Social Security Disability Insurance (SSDI) Trial Work Period

Introduction

SSDI allows recipients to work once they start getting monthly benefits under the nine-month Trial Work Period (TWP) . You may work and earn any amount of money you want for up to nine non-consecutive months. Your benefit will not be affected. Once you use up all nine trial work months, you could lose your monthly benefit depending on the amount of money you earn.

If your wages are under $700 a month...

Monthly wages under $700 gross (based on new regulations for 2009) do not affect your benefit or count in the nine-month TWP. You should report all wages to Social Security by calling your local field office. Keep phone logs and paper records of all your communications with Social Security. If you do not report your wages, Social Security will eventually find out by scanning Social Security numbers through the Internal Revenue Service and/or the California State Tax Franchise Board.

Wages over $700 a month...

Once you report wages over $700 a month, Social Security enrolls you in the nine-month TWP. They should send you a Work Activity Report to document your earnings and return to them. You can earn $250 a month or $2,500 a month. Your benefit will not be affected until you report wages over $700 for nine months. The nine months do not have to be consecutive. For example: if you work every other month, and earn over $700 each month you work, then you will use up your nine-months of the TWP after 18 months. Once you use up all nine Trial Work Months, Social Security looks at how much you earned. If your wages for those nine months were always over $700 but under $980 a month (after Jan.1, 2009), before taxes, your TWP is over. Benefits continue if you stop working at that point, or continue working at under $980.

Wages over $900 a month and Substantial Gainful Activity (SGA)

Social Security considers monthly wages over $980 as Substantial Gainful Activity, (SGA). This is the amount of monthly income which Social Security determines your eligibility to receive a cash benefit. For example, after using up your 9 trial work months by earning $600 a month, and continue working at that level, nothing happens to your benefits. But, if you earn over $980 in a following month, (if you are reporting it) Social Security will notify you that your benefit is about to end. Likewise, if your wages during the nine months are always over $980, and if you keep working at that rate, your cash benefit will eventually cease.

SSDI’s Extended Period of Eligibility (EPE) & Grace Period

When you complete your Trial Work Period, the first month that follows begins the second phase of their Work Incentive Program. This period lasts for 36 consecutive months and is called the Extended Period of Eligibility (EPE). The first month you exceed SGA anytime throughout this EPE, Social Security gives you a three-month, “Grace Period”, of benefits before they cease your cash benefit. Social Security notifies you by mail of the impending cessation of your cash benefit and why. Therefore it is very important if you intend to stop working after nine months, or if your wages are going to drop under $980, to notify your local Social Security field office as soon as possible. Throughout the EPE, your disability claim is still active. If you stop work at any time during EPE, or if your wages drop below $980 month for any reason, you are automatically entitled to your monthly cash benefit. Once you are aware of this change you must notify your local Social Security field office. It will take them approximately two weeks to process your request. After the 36-month EPE ends and you are still working at over $980 or whatever the SGA amount is for that year, your disability claim is TERMINATED. Social Security will again send you written notification of their intentions to terminate your claim. For the next five years after receiving your termination notice, you could automatically be eligible to go back on your SSDI claim if your health inhibits you from working at the level of earning SGA. This is called Expedited Reinstatement of Benefits (EXR). When you request an EXR, you have the right to request Provisional Payments while Social Security is reviewing your recent medical records to determine if you are still eligible under their current criteria. These payments can last up to six months or until Social Security makes a determination on your eligibility.

Medicare Continuation

Medicare comes automatically through SSDI after 24 months of payment. It remains in place throughout the nine-month TWP, the three month, “Grace Period”, extension of benefits, and throughout the 36 months of EPE. A federal law passed in 1999 continues Medicare for another four and a half years after EPE, but recipients will have to pay Part B premiums.

Medicare Part A (hospital insurance) is free. Medicare Part B (doctors insurance) costs $96.40 a month. The amount is deducted from your SSDI check, or Medi-Cal pays it if you have Medi-Cal. If your SSDI checks stop because of wages, you must work out a payment system with Social Security to pay the premiums. Medi-Cal should continue to pay your premiums even if your Social Security checks stop as long as you remain Medi-Cal eligible.

Summary

SSDI’s Trial Work Period works best for people who return to work full-time. You are eligible for a TWP only after your five month waiting period (or date of entitlement). Your wages will not affect your benefit, regardless of amount, for an entire year (nine months TWP, plus three months “Grace Period”, extension of benefits). You also remain on EPE for nearly three years after your first year back at work. Your Medicare stays in place for eight and a half years. You can return to your claim if your health requires it.

The Trial Work Period can be challenging for part-time workers. If you are earning over $980 a month your SSDI checks will stop after you have worked for 12 months (nine months TWP plus three months “Grace Period”). You will be left with your part-time wages, after taxes, if you keep working. Use the TWP to give working a try.

SSDI Trial Work Period Work Sheet