Over 70 million Americans currently depend on Social Security benefits, and many more anticipate utilizing the program when they retire. Understanding the optimal time to begin receiving benefits is crucial, but once you apply and your monthly payments commence, there shouldn’t be much alteration, aside from the yearly COLA increase, which is beneficial for you. You might be less aware of the fact that your benefits can actually be revoked if you’re not cautious.
Although individuals contribute to the Social Security system during most of their working lives, these benefits aren’t necessarily guaranteed indefinitely, and there are certain circumstances where they can be terminated or suspended. Specifically, there are four factors that may lead to the loss of your benefits. Below, we will explain how you could lose your benefits and whether it is possible to regain them afterwards.
For further information, be sure to check out the Social Security and SSDI cheat sheet.
Benefits may be reduced or halted if you earn too much money.
While you are allowed to work and receive Social Security benefits, should you begin earning above the annual income threshold, your benefits might be lowered or temporarily suspended in some instances. These limits fluctuate depending on various factors, including whether you are younger or older than 62 — the minimum retirement age.
Here is a brief overview of the income limits set for specific benefits.
Income limits for Supplemental Security Income (SSI):
Typically, to be eligible for SSI, you must earn less than $1,971 monthly from employment. The limit is increased for couples, but if you surpass that threshold, you might lose your SSI eligibility. You will be informed of any reductions in benefits or if you become ineligible due to exceeding the income limit.
Note: For every $2 you earn from work, your SSI payment will be reduced by $1. Employment encompasses any job position you hold. You are required to promptly inform about changes in your monthly income and living circumstances.
Income limits for Social Security Disability Insurance (SSDI):
Individuals receiving SSDI have greater leeway regarding earning income from work. If you secure a job while on SSDI, you will be able to keep your benefits for up to nine months, which the Social Security Administration refers to as a “work trial period.” For 2024, any month where you earn more than $1,110 in gross income will count towards this nine-month trial period. It’s worth noting that these months do not need to be consecutive, but must occur within a rolling five-year period. During this trial period, there is no cap on how much you can earn while keeping your benefits.
Following your work trial period, you will transition into a 36-month “extended period of eligibility.” During this timeframe, if your earnings exceed the EPE threshold, you won’t be eligible for SSDI payment for that month. In 2024, the EPE limit stands at $1,550 per month, or $2,590 for those with disabilities due to blindness.
Resource limits might also affect your Social Security benefits.
In addition to an income limit, eligibility for SSI is also contingent upon meeting a “resource limit.” Countable resources include cash, bank accounts, stocks, mutual funds, U.S. savings bonds, land, life insurance, personal property, vehicles, and any other assets that could be converted into cash for food or shelter, as noted by the administration.
Resources that do not count include the home you reside in and the land it occupies, one vehicle (if it’s used for transportation by you or a household member), household goods, personal belongings, and life insurance policies with a total face value of $1,500 or less.
To qualify, the SSI resource limit is $2,000 for individuals and $3,000 for couples. If you exceed this limit, you must reduce your resources to regain eligibility. A recent study by the Center on Budget and Policy Priorities indicates that, on average, 70,000 beneficiaries lose their benefits each year due to exceeding the limit. Congress has proposed legislation that, for instance, would increase the limit to $10,000 for individuals and $20,000 for married couples, but thus far, these changes have not been enacted into law.
The dissolution of a marriage can impact your Social Security benefits. Your marital status influences your eligibility for Social Security, including the effects of a divorce. Several factors may prevent you from receiving benefits based on your ex-spouse’s record:
- Your marriage must have lasted at least 10 years.
- Remarrying will disqualify you from claiming benefits from your former spouse, though this can change if your current marriage ends in divorce, annulment, or the death of your spouse.
- You may qualify for benefits that exceed those of your ex-spouse.
- Your Social Security benefits can be affected if you are jailed or convicted.
- If you are incarcerated for over 30 days, the Social Security Administration may halt your Social Security and SSI benefits.
Regarding Social Security and Social Security Disability Insurance during incarceration:
If your benefits are suspended, you can apply to have them reinstated for the month following your release from jail or prison. It’s important to know that even if your own benefits are paused while you are in jail, your eligible spouse or children will continue to receive theirs.
Regarding Supplemental Security Income:
Your SSI benefits will be suspended while you are in prison, but payments will resume upon your release, and you won’t need to wait until the following month. The amount you receive will depend on your release date and may be a partial payment.
If you remain incarcerated for more than 12 consecutive months, your SSI benefits will be terminated. Once you are released, you will need to contact the Social Security Administration to submit a new application.