How to Make Extra Money While on Disability

Many individuals receiving disability benefits explore opportunities to earn additional income, often with concerns about how working might impact their financial support. Understanding the regulations and programs designed to support beneficiaries who wish to work is important. This article provides information on how disability benefits are affected by earned income and outlines various work incentives available through the Social Security Administration.

Navigating Income Rules for Disability Benefits

The Social Security Administration (SSA) administers two primary disability benefit programs, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), each with distinct rules governing how earned income affects benefits. Understanding these differences is foundational. The concept of Substantial Gainful Activity (SGA) is central to SSDI eligibility, defining the level of work activity considered significant enough to indicate an ability to support oneself.

For SSDI beneficiaries, SGA refers to a specific monthly earnings threshold that, if exceeded, generally indicates an individual is no longer considered disabled under Social Security rules.

As of 2024, the monthly SGA amount for non-blind individuals is $1,550, while for blind individuals, it is $2,590, with these figures typically adjusted annually. When evaluating SGA, the SSA considers gross earned income from wages or net earnings from self-employment after certain deductions for impairment-related work expenses. This assessment helps determine if an individual’s work activity rises to a level that would typically preclude SSDI payments.

Supplemental Security Income (SSI) operates under a different set of income rules, primarily focused on an individual’s overall financial need. For SSI, earned income is not evaluated against an SGA threshold but rather through a process that calculates “countable income.”

The SSA applies specific exclusions to gross earned income before determining the amount that will reduce an individual’s SSI payment. This calculation aims to encourage work by allowing beneficiaries to keep a portion of their earnings.

When determining countable income for SSI, the SSA first applies a general income exclusion, which is typically $20 per month from any type of income. Following this, an earned income exclusion is applied, which disregards the first $65 of monthly earned income. After these initial exclusions, only half of the remaining earned income is counted against the SSI payment.

For example, if an SSI beneficiary earns $500 in a month, $20 is excluded, then $65 is excluded, leaving $415. Half of this remaining amount, $207.50, is then considered countable income, which directly reduces the SSI benefit dollar-for-dollar.

The distinct treatment of income for SSDI and SSI means that an earnings amount that might not affect an SSI payment could potentially trigger an SGA review for an SSDI beneficiary. This difference underscores the importance of knowing which benefit program applies and tracking all earned income. Proper understanding of these income rules is the initial step in planning any work activity while receiving disability benefits.

Utilizing Social Security Work Incentives

The Social Security Administration provides several work incentives designed to help beneficiaries test their ability to work without immediately losing their benefits. These programs create a safety net, allowing individuals to gradually transition into employment or increase earnings. For SSDI recipients, the Trial Work Period (TWP) is a crucial incentive that supports initial work attempts.

The Trial Work Period allows SSDI beneficiaries to work and earn any amount of money for up to nine months within a 60-month rolling period without affecting their disability benefits.

A month counts as a trial work month if gross earnings exceed a specific threshold, which was $1,110 in 2024, or if significant self-employment activity occurs. During these nine months, individuals continue to receive their full SSDI payment, regardless of how much they earn. This provision offers a valuable opportunity to assess one’s capacity for work and determine if sustained employment is feasible.

Following the completion of the Trial Work Period, the Extended Period of Eligibility (EPE) begins for SSDI beneficiaries, lasting for 36 consecutive months. During the EPE, individuals can continue to receive their SSDI benefits for any month their earnings fall below the Substantial Gainful Activity (SGA) level.

If earnings exceed SGA in a month, benefits are suspended for that month, but they can be reinstated without a new application if earnings drop below SGA again within the EPE. This extended period provides continued protection and flexibility, supporting a gradual return to work.

Impairment-Related Work Expenses (IRWE) allow beneficiaries to deduct certain costs from their gross earnings when SSA calculates Substantial Gainful Activity for SSDI or countable income for SSI. These expenses must be for items or services necessary for an individual to work because of their disabling condition, and they must be paid for by the individual and not reimbursed by another source. Examples include:
The cost of a wheelchair
Specialized transportation to and from work
Certain attendant care services
Modifications to a vehicle or home workspace
By deducting IRWE, an individual’s countable earnings can be reduced, potentially keeping them below the SGA level for SSDI or increasing their SSI payment.

For SSI beneficiaries, the Plan to Achieve Self-Support (PASS) allows individuals to set aside money or other resources to achieve a specific work goal. This can include funds for:
Education
Vocational training
Starting a business
Purchasing equipment needed for work
The money and resources set aside under an approved PASS plan are not counted as income or resources when determining SSI eligibility or payment amounts. This allows beneficiaries to save for their career objectives without jeopardizing their SSI benefits, providing a direct path to financial independence.

Other work incentives, such as Blind Work Expenses (BWE) for blind individuals receiving SSDI or SSI, allow the deduction of certain work-related expenses regardless of impairment-relatedness. Similarly, Property Essential to Self-Support (PESS) for SSI recipients allows certain resources used for work or self-support to be excluded from resource limits. These incentives demonstrate the SSA’s commitment to supporting beneficiaries’ efforts to become self-sufficient, providing pathways to work while managing benefit eligibility.

Reporting Earnings to the Social Security Administration

Once an individual begins earning income while receiving disability benefits, accurately and promptly reporting earnings to the Social Security Administration (SSA) is required. This ensures benefits are adjusted correctly and helps prevent overpayments. Beneficiaries must inform the SSA of any changes in their work activity or income.

The SSA offers several methods for beneficiaries to report their earnings, providing convenient options. Individuals can report through their personal my Social Security account online, a secure and efficient way to submit information. Alternatively, earnings can be reported by phone, by mail, or in person at a local SSA office. Choosing the most accessible and reliable method helps ensure timely submission.

When reporting earnings, the SSA requires specific information to process the update accurately. This typically includes:
The gross monthly earnings before any deductions
The dates worked
The employer’s name
Contact information
It is also important to provide copies of pay stubs or other documentation that verify the reported income. Providing complete and accurate details helps the SSA efficiently review and adjust benefit amounts as needed.

Earnings should be reported to the SSA monthly, ideally as soon as income is received or work activity occurs. While deadlines vary, reporting within the first 10 days of the month following receipt of earnings is a common guideline. Consistent and timely reporting avoids discrepancies in benefit payments and ensures work incentives are applied correctly without interruption.

After receiving an earnings report, the SSA reviews the submitted information to determine its impact on disability benefits. This may lead to an adjustment in the monthly benefit amount, a suspension of benefits if earnings exceed certain thresholds, or continued payment if work incentives apply. The SSA may contact the beneficiary for additional information or clarification, so maintaining open communication is important.