For some, it’s degenerative; for others, it’s a split moment. In either case, the consequences are lasting. And in either case, you find yourself in need of financial aid because a disability makes it impossible to continue working. Individuals struggling to make ends meet with a physical or mental disability can apply for Social Security Disability Insurance (SSDI). But while the SSDI program doesn’t limit you in terms of unearned income or assets, it does have rules regarding wages earned through work. If you’re not careful, you can risk losing your eligibility. To avoid that, get to know the Social Security Disability income limits for 2021.

Consider working with a financial advisor as you prepare for retirement.

2021 Social Security Disability Income Limits

While SSDI is valuable to many, applicants need to carefully consider the program before applying. The maximum disability you can receive in 2021 is $3,148 per month. However, the average recipient will likely receive an amount of around $1,277 per month. That might not be financially adequate for you, especially considering the income limits in place.

Here’s how they work:

Substantial Gainful Activity (SGA)

Based on December 2020 data, disabled workers receive around $1,277 in average monthly benefits from Social Security. While that can help supplement a household’s income, it’s not enough on its own. Alone, that level of benefit barely keeps an individual above the 2021 annual poverty guideline at $12,880.

As a result, many individuals try to supplement their income while collecting disability benefits. They may do so through passive income, like investing or an inheritance or earned income. However, substantial gainful activity (SGA) is any work exceeding the disability income limit. If you engage in SGA, then you could potentially risk losing your benefits. So, it’s important to keep tabs on your income while on disability or applying for it.

The rules regarding SGA change depending on your disability status, though. SGA applies to both SSI benefits and Social Security for non-blind disabled individuals. For people in this group, the 2021 monthly SGA amount is $1,310. In contrast, it only affects Social Security for the blind. Individuals in this category have an SGA amount of $2,190 during 2021.

Trial Work Periods

It’s possible that you may want to integrate back into the workforce at some point. It’s possible to do so. For anyone already receiving benefits who wants to try working again, you can enroll in a trial work period (TWP).

This period spans nine months, during which you have no income limit. Therefore, you can still collect monthly benefits and won’t face SGA consequences. This work should not conflict with the type of disability you have, though. For example, if you began collecting disability benefits due to a bodily injury, you should not perform a physically demanding job. Doing so may call into question your need for Social Security .

The trial period doesn’t have to be nine consecutive months in a row. Instead, SSDI recipients can opt for a 60-month rolling period. If you decide that the work is not possible after all, then you can stop and continue receiving benefits. A month gets counted into this trial period if you earn over a certain amount. For 2021, that requires the SSDI recipient to earn more than $940.

If the recipient works the entire trial period and makes more than $940 each month, the SSA evaluates the individual. Any working over the SGA amount will enter a three-month grace period. They can continue to collect benefits during that time, after which it stops.

Additionally, earning more than your SGA amount will likely trigger a trial work period.

Extended Period of Eligibility

Some recipients may fall into another category. They earn over the $940 threshold during their trial period but under the SGA amount of $1,310 (for non-blind individuals). Under these circumstances, people can qualify for an extended period of eligibility. It takes place after your trial period end and lasts for 36 months. During the extended period of eligibility, you can still receive SSDI benefits. However, you only receive them in months you earn below the 2021 SSDI income limits.

Then, your benefits end after the 36-month mark, and you consistently earn more than the SSDI limit. You can reapply for benefits, though. If you find yourself unable to work at some point in the following five years, you can get re-approved. This is known as an Expedited Reinstatement (EXR) of Benefits. So, your benefits and approval kick back in much more quickly than the first time.

How to Qualify for Disability Income

There are a few factors that Social Security looks at to determine your eligibility for disability benefits.

First, you must have held a job that Social Security covers. Essentially, that means you pay into Social Security, either through self-employment taxes or directly from your payroll. According to the Social Security Administration’s data, 89% of working U.S. citizens between the ages of 21 and 64 meet this qualification. While you do that, you earn Social Security work credits which help you qualify for disability benefits.

The amount you need to earn for a work credit varies between years. For 2021, you can earn one credit per $1,470 in income. Earning $5,880 in wages or self-employment income earns you four credits in total – the maximum available annually.

Credit Breakdowns

The overall number of work credits you need to qualify, then, depend on your age. Younger workers generally need less than their older counterparts. The rules generally follow this pattern:

• Before age 24 – You need around six credits earned during the three-year period leading up to your disability.

• Ages 24 to 31 – You can qualify if you worked at least half the time between your current age and 21. So, if you became disabled at 29, you would need at least 4 years of work experience under your belt.

• Ages 31 and older – Generally, you need a minimum of 20 credits earned during the 10 years right before you became disabled.

The SSA has a table with estimates for both age and years of work you can review here. Remember, earning credits must be done within a certain amount of time.

In addition, you must also have a medical condition that fits the definition for disability used by Social Security. They generally look at five conditions to determine this:

• If you are currently working and if your earnings are more than the disability income limits. Those exceeding it generally don’t qualify.

• The severity of your condition. It should stop or limit your ability to do basic activities (sitting, remembering, walking, standing, lifting) for at least 12 months.

• If your condition is located on the SSA’s list of disabling conditions.

• If your medical condition prevents you from returning to your previous work.

• If your medical condition prevents you from other fields of work.

As a result, Social Security does not offer disability benefits to anyone with a partial or short-term disability. Only those with a total disability qualify.

There are some special situations, though, where the individual may not exactly fit these conditions. They include blind or low vision individuals, disabled children, wounded warriors & veterans and widows/widowers.

How to Keep Your SSDI Benefits

People who are considering applying or currently receive benefits may feel like they have to walk a tight rope to stay on it. In particular, they can face strict rules if they are presently employed or wish to work part-time. So, it’s crucial for you to understand what you need to do to ensure you can keep collecting SSDI benefits.

You may experience changes during your enrollment. For example, you may move, pick up a part-time job or even become a parent. It’s your responsibility to report any events that could impact your eligibility to the SSA. You should make your report as soon as possible, but no later than 10 days after the month when the change happened. You can read a fuller list of reporting responsibilities in this publication.

You also want to stay on top of your condition, benefits and earnings. Continue to visit your doctor so that you have proof of an enduring disability. And keep track of your income to ensure you don’t exceed the monthly limits. If, at one point, your benefits stop, you have the right to request an appeal. Once you receive notice of the SSA’s decision, you must repeal it within 60 days. You can submit evidence and an appeal online through the SSA’s website, download the appeal forms, or contact your local Social Security office and they’ll send the forms along to you.

The Takeaway

SSDI is a vital, although modest, source of financial support for disabled individuals. And over 156 million workers in Social Security covered jobs have access to it as a result of their taxes. Now, approximately 8.1 people benefit from the program. But, the income limits in place can make it difficult to navigate or support yourself financially when facing the cost of living. Due to this, and the approval requirements, it might be wise to consult a financial advisor. They can help you strategize and organize your finances. That way, you remain qualified for the program but learn ways to boost your financial independence.

Tips for Retirement Planning

• Financial planning is already difficult. But the limits on income that come with SSDI don’t make things any easier. If you need help, consider speaking with a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor, get started now.

• Use a free retirement calcuator to see how you’re doing in preparing for your golden years.

• Once you hit your full retirement age (FRA), the SSA will convert your SSDI benefits into retirement benefits. Planning for those years may be overwhelming, but it’s important to review your options. You may want to consider moving, for example, to a tax-friendlier state. If you’re curious, here’s our list of the best states to retire for taxes.

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