Tuesday, November 24, 2009

Social Security Disability, Reporting Earnings, and Subsidized Work

Someone recently left some questions regarding a social security disability scenario that involved a return to work. Here is the comment re-posted, along with the response.

"In regards to working during the SSI Application process-- my husband stopped working in January due to his condition (even before then he wasn't working very much anyway & he was working for my parents). He just couldn't handle working anymore b/c of his condition & my parents needed someone who could work a consistent/dependable schedule.

However my parents have so graciously extended the offer for my husband to come work for them when he is able (a day a week or so, temporarily). We need to pay the bills so we are considering it. His condition involves mental illness and migraines (so he can have a good day, bad day, good hour, or bad hour depending on when his conditions/episodes flair up from nowhere...which is most of the time).

Which would send more of a red flag up with Social Security-- 1) that he's NOT working AT ALL even though he has conditions that wax/wane in nature (causing him to feel 'okay' on some days), or 2) if he's working any hours period(even if it's part-time for my parents)?

I read on another website that there is an exception where even if you are working at an SGA level, but the work is not competitive: you either got a job through a friend or family member and you're not held to the same standards as another worker in the same position...that the value of his work would be less.

This is exactly what's happening in this case. Even when he worked part-time for my parents before January...if he hadn't been family they would have fired him months prior to that, since he was so undependable and couldn't work very much. And now they have only graciously offered flexible, temporary work because he is family.

Also, this may be a touchy subject, but does Social Security check bank records? I'll admit that my parents let him work a little (a couple of times a month) between January and now, but they paid him cash (which we deposited in our bank). We are willing to admit this minimal income to Social Security if we need to, but I don't know if it will cause more harm than good to do such."

I am guessing that you are talking about the Social Security disability and SSI disability application process. It really does not matter in your case. One has to be very careful about work activity when filing for disability. Although the information you read elsewhere is correct on the face of it, there is no guarantee that an individual can work SGA and simply state that he or she is working at a job through family or a friend. This kind of work activity is reviewed on a case by case basis. However, in your husband's case it seems that he is truly performing work that is being subsidized by your parents. Additionally, it seems that his work is probably not worth what they are paying him.

As far as your question "Which would send more of a red flag with Social Security....?", I think that in your husband's situation the fact that he does not work at all would not send any red flag to Social Security. Really, I do not see that your husband's work activity of one or two days a week would send a flag up to Social Security unless it is over the SGA amount.

However, all work activity should be reported to Social Security so it can be documented as subsidized work. Even if your husband is earning under SGA, his work activity must be documented in his disability claim file (especially if it involves W2 or 1099 earnings). Undocumented earnings could slow down the processing of your husband's disability claim even if the earnings are not considered SGA due to subsidy from your parents.

Social Security is not going to look at your bank account and naturally assume the money in it is from your husband's work activity, so I see no problem with your parents paying cash. However, work on a cash basis is evaluated like any other work if it is found. For instance, if your husband was working forty hours per week and being paid cash, he would not be able to file for disability on the basis that he was performing SGA unless he could prove that he was performing subsidized work. I can not suggest what an individual should do about informing Social Security about work that is paid in cash, except to say it is unlikely to cause a problem unless your parents were issuing a 1099.

Now, back to the bank account question, Social Security only asks permission to see bank account information if an individual is filing for SSI or Social Security disability and SSI. SSI is a need based program that requires a verification of resources (bank accounts, 401K,vehicles, stocks, bonds,land, trust funds, etc) and income (wages, pensions, unemployment, etc), therefore bank accounts are verified to ensure that an individual meets the resource limits. Currently the resource limit for an individual is 2000.00 (including bank accounts, extra vehicles, etc) and 3000.00 for a couple.

Just keep in mind, that any work that is reported on a W2 or 1099 can be verified by Social Security. Additionally, many individuals are reported each year to Social Security for work that is performed on a cash basis by acquaintances or even friends, so your husband should be careful.

Return to the Social Security Disability SSI Benefits Blog

Other Posts

Should you File Your SSDI Disability Appeal Online?
SSDI and working -- or not working
Who Qualifies for SSI Disability Benefits?
Social Security Disability and Proving you Can't Work - Other Work
Social Security Disability Income - SSDI
Review of my SSDI Case
What is a Qualifying Disability for Social Security?
Social security disability application
Social security disability denied
Qualifications for Disability - Social Security (work credits) and SSI



Blogger XZillR8 said...

Thank you for the response. My son is already getting SSI. Is there a maximum amount of money they will pay out to our household as a whole? I wasn't sure how much SSI my husband might end up getting or how to calculate that, and I also didn't know if my son's SSI check would impact that amount.

Also, something I should also mention is that my husband forgot to file his tax return from years ago (he didn't have the money to pay it at the time and then he forgot to file). He is only 1 or 2 points away from qualifying for SSDI. Would you recommend that he file that old tax return in hopes of gaining enough points for SSDI? If we were to file the tax return today, would Social Security count those points toward his SSDI right away? We are planning on applying for disability in person on Monday.

In addition, I'd like to thank you so much for your blog. It has been a tremendous help. You are truly a blessing.

11:01 AM  

Post a Comment

<< Home