How Your Income Affects Your SSD Approval Chances

How Income Affects Your Chances for SSD Approval

We recently received several questions from readers asking about income limits for Social Security disability (SSD) benefits. It’s true that the Social Security Administration (SSA) sets a maximum monthly income limit for people applying for disability benefits. Earn more than this amount, and they’ll automatically deny your claim. But they don’t count all incomes equally — learn which ones may apply to your specific situation below.



Monthly Income Limits Apply to Married or Single SSD Claimants

Anyone who works and earns more than $1,260 per month in 2020 cannot qualify for SSD benefits But what does the SSA mean when they use the word “earn,” exactly? In general, they mean that if you’re still working and earning a paycheck. What if you’re working part-time, “gig economy” jobs (such as Uber or Lyft drivers) or only work on occasion? If you apply for disability benefits while you’re still working, the SSA automatically denies your claim.

Next, let’s look at how this income limit rule applies to married couples. If you’re applying for SSD benefits, will your husband or wife’s paycheck count towards your own income limit? No, your spouse’s monthly income cannot disqualify you for SSD benefits. However, there is one caveat: You may owe taxes on your benefits if you file a joint return. This rule only applies when you and your spouse’s combined incomes add up to more than $32,000 annually. For example: You get $14,400 in SSD benefits this year and your spouse’s annual salary is $20,000. In this case, you will owe federal taxes on your combined incomes the following year.

Okay, but what if you decide to file separate tax returns next year to avoid paying the IRS? Unfortunately, that’s unlikely to work in your favor. Trying to avoid paying taxes on your benefits is a good way to get audited by the IRS. What if you live together, but aren’t legally married and file taxes individually? In that case, you must pay taxes on SSD benefits that total $25,000 or more in any given year.

How Payments From Other Sources Might Affect SSD Applicants

What about people who don’t work, but have other income? Examples might include alimony or child support, VA disability compensation, etc. Parents, please read our child support article to see how it may affect your application. Otherwise, see our answers below:

  1. I’m a veteran who gets a disability check each month from the Army. If approved, will that money reduce my SSD benefit amount? No, VA disability pay won’t reduce your SSD payments or hurt your chances for approval. But if you apply for SSI, or Supplemental Security Income, your VA benefits will count against you. If your VA benefits total more than $1,260/month, you won’t qualify for SSI payments. This is because SSI is a needs-based program that only pays benefits to the poorest eligible Americans. While the SSA does manage that benefits program, it does not use Social Security Trust Fund money for those payments.
  2. Can I file for SSD if I currently receive widow’s benefits? Yes, you can! However, there are a few things you should know before you apply. If approved, the SSA will compare your approved widow’s and SSD benefit amounts. Then, they’ll pay you whichever benefit amount is higher – but not both. For example: Let’s say you currently get $1,000/month in widow’s benefits. However, you also qualify for $1,500 in SSD benefits. The SSA then pays you $1,500 in benefits going forward, because you cannot receive $2,500 in combined payments. Once you reach normal retirement age (i.e., 66 or 67), your benefits automatically convert into regular Social Security.
  3. I retired early due to disability. Can I get SSD benefits if I’m drawing early retirement? No, it’s illegal to draw early retirement and SSD benefits on the same work record.

You May Qualify for Legal Assistance

You’re 2x more likely to get approved for SSD benefits right away if a Social Security attorney files your claim. Think you can’t afford a lawyer to help you? Disability attorneys work on contingency, so you owe $0 for legal assistance if you don’t win benefits. And if you do win, you’ll only pay a small, one-time fee.

Most people who qualify for legal assistance through our website receive $10,000 in lump-sum backpay as well as monthly benefits. Those who apply on their own without legal assistance typically wait 18-24 months to receive their first SSD payment.

Ready to see if you may qualify? Click the button below to start your free online benefits evaluation now!

Get Your Free Benefits Evaluation