Reductions in Social Security Disability Benefits

Welcome to Season 1, Episode 43 of Winning Isn't Easy: Navigating Your Social Security Disability Claim. In this episode, we'll dive into the complicated topic of "Reductions in Social Security Disability Benefits."

Many people assume that once Social Security Disability benefits are approved, the hardest part is over. In reality, benefits can be reduced, suspended, or taken away long after approval - often without warning. A few extra hours of work, a change in medical status, or a missed report can trigger serious financial consequences. In this episode of Winning Isn’t Easy, we explain the most common ways SSD benefits are affected after approval and why so many beneficiaries are caught off guard. A sudden drop in payments doesn’t always mean you did something wrong - but it does mean the rules are more complex than most people realize. We start with how work activity and income impact benefits, including what the Substantial Gainful Activity (SGA) limit really means, how the Trial Work Period works, and what happens during the Extended Period of Eligibility. We then cover other frequent causes of reductions, such as medical improvement reviews, overpayments, incarceration, debt offsets, and changes in assets or living arrangements. Finally, we examine the Windfall Elimination Provision, explaining who it affects, why it reduces benefits for certain federal, state, and military employees, and what the Supreme Court’s decision in Babcock v. Kijakazi means for National Guard dual-status technicians. By the end of the episode, you’ll have a clearer picture of how SSD benefits can be disrupted, which problems are preventable, and how to take proactive steps to protect the benefits you’ve earned.

In this episode, we'll cover the following topics:

One - Work and Income-Related Reductions

Two - Medical, Financial, and Other Factors

Three - National Guard Dual Status Technicians and Reduction of Social Security Benefits Under the Windfall Elimination Provision

Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.


Listen to Our Sister Podcast:

We have a sister podcast - Winning Isn't Easy: Long-Term Disability ERISA Claims. Give it a listen: https://wiedisabilitypodcast.buzzsprout.com


Resources Mentioned In This Episode:

LINK TO YOUR RIGHTS TO SOCIAL SECURITY DISABILITY: https://mailchi.mp/caveylaw/your-rights-to-social-security-disability-benefits

FREE CONSULT LINK: https://caveylaw.com/contact-us/


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Need help with your Social Security Disability claim? Have questions? Please feel welcome to reach out to use for a FREE consultation. Just mention you listened to our podcast.

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Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals.

Transcript

Nancy Cavey [00:00:17]:
 Welcome back to Winning Isn't Easy Social Security Disability Benefits this is a podcast where we break down everything you need to know about navigating the Social Security system. I'm your host, Nancy Cavey. Before we get started, I have to give you a legal disclaimer. This podcast is not legal advice. The Florida Bar association says I have to say that. And now that I've said it, nothing will ever prevent me from giving you an easy to understand overview of the Social Security disability claims process, the games that are played, and what you need to know to get the disability benefits you deserve. So off we go now. Today I'm going to take a closer look at something that doesn't get talked about nearly enough.
 
 Nancy Cavey [00:00:59]:
 The main ways that your Social Security disability benefits can be reduced, suspended, or even taken away now. From working above the earnings limit called sga, to changes in your medical conditions, to incarceration or unexpected debt offsets. These reductions can catch beneficiaries off guard and result in some very serious financial consequences. If you've ever relied on Social Security disability benefits, you know how critical that monthly check is. So when the amount suddenly drops or stops, it can cause panic. Maybe you went back to work part time only to find out later that your income pushed you over what's called the Substantial gainful activity Limit sga. Or maybe your condition improved and Social Security decided that you were no longer disabled. Sometimes it also can be simple mistakes like missing reports or changing your living situation that no one told you could affect your payments.
 
 Nancy Cavey [00:01:59]:
 But that's why we're having this episode today, because most people don't understand that there are opportunities for Social Security to reduce your benefits and that many of these reductions are preventable. And even when there aren't, there are ways to minimize the impact and plan ahead. So understanding how the Social Security rules work, in my view, is the key to protecting your benefits and avoiding surprise interruptions. In this episode, I'm going to break down how work activity and income can affect your benefits, including what the substantial gainful activity limit really means and how the trial work create an extended period of eligibility can fit into the picture. Then I'm going to look for other reasons that benefits can be reduced, from medical improvement to overpayments to debt incarceration and changes in assets. Finally, I'm going to dig into one of the most complex areas of all windfall elimination provisions that can reduce benefits for certain state, federal and military employees and what the Supreme Court recently said in a case called Babcock versuskowski which is talking about the National Guard Dual Status Technicians and the impact of that income on benefits. It's almost sort of like going to law school. But by the end, I want you to have a clear understanding of how you can protect your benefits, what red flags to watch for, and how to take proactive steps to make sure you're getting and keeping the benefits you earn.
 
