Example Of What Happens When You Work Under Social Security While Disabled
Pamela Watson, age 24, was receiving Disability benefits of $557 a month based on a childhood condition that made it difficult for her to walk. She wanted to work but was afraid of losing her benefits and Medicare. When she discussed this with a Social Security representative, she was told about disability work incentives under which she could work and still get cash benefits and Medicare. She found out that for the first nine months of work, her benefits would not be affected no matter how much she earned. Pamela started working in a local laundry part time and earned $850 a month. Here’s how her income changed:
| Gross earnings | $850 |
| Social Security check | + 557 |
| Total income | $1,407 |
At the end of the nine months of work, Social Security evaluated Pamela’s work to see if it was substantial. Since she was earning more than $800, her work was considered substantial. Her benefits continued for three more months and then stopped. However, because she still was disabled, her benefits could be reinstated anytime during the next 36 months if her earnings dropped below $800. During the first year after her trial work period, her company relocated outside the city, where there were no bus lines. She hired a neighbor to drive her to work and paid a co-worker to take her home. Her transportation expenses totaled $120 a month.
In addition, she purchased a special motorized wheelchair so she could get around the new suburban plant. This cost $75 a month. Let’s figure Pamela’s "countable" earnings after deducting her Impairment-related work expenses:
| Gross earnings | $850 |
| Subtract work expenses | -195 |
| Countable earnings | $655 |
Because her countable earnings are less than $800, Pam’s Social Security checks were reinstated. Her total net income now is:
| Countable earnings | $655 |
| Social Security check | + 557 |
| Total income | $1,212 |
After a year, she paid off the motorized chair and she received a $340 raise. Her earnings increased to $990 a month. Her countable earnings now are:
| Gross earnings | $990 |
| Subtract work expenses | -120 |
| Countable earnings | $870 |
Because her countable earnings now exceed the "substantial" level ($800), her Social Security benefits will stop. As you can see, at each point in her working life, Pamela’s income was greater than it would have been if she had not worked. In addition, her Medicare coverage continued for 93 months following the trial work period.
