What Does Social Security Look At To Determine My Earnings Level?

Dec 12 2016 - 3:00pm

Hi Larry - I am currently receiving SSDI benefits and have a part time job that is right "under the radar" of Substantial Gainful Activity income. I am due for a raise. I also contribute to a retirement fund which I don't plan on touching for another 20 years. My question is this - does Social Security look at my net income cap as the salary allotment or that income minus the amount that I contribute toward my 401K? For example, 2017's salary cap is $14,040 and my salary would be $14,200, but the amount after non-taxable retirement contribution is $13,000. Which do they count? Thank you for your prompt response! A.

Hi A,

Social Security will count your gross wages, before any deductions for taxes, 401k contributions, etc. Normally, this is the amount listed as 'Social Security Wages' on your W-2 form(s). So, if you earn $14,200 next year, which exceeds the 2017 'substantial gainful activity' threshold of $1170 per month, there is a good chance that you will lose your disability benefits.

Social Security can deduct certain expenses before determining countable earnings, however, if they meet the definition of 'impairment related work expenses' (IRWE). Items that may count as IRWE are out-of-pocket costs for things such as medical devices, equipment, prostheses, and certain medications which are required in order to control a person's impairment so that they're able to work. If you have any such expenses, you should probably consult with Social Security to see if they meet the IRWE requirements.

For more information on working while disabled, see this Social Security pamphlet: https://www.ssa.gov/pubs/EN-05-10095.pdf. For detailed information on IRWE, refer to this section of the regulations: https://www.ssa.gov/OP_Home/cfr20/416/416-0976.htm.

Best, Jerry