 Nancy Cavey [00:03:31]:
 So what am I going to cover? 1. Work and income related reductions 2. Medical, financial and other factors that can relate to reductions and three National Guard Dual Status Technicians and the reduction of benefits under the windfall elimination provision. Got it. Let's take a break.
 
 Speaker B [00:03:50]:
 Are you considering filing for Social Security disability or has your claim been denied already? Either way, you require a copy of your rights to Social Security disability benefits, which will cover everything you need to know about the Social Security Security disability claims process. Request your free copy of the book@kvlaw.com today.
 
 Nancy Cavey [00:04:31]:
 Welcome back to Winning Isn't Easy. Work and Income Related Reductions Now, Social Security disability benefits are designed to replace income for people who can no longer perform substantial work because of serious medical conditions. However, once a person begins working or earning income while collecting Social Security disability benefits, that income can result in the reduction of benefits or even termination, depending on the level and duration of work activity. I'm often asked, well, can I go back to work? And here comes that answer. But before I answer that question, we need to set some baseline, and the baseline is what's called Earning Over SGA limit. Now, every year the Social Security Administration sets what's called a Substantial gainful activity SGA threshold. Essentially, it's a monthly earning cap that helps determine whether your disability still prevents you from engaging in full time work. Now for 2025, the SGA limit is $1,620 per month for non blind individuals and $2,700 for those who are statutorily blind.
 
 Nancy Cavey [00:05:39]:
 If your average monthly income exceeds these limits, you're not even eligible to collect Social Security disability benefits. Generally, Social Security may determine you're engaging in what's called substantial work and reduce or stop your benefits. But it's important that you understand that Social Security is going to look not only at your gross pay, but the nature of your work and whether it shows that you can sustain competitive employment. Now the next thing we need to understand is we've got an SGA basic number. But if you're collecting Social Security disability benefits, you can qualify for something called the trial work period and potentially the extended period of eligibility. TWP and EPE Social Security will provide a safety net called trial work period, allowing you to test your ability to work for up to nine months, which does not need to be consecutive, but that has to be nine months in a rolling 60 month window. And during this period you can earn any amount and still receive your benefits. But you have to enroll in the TWP program.
 
 Nancy Cavey [00:06:48]:
 Now, after TWP ends, you you can enter what's called an extended period of eligibility EPE lasting for 36 months, during which your benefits are payable only for the months in which your earnings are below that SGA level. Once you consistently earn over the SGA level after you've done epe, your benefits will stop, but they can be reinstated quickly through expedited reinstatement if you have to stop work again due to your disability. Now, there also can be an impact based on changes in living situation. Now, as part of the award for Social Security benefits, you become eligible for medical benefits. And medical benefits can be impacted by where and how you live. For example, if you move into a hospital, nursing home or other institution where Medicaid covers your care, your your cash benefits could be reduced to a minimal amount. It's often $30 a month because Social Security is using the balance, if you will, of your Social Security benefits to fund, if you will, your medical benefits. Now let's take a sidetrack.
 
 Nancy Cavey [00:08:02]:
 If you're collecting what's called ssi, Supplemental Security Income, that is asset based, and as your living situation or assets may change, you may lose your eligibility for ssi. So if you start receiving room and board assistance from friends or family, SSA may consider that to be in kind support and that can lower your SSI payment. Under the SSI rules. Even moving to a different state can matter since some states will supplement federal disability benefits differently. So of course we're talking about SSD and ssi. Now let's talk a minute about family income and dependence. For children receiving SSD benefits based on their parent earnings or SSI benefits based on need, family income becomes a significant issue. The SSA uses a process called deeming.
 
