What Will Happen If I Draw Disability Benefits, Work, and do not tell Social Security?

Depending on an individual's circumstances, it may seem worth it at first glance, but Social Security will eventually find out about all work that you are performing whether or not you “tell” them about your job. At the very least, you may find yourself in the situation of owing Social Security money (an overpayment), and at the worst you may find yourself being charged with Social Security fraud. Social Security is cracking down on individuals who knowingly do not report work activity.

So, just how does Social Security know if an individual is working and how much they have earned? Social Security earnings records are provided through information reported to the Internal Revenue Service each year. If your social security number has reported earnings from employers, Social Security will access those earnings and your employers. Other times, Social Security becomes aware of an individual’s work activity through a tip from someone (generally Social Security finds individuals working for cash from individual reports). Often, individuals are reported by friends, family members, ex or estranged spouses, co-workers, supervisors, or even neighbors.

Social Security has to investigate each of these reports to ascertain if an individual is indeed working. Even if an individual is working on a cash basis, those earnings count for Social Security disability purposes. There are many ways that Social Security can find out about employment, so for anyone wondering about the possibility of shielding earnings from discovery, the truth is that it is really useless to think that they will not find out about work activity.

So what will happen when Social Security finds unreported work activity? There are times that Social Security finds work activity during a routine disability review or other times an individual’s work activity triggers a "work review".

What is a work review? Social Security work reviews involve Social Security contacting all of your employers for a monthly breakdown of your earnings. Once all employment information is received, Social Security will complete monthly totals for all months worked and determine which months you were not entitled to receive a benefit check.

For example, your monthly earnings determine when your trial work months--the nine months in any five year period that you can earn over the substantial gainful activity monthly amount without it affecting your disability--come to an end (The important thing to remember about trial work months is that they do not have to be consecutive, can occur anytime during a five year period, establish when your extended period of eligibility (EPE) begins and ends, and what your termination month will be).

As you can see, work activity "touches" a lot. And not reporting it can cause an overpayment (which for many claimants can become a truly awful situation). However, it can cause more than a simple overpayment; failing to report income can lead to benefit suspensions and terminations.

What happens if you receive money from social security that you were not actually entitled to receive and incur an overpayment? If you have an overpayment with Social Security, your benefits may be suspended until they collect all the money owed, or you may be allowed to make a payment arrangement with Social Security to pay back any money owed.

Reporting all work activity, by contrast, will prevent overpayments and will allow you to receive information that may prevent your disability benefits from being suspended or terminated.









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Social Security Disability Secrets

Social Security Disability Benefits Questions

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