Ask Larry

How Does Social Security Calculate Monthly Earnings?

I’ve been on Ssdi for 5 years now , I’m 63 and receive a monthly benefit .. I also work 20 hours a week in the health care field .. my limit on income is currently set at $1310 a month .. my concern is that my employer this las pay period gave annual incentive bonus of 175 $ which put me approximately $ 70 over my limit this month . .. Does SSA calculate Earnings based on the days you earn in a month or what you receive in a month ?

Hi. When calculating a person's countable earnings for purposes of the trial work period (TWP) and substantial gainful activity (SGA), Social Security goes by the amount a person earns in a month, not the amount they are paid. However, Social Security will default to using the amount paid in a month unless they have evidence needed to show how much the person actually earned in the month.

So, it sounds like it would be important for you to get in contact with Social Security and explain your bonus. If you can submit to them a copy of your pay slip showing your hours worked and the amount of the bonus, that would likely be ideal. Bonuses are supposed to count as being earned in the month(s) FOR WHICH they are paid rather than in the month of actual payment. Therefore, if it was an annual bonus that you received, Social Security should count the average monthly amount over all months of the year (https://secure.ssa.gov/apps10/poms.nsf/lnx/0410505010).

Best, Jerry

Posted: 
Mar 22 2021 - 10:22am
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