How Sheltered Work Affects Social Security Disability

Sheltered work is work done by people with disabilities with modifications or special supervision. This work is often performed at "sheltered workshops," which are sometimes referred to as work centers or community rehabilitation programs (CRPs). Sheltered workshops are often run by nonprofit organizations or as part of state or local government programs.

Sheltered work often pays below minimum wage (legally, although California has outlawed the practice starting in 2025). Some types of sheltered work are geared toward providing people with developmental, physical, or mental impairments the basic skills they need to work in the general economy.

A sheltered workshop sometimes includes physical rehabilitation or instruction in life skills such as:

• personal hygiene
• the importance of being on time for work
• how to apply for jobs, and
• how to manage money.

If a sheltered workshop employs you, your earnings may or may not affect your eligibility for Supplemental Security Income (SSI) or your SSI benefit amount. To understand how income from employment at a sheltered workshop can impact SSI, first, you have to understand the basic requirements for SSI eligibility.

The Basic Requirements for SSI

To be eligible for SSI disability benefits, you must have a low income, and your earned wages must be low enough that your work isn't considered "substantial gainful activity" (SGA).

How Does SGA Affect Your SSI Benefits?

In 2024, the Social Security Administration (SSA) defines SGA as earning $1,550 per month from working. You can't be earning more than the SGA amount when you first apply for SSI.

Social Security generally counts wages from sheltered work employment the same as work performed in the general workplace. But there's an exception when you begin working in sheltered employment. (More on that below.)

After you've been receiving SSI for a month or more, Social Security won't consider whether your earnings are over the SGA level—whether you earn them at a sheltered workshop or any other workplace. But your earnings can lower the amount of your monthly SSI payment.

What's the SSI Income Limit After the First Month?

Your countable income while you receive SSI can't be more than the federal benefit rate (FBR). The FBR is a dollar amount set by the federal government each year. The FBR for 2024 is $943 per month for a single person and $1,415 for a married couple.

Countable income can be earned (money you're paid for a job you do) or unearned (money you don't have to work for, such as interest from a bank account). Here are examples of countable income:

• money you earn from working (this generally includes wages from sheltered employment)
• the value of free food and shelter you receive, and
• unemployment benefits.

Social Security will exclude some of your income from work when it calculates your countable income. The exclusion is called the "earned income exclusion" and will be discussed more below.

Sheltered Work and SSI Eligibility

How sheltered work affects your SSI eligibility depends on which stage in the SSI process you're in and how much you earn.

Sheltered Workshop Training Period

When people with disabilities first enter a sheltered work program, they'll usually have an evaluation period to determine their specific needs. During this phase, workers might also receive:

• life-skills training or other training needed to care for themselves or develop independence, and
• the training needed to do a specific job.

You might be paid a small wage or receive a stipend during this phase of the sheltered work program. Social Security doesn't consider these wages "earned income" for SSI purposes because you're viewed as a student rather than an employee during this training phase. (You'd be considered a non-employee under the "common law control test rule," or CLCT.)

Once you leave the rehabilitation program and enter the regular workforce, you'll be considered an active employee. And the rules will no longer protect your wages.

When You're Unable to Enter the Regular Workforce

Sometimes, you might not be able to enter the regular workforce once the rehabilitation phase at a sheltered workshop has ended. That could happen if:

• the severity of your disability prevents you from being employed in the regular workforce
• you leave the sheltered workshop program and begin subsidized or supported employment, or
• you complete the rehabilitation phase but must stay in the sheltered workshop program until you can find a job in the regular workforce.

In these cases, your income will eventually be counted and could affect your SSI eligibility or benefit amount, as discussed below. (20 C.F.R. § 416.1110(d).)

Sheltered Work Income at the Application Level

When you first apply for SSI, Social Security counts the income you earn in a sheltered workshop the same way it does income from an unsheltered work environment (unless you're in the training phase). And if you're earning above the SGA level when you apply for benefits, you'll be ineligible for SSI—even if you work in a sheltered environment.

But in some cases, Social Security will look specifically at the type and value of your work instead of your earnings to determine whether the work is SGA. (20 C.F.R. § 404.1574(a)(3).)

For example, injured military service members employed in therapy programs sometimes still receive their full salaries. Social Security would base the SGA determination on factors other than the amount of the service member's salary. The SSA would determine the reasonable value of the work being performed to see if it's SGA.

After SSI Approval and the Start of Regular Sheltered Work

As mentioned above, after you're approved for SSI benefits, Social Security doesn't consider whether you're working above the SGA level. But the more money you earn from your sheltered work, the lower your SSI benefit will likely be. That's because the amount of your SSI benefit payment is the FBR minus your countable income.

But, Social Security doesn't include all your wages when calculating your countable earnings because of what's called the earned income exclusion. Social Security won't count:

• the first $65 you earn at your sheltered workplace
• half the amount you earn over that initial $65, and
• an additional $20 from your earnings (assuming you have no unearned income).

You can generally earn up to about $1,900 a month from your sheltered work employment and still receive a small SSI payment.

Does Social Security Have Sheltered Work Programs?

The SSA doesn't operate any sheltered work programs, but they do have two work programs that can help disability recipients go back to work:

• The Plan for Achieving Self-Support (PASS) program lets you save money to pay for school, vocational training, or another work goal.
• The Ticket to Work program offers career planning, employment support services, and benefits counseling.

Be Careful of Working Too Much

Even if you're making less than the SGA amount, if you're working more than 20 or 25 hours a week (and not in a training program), Social Security might wonder if you could work a full-time, regular job.

If you have questions about how sheltered employment might affect your eligibility for SSI benefits or your benefit amount, you should speak with a Social Security representative. You can contact the SSA by phone, email, in person, or by U.S. mail.

If you're applying for SSI disability benefits, it might be helpful to talk to a disability attorney to see how your work could affect your eligibility. Learn how to find a disability lawyer or representative to help with your case.

_{Updated March 12, 2024}