 Nancy Cavey [00:08:57]:
 So part of the parent's or spouse's income is going to be counted as available to the child or the dependent. And if the family's total earnings rise, then the child's monthly payments can be reduced or even suspended. Conversely, if the household income decreases, the child benefits can increase again after review. So obviously this is really complicated, but you need to understand if you're getting Social Security disability benefits and want to return to work, you have to be cognizant of the SGA number and you want to enroll in a trial work period or an extended work period. If you don't enroll and your money, the pay that you're getting is over SGA Social Security may become knocking in the form of a letter saying you've been overpaid. We want our money back. And by the way, your benefits are over. If you have a child who's collecting ssi, your income is going to be the family income is going to play a significant role in whether these benefits continue and the amount of those benefits.
 
 Nancy Cavey [00:10:04]:
 Got it. Let's take a break. SAT welcome back to Winning Isn't Easy. Medical, financial and other factors that can impact your continued Social Security or SSI benefits. I will tell you, work and income are major reasons for benefit reductions because the person is over sga. But there are other factors that can impact how much you receive and whether you continue to qualify at all. Let's first talk about medical improvement and continuing disability reviews. Now, the Social Security Administration conducts what's called continuing disability reviews to determine whether your medical condition is improved enough so that you can return to work.
 
 Nancy Cavey [00:11:16]:
 The frequency of these reviews depends on the nature of your medical condition and the prognosis. If improvement is expected, you can expect that your case will be reviewed about every 12 to 18 months. If improvement is possible but not predictable, the review will generally occur every three years. And for conditions that are considered permanent or unlikely to improve, the Social Security Administration can review your case every seven years. That's ranges, and I don't make the determination. Judges who hear cases can recommend the period of time, but ultimately it's the Social Security Administration that's going to make the decision as to whether there's a CDR and the timing of that cdr. But remember, if the review finds that your condition is improved to the point where you can perform gainful work, your benefits are going to be terminated. You're going to get notice of termination.
 
 Nancy Cavey [00:12:12]:
 You're going to have certain rights and responsibilities to challenge this. And you obviously have the right ultimately to go in front of a Social Security judge. I will tell you another problem is failure to report changes. Now, beneficiaries are legally required to report any changes in work activity, medical conditions, living arrangements, or marital status within 10 days after the end of the month in which the changes occurred. Why? Well, because, For example, let's say you have a minor who was collecting Social Security benefits on your record because of your disability and they crossed that age threshold and they're no longer a minor, but they're still getting paid that failure to say hey wait a second, I'm no longer eligible can lead to overpayment and that can lead to penalties and even result in fraud investigations. So what do I mean? Let's say you are working over SGA and you're still collecting benefits and you're not in a trial work period and Social Security discovers it, as they generally will because they get out access to work records and tax records and they find out that you have been working. But they're going to come knocking in the form of letters saying hey, wait a second, you've been overpaid. And by the way, we think you actually are committing fraud and we're going to withhold future payments.
 
 Nancy Cavey [00:13:46]:
 We want to be repaid. And by the way, we may even refer this case for litigation. Now how about debts and overpayments? The Social Security Administration can withhold a portion of your monthly income to recover debts owed to the government. That can include for default student loans, back taxes and child support obligations, or even overpaid disability benefits. Typically, Social Security can withhold 15% of your monthly benefits to recover non tax debts and and even more for tax related obligations. Now your beneficiaries can request a waiver or repayment plan if withholding would cause financial hardship. But in my view, it's best to address overpayment issues early to avoid compounding the debt and causing financial issues. How about incarceration? If you've been incarcerated for more than 30 days following the conviction of a crime, your Social Security disability benefits will be suspended for the duration of your confinement and benefits can resume once you're released.
 
 Nancy Cavey [00:14:53]:
 But you have to notify the Social Security Administration and you have to provide documentation of your release. It's worth noting that while your benefits are going to stop during incarceration, family members who are receiving payments on your record may continue to receive their share. How about Medicare premiums and deductions? Now when you qualify for Social Security disability benefits, you don't get paid for the first five months and after 24 months of payment, you become eligible for Medicare. If your income changes or you fall into a higher premium bracket, your Medicare Part B and D premiums may increase, reducing the amount of your net Social Security benefits. And Social Security often was reducing, I'm sorry, deducting these premiums directly from your monthly payment check. How about changes in assets and eligibility if you're an SSI recipient? Now, SSI Supplemental Security Income is asset based. The limits are really strict. $2,000 for individuals, $3,000 for couples exceeding These limits, through having a savings account, inheritance or property, or getting support from family or friends can cause benefits to be reduced or stopped entirely.
 
