Social Disability Lawyer Blog

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What Effect Does Working During Early Retirement Have on Benefits?

What Effect Does Working During Early Retirement Have on Benefits?

Does Working Affect Disability Eligibility?

An applicant must earn less than $1,350 per month in 2022 (up from $1,310 in 2021) to qualify for disability benefits under the Social Security disability insurance (SSDI) or Supplemental Security Income (SSI) programmes. (Blind applicants can earn up to $2,260 per month in 2022.) Anyone working in excess of such limits is considered to be engaging in "Substantial Gainful Activity" (SGA).

The Trial Work Period in 2022

Work Restrictions Under SSDI People on SSDI who are seeking to return to work may be able to earn more through a trial work period (TWP) programme. Beneficiaries of Social Security may be entitled for up to nine months of trial labour. A month counts as a trial work period month when an SSDI user earns more than $970 per month in 2022 (up from $940 in 2021).

Work Restrictions for SSI

The new federal income threshold for SSI claimants had been set $841 per month in 2022 by the Social Security Administration, but complex rules govern what money is countable and what is not. Because more than half of an SSI recipient's income is not included toward the maximum, you can continue to receive SSI until you earn up to $1,766 per month in 2022. (if you have no other income).

Any income between $0 and $1,766 will, however, reduce your monthly benefit. (For example, if your monthly income is $1,225 and you have no other sources of income, your SSI payment will be $271.) The income limit for SSI participants may be higher in states that provide supplemental payments to SSI recipients.

The monthly income exclusion amount for SSI students is now $2,040 per month in 2022 (up to an annual limit of $8,230).

What Effect Does Working During Early Retirement Have on Benefits?

If you continue to work even after getting an early retirement from your regular job, the Social Security will reduce your benefits if your annual income exceeds $19,560 ($1,630 per month) in 2022. However, you can earn up to $4,330 per month without losing your retirement benefits during the year you reach full retirement age. (Once you reach full retirement age on your birthday, no matter how much job or earnings you have, your benefits are not reduced in any manner.) Social Security deducted early retirement payments while you worked are added back to your retirement check over the next 10-15 years.

How Much Does Social Security Withhold in Taxes?

The highest amount of wages due to Social Security tax in 2022 is $147,000, up from $142,800 in 2021. The amount of income liable to the Medicare tax has no upper limit. 

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Thursday, 28 March 2024