Read Josiah’s story to see how changes in net income can impact a person’s decision about whether to return to work and get off benefits.
Josiah is 26 years old and unmarried. He receives $864 per month from Social Security Disability Insurance (SSDI), and also gets Qualified Medicare Beneficiary (QMB) benefits. QMB covers almost all Medicare costs that Josiah would otherwise have to pay out of pocket.
Josiah found part-time employment at a local business. He’s been earning $10 per hour, working 23 hours a week. With those hours, he has earned $996 per month in gross wages. He pays $150 per month for transportation to and from work through Uber and Lyft.
Gross wages are the amount of money a person earns before taxes and fees are taken out. Combining the $864 per month of SSDI benefits with the $996 in wages, Josiah receives total income of $1,860 per month. After paying $150 per month for transportation and $108 per month for taxes, he has $1,602 per month left.
With his part-time wages and SSDI, Josiah’s income is too high to continue eligibility for QMB, but he does qualify for Qualifying Individual (QI) benefits. QI would cover the Medicare Part B premium ($109 per month) and make Josiah eligible for a low-income subsidy to eliminate almost all the costs of his Medicare Part D prescription drug plan.
Through a friend, Josiah heard about a job at an auto company, and is considering taking that position and going back to work full time. If he takes the full-time position, Josiah could earn $19 per hour and $3,291 per month in gross wages.
With earnings that high, his SSDI benefits would be suspended after the trial work period and grace period, and his QI/QMB would stop.
The trial work period (TWP) gives a person on SSDI a chance to try out work without losing SSDI. The TWP is the first 9 months within a 60-month period that a person earns above a certain amount ($840 per month in 2017). No matter how high the earnings, SSDI continues.
After the TWP, if the person earns at or above the SGA level ($1,170 per month, after certain deductions, for non-blind individuals in 2017), he can keep SSDI payments during a 3-month grace period. If SGA level earnings continue after the grace period, SSDI is suspended.
Josiah’s Options: Work Part-Time or Full-Time?
Wages after taxes
Josiah is willing to lose his SSDI benefits if he will be better off financially, but he is concerned about losing his health care coverage, or having to pay extra for it. He is excited about the opportunity, but isn’t sure if he can afford it.
Not only are there potential medical costs to cover, but he would also need to pay more for transportation to and from the new worksite. Rides from Uber or Lyft would cost him $300 per month.
Working full time, Josiah would earn $3,291 per month in gross wages. He would pay $300 per month in transportation costs and $741 per month in taxes. He would keep his Medicare for at least 7 years and 9 months after his TWP ended, but without QI, he would need to pay about $150 per month for Medicare costs.
After expenses associated with the new full-time position, Josiah would be left with $2,100 per month. That amount is $498 more per month than if he kept working part-time and stayed on SSDI benefits.
Josiah learns about two safety nets that will let him get his SSDI back, without having to reapply, if his earnings should later drop or stop. The extended period of eligibility (EPE) will let him get SSDI back by contacting Social Security if his earnings should drop below SGA, or if he stops work, within 3 years after his trial work period has ended.
Another safety net is expedited reinstatement. This option will let him get SSDI back quickly and easily if his earnings drop or stop up to five years after his EPE has ended.
Josiah accepts the new full-time job. Considering the higher net income he will have – even after his SSDI has stopped – and his ability to get SSDI back quickly and easily if anything should happen to his job, Josiah is confident that he’s making the right decision.
Like many people on SSDI, Josiah would like to work full time and is willing to have his SSDI stop, but only if he will be much better off financially than if he worked part time and kept SSDI. Just as importantly, Josiah wants to know that he can get his SSDI back without having to reapply if anything happens to his job.
Share these videos so everyone can see that fulfilling employment is a reality. And don't miss any new stories: Follow the conversation on social media, using #ReturnToWorkSSDI.
The SGA Project is funded by the Rehabilitation Services Administration (RSA), Office of Special Education and Rehabilitative Services, U.S. Department of Education Grant # H235L100004