When Disability Benefits Stop Due to Work Activity, § 404.401a.

If you’re receiving disability benefits under Title II of the Social Security Act, it’s essential to understand how engaging in work activity can impact your benefits.

This blog post will break down the rules and regulations that govern when disability benefits may stop due to work activity, according to § 404.401a of the Social Security regulations.

1. Substantial Gainful Activity (SGA) and Disability Benefits
   • If you engage in Substantial Gainful Activity (SGA) during the reentitlement period following the completion of your trial work period, your monthly disability benefits will stop even if you still have a disabling impairment.
   • SGA refers to work activity that involves significant physical or mental activities and is done for pay or profit.
2. The Trial Work Period (TWP)
   • The trial work period is a nine-month period during which you can test your ability to work without losing your disability benefits.
   • During the TWP, earnings from work activity will not stop your benefits, except as provided in § 404.471.
3. The Reentitlement Period
   • The reentitlement period starts immediately after the completion of the trial work period.
   • During this time, you may still receive disability benefits for the first month in which you engage in SGA and the two succeeding months, regardless of whether you perform SGA in those two months.
4. Impact on Benefits for Others
   • If someone else receives monthly benefits based on your earnings record, their benefits will also stop for any month that you cannot be paid benefits during the reentitlement period.

Example: John is receiving disability benefits under Title II of the Social Security Act due to a severe back injury. After a few years, John feels that he has recovered enough to attempt working again. He is aware of the Trial Work Period (TWP) that allows him to test his ability to work without losing his disability benefits.

John finds a part-time job as an administrative assistant and starts working in January 2023. His earnings do not exceed the Substantial Gainful Activity (SGA) threshold during the TWP. John completes his TWP in September 2023 without any issues, and his disability benefits continue.

In October 2023, John’s employer offers him a full-time position with increased responsibilities and a higher salary. Now, John’s earnings exceed the SGA threshold. October marks the beginning of John’s reentitlement period. Since he is engaging in SGA, his disability benefits will stop. However, he will still receive benefits for October and the following two months (November and December) as a grace period.

John’s wife, Sarah, has also been receiving monthly benefits based on John’s earnings record. Because John is no longer eligible for disability benefits during the reentitlement period, Sarah’s benefits will also stop for the same duration.

In this example, John’s decision to engage in Substantial Gainful Activity during the reentitlement period has led to the discontinuation of both his and Sarah’s disability benefits.

Conclusion: Understanding the relationship between work activity and disability benefits is crucial to avoid unintended consequences. Engaging in Substantial Gainful Activity during the reentitlement period following your trial work period may result in the discontinuation of your disability benefits. Be aware of the rules and regulations surrounding this situation to make informed decisions about your work activity and its potential impact on your benefits.

https://www.ssa.gov/OP_Home/cfr20/404/404-0401a.htm