savings, these factors may be taken into account and could reduce or eliminate your benefits.

FAQ

Q: What is the Substantial Gainful Activity Limit?

A: The Substantial Gainful Activity Limit, or SGA, is the amount of money a person may earn each month before their disability benefits will be reduced. Once a person’s income exceeds this limit, they are considered to be able to work full-time and no longer qualify for disability benefits. Only earnings – such as wages and salary – that are taxable count towards the limit.

Q: Is disability income taxable?

A: Generally speaking, disability benefits are not taxable. However, the exception is if the benefits are being paid by an insurance plan funded by your pretax wages or if your disability benefits come from an employment-related lawsuit. In this scenario, you are responsible for including the disability payments in your taxable income.

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