How does SSDI affect my SSA retirement benefits?The Social Security Administration administers not only Social Security retirement benefits but also Social Security Disability Insurance or SSDI for claimants who are disabled and no longer able to work.
Social Security Retirement Benefits
Social Security retirement benefits are offered to workers who have contributed into the Social Security system paying taxes and working. If the worker qualifies, when they retire, they will be eligible to receive ongoing, monthly cash payments.
Many workers may retire as early as 62 years of age and receive a reduced retirement payments. Other workers will choose to work until their full retirement age, which can vary based on when the worker was born, and receive an unreduced SSA retirement payment.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance (SSDI) provides monthly cash benefits to workers who are disabled due to a severe physical or mental health condition and who are not able to work for at least 12 continuous months.
SSDI is available to workers who have paid employment taxes and have earned approximately 20-40 work credits over the course of their employment. The amount of credits needed varies with a workers age at the time of their disability. Most full-time workers can earn 4 work credits per year.
How does Social Security Disability Benefits affect SSA retirement benefits?
Many claimants think they have a set amount of money they have paid into the SSA system and if they are determined disabled and begin to receive SSDI that their total amount is depleted, potentially leaving them no residual funds for retirement.
That is not quite how it works. If a claimant is receiving SSDI and they reach their full retirement age, the amount they were receiving for their SSDI payment is automatically converted to a Social Security retirement payment. The amount they are paid does not change and the SSA will make the conversion without the claimant intervening.
Can I work while I receive SSDI or SSA retirement?
If a claimant is receiving Social Security Disability Insurance they are not allowed to perform substantial gainful activity or SGA. The SSA assumes if they are able to perform SGA work than they are not really disabled. Many claimants do not understand this, but not being able to work is the definition of disabled according to the Social Security Administration.
So what happens after a claimant begins to receive SSA retirement? After the SSA converts the SSDI payment to a retirement benefit, the claimant can return to work and is no longer restricted on the amount of income they can earn.