Impairment-Related Work Expenses and Disability Benefits

7/2024

Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are two federal disability benefits programs that provide monetary assistance for people with disabilities. Both programs allow recipients who work to deduct certain work-related expenses from their countable income. This can make it easier to qualify for benefits or, in the case of SSI, to receive a larger payment.

Who Exactly Qualifies for SSDI and SSI?
You may be able to receive SSDI if you have a qualifying disability that prevents you from working. The Social Security Administration (SSA) sets the definition for what counts as a disability.

You also must have worked a job long enough (or recently enough) to meet the SSA’s requirements for SSDI. In the job you held, you would have had to have paid into the Social Security system, too. (Learn more about how much work history you would need via the SSA website.)

Meanwhile, individuals who are eligible for monthly Supplemental Security Income payments live with a qualifying disability and must have limited resources. The threshold on one’s income is quite strict; in most states, the SSI applicant can’t have more than $2,000 in assets to qualify. SSI payments help the individual cover the costs of such basic needs as food, clothing, and shelter. Receiving SSI also serves as a way to access Medicaid coverage automatically.

SSDI and Substantial Gainful Activity
As mentioned above, to qualify for SSDI, an individual must be “disabled.” Under federal law, this means that the person has a physical or mental impairment that prevents them from working.

The SSA defines work in this context as “substantial gainful activity” (SGA). SGA is work that involves significant physical and/or mental activities for which the individual receives payment or profit. The person’s impairment also must have lasted, or likely will last, for longer than one year or result in death.

If you are working and earning more than $1,550 a month from employment (in 2024), the SSA will say that you are engaging in SGA. So, if a potential SSDI recipient works part time and earns $1,600 a month, the SSA does not consider them disabled. As a result, the individual will not qualify for SSDI benefits.

Fortunately, an SSDI recipient’s assets and unearned income don’t count against them. So, another person may not be able to work but has $10 million in the bank. Even if this account generates $10,000 a month in interest for them, this person will still qualify for SSDI. That’s because their income does not come from them working.

SSI and Unearned Income
Supplemental Security Income treats income differently. The SSA reduces an SSI recipient’s benefit by 50 cents for every dollar that recipient earns from working. It also reduces their benefit by $1 for every dollar of unearned income they receive.

If the SSI recipient’s award drops to zero as a result of these reductions, they will lose their SSI benefits. This makes SSI a much more restrictive program than SSDI. Unearned income harms the SSI recipient, but not the SSDI recipient.

Impairment-Related Work Expenses
If an SSDI or SSI recipient has unreimbursed impairment-related work expenses that allow them to do their job, the SSA will allow them to deduct those expenses from their countable earned income. For an SSDI recipient who may be slightly over the SGA limit, this reduction could allow them to qualify for benefits. For an SSI recipient, the reduction could mean gaining access to SSI or getting increased benefits.

For an expense to qualify as an impairment-related work expense, the person with the disability must pay for it, not any other source (including insurance). Impairment-related work expenses must:

• be an item or service that allows the individual to work,
• be necessary because of the person’s impairment, and
• have a cost that is in line with comparable goods and services.

It does not matter if the individual also uses the item or service in settings other than their workplace.

Some examples of impairment-related work expenses that a working person with a disability can deduct include the following:

• Attendant services on which the worker relies to get to work or perform their job once they are there
• Medical devices and non-cosmetic prosthetics often qualify
• Medications that insurance does not pay for and that control the person’s disabling condition so they can carry out their job
• Specialized transportation services, but not public transportation

Work With Your Attorney
As is the case with any SSI or SSDI question, it’s best to consult with your special needs planning attorney to determine whether your expenses qualify as impairment-related work expenses.