If you are receiving disability benefits through the SSI program and think you may be able to return to work, SSI has numerous incentives and rules to encourage SSI recipients to return to work. (SSI is the needs-based disability program; Social Security disability insurance has it own trial work rules.)

Financial Incentives

To encourage SSI recipients to work if they can, Social Security has some incentive rules regarding how much income from working will be counted against a person's SSI benefits. (Learn more about the SSI income limits and countable income.)

Treatment of earned income

To encourage SSI recipients to do some type of part-time work even while receiving benefits, over half of the income you earn while working doesn't count toward the income limit for SSI when determining eligibility. However, your SSI benefit will be reduced if you are earning money working. The first $65 of earned income that you make (or $85 if you have no unearned income) is disregarded; after that, your SSI benefits are reduced by $1 for every $2 of gross earned income. This is a work incentive because any unearned income you have reduces SSI benefits on a one-for-one basis.

Impairment-related work expenses

Certain impairment-related expenses may be subtracted from your gross income from work, reducing the amount of the SSI offset. These expenses include amounts paid for assistive or adaptive devices needed for work, costs of paratransit or taxi transportation to work, costs of adaptive automotive controls or devices, and medical expenses related to an impairment. (The impairment for which you paid medical expenses need not be the impairment for which you were found disabled; however, routine medical and dental expenses that would be incurred if you were not disabled may not be subtracted from your income.) Social Security's "Red Book" provides a comprehensive list of qualifying impairment-related work expenses (but expenses not listed may be eligible for impairment-related work expense treatment; the determination is made on a case-by-case basis).

Blind work expenses

Certain work expenses may be deducted by blind SSI recipients from gross income from work, reducing the amount of the SSI offset. The list of deductible blind work expenses is much broader than deductible impairment-related work expenses, and includes withheld taxes, all meals consumed during work hours, licenses, fees and union dues related to work or a profession, adaptive devices for blind people, and all costs of purchasing and maintaining a guide dog. A comprehensive list of qualifying blind work expenses can be found in Social Security's Red Book.

Property essential to self-support

Inventory and tools used by employees for work are not counted as resources against the SSI resource (asset) limit.

Student earned income exclusion

Certain students can claim the student earned income exclusion to have part of their income from work disregarded when determining the SSI offset for earned income. If you if you are under age 22 and are regularly attending school (in grades 7-12 for at least 12 hours per week, in college or university for at least 8 hours per week, or in a training course to prepare for employment for at least 12 hours per week or 15 hours per week if the course includes shop practice). Alternatively, individuals who are home-schooled because of their disability are also entitled to the exclusion. In 2018, students eligible for this exclusion can exclude up to $1,820 of earned income per month, up to a maximum yearly amount of $7,350.

Unincurred business expenses

Unincurred business expenses are business expenses paid by a third party, such as a state department of vocational rehabilitation, that would be treated as business expenses if they were to be paid by the self-employed SSI recipient. These expenses are deducted from gross income in determining net earnings from self-employment in the same manner as if the self-employed person had incurred the business expense.

Example: The State Department of Vocational Rehabilitation pays for Walter, a blind SSI recipient, with a rent-free kiosk in the state capitol building from which the SSI recipient operates a shop selling snacks, magazines, and sundries. The kiosk has a rental value of $500 per month. Walter can subtract the $500 per month from his gross income in the same manner as if he had paid the rent each month.

Continuing Medicaid

After your income from work reaches the point that fully offsets your SSI benefits (meaning your SSI disability benefits will stop), you remain entitled to Medicaid benefits until your gross income from work reaches a "threshold" amount. The threshold amount varies from state to state (reflecting cost-of-living differences in the various states) and is adjusted annually for inflation. Social Security's continued Medicaid eligibility page has the Medicaid threshold amounts by state. In addition, states have the option of offering Medicaid to individuals whose income exceeds the threshold amount.

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