 Nancy Cavey [00:16:11]:
 Now I want you to understand that certain assets like a home you live in or one vehicle are excluded. But Social Security is going to check bank accounts and financial records to verify compliance with these asset numbers. They're going to get tax records and check. So remember, you've got to be compliant with the rules and regulations. Otherwise you're exposing yourself to overpayment, potentially an argument that you've committed fraud and maybe even prosecution. And we don't want to go there, do we? Let's take a break.
 
 Speaker B [00:16:45]:
 Struggling with your Social Security disability case? The right attorney can make all the difference get our booklet the Key to hiring a Great Attorney for your Social Security Disability case. Discover how to find an experienced attorney who will fight for your right rights and navigate the process with ease. Don't leave your future to chance. Request your free copy@kvlaw.com today and ensure you have the expert support you deserve.
 
 Nancy Cavey [00:17:26]:
 Foreign. Welcome back to Winning Isn't Easy. Let's talk about National Guard Dual status technicians and the reduction of Social Security benefits under the Windfall Elimination provision. Now this is going to sound law schoolish, but it's practical reality here. Congress enacted the windfall elimination provision WEP to prevent retirees from receiving a disproportionately high Social Security benefit if they earned a pension from employment not covered by Social Security taxes, such as federal, state or certain military related jobs. The idea was to ensure that Social Security benefits remain proportional to the time you actually contributed through payroll taxes. There is a narrow exception to the WEP found in 42 US code section 415 parens a parens 7 parens a Roman numeral III. Now that applies if you are getting a pension that is based wholly on service as a member of the uniformed services.
 
 Nancy Cavey [00:18:33]:
 But one of these legal questions that we lawyers always think about is are there any exceptions? And the question has existed as to whether this exemption applies to dual status military technicians who are federal civilian employees who have to serve in the National Guard as a condition of their employment. So dual status technicians are a hybrid. They are full time federal civilian employees who provide essential administrative, technical and maintenance support to the National Guard. But they also have to maintain active membership in the Guard. They have to wear a military uniform while doing their civilian duties. Their compensation and benefits are structured to reflect this dual nature. Part of their service is military while the other is purely civilian. And because of this hybrid rule, the technicians receive both a civil service pension based on their civilian employment and a military pension based on their Guard service.
 
 Nancy Cavey [00:19:30]:
 So the issue in this particular case, the Babcock case, was whether their civil service pension triggered a reduction in their benefits, Social Security benefits under the windfall elimination provision. And ultimately this involved a question of reduction of Social Security retirement benefits. And Babcock argued that his civil service pension should be exempt because his position required uniform military service. And the Supreme Court said, no, the Congress's exemption applies only to pensions based wholly on on service as a member of the uniformed services, not those earned in a civil civilian capacity. And the court said, look, we know that you have to maintain National Guard membership, but the technician role is classified as civil employment under the federal law, and therefore the civil service proportion of their pension was subject to the windfall elimination provision, resulting in a reduction of the benefits. So again, this is a little quirky thing that I thought you might be interested in because it's a potential reduction depending on the nature of your Social Security benefits. So lots of law here today, lots of rules, lots of regulations. But these rules and regulations can have significant and profound financial implications for you and your family.
 
 Nancy Cavey [00:21:03]:
 Hope you took notes. And if you have any questions, obviously you should be consulting with Social Security. Every case is unique, and this is not necessarily something that we Social Security disability lawyers get involved in because we generally handle initial claims recons and requests for hearings. And we do handle claims involving continuing disability reviews, but generally it's outside of our purview. It's not something necessarily that I handle. I handle those four things that I talked about initial claim recon, hearing and CDRs. Okay, got it. Well, I hope that you have found this episode of Winning isn't easy helpful.
 
 Nancy Cavey [00:21:40]:
 Please take a moment to like our page, leave a review, and share it with your family and friends. And of course, subscribe to this podcast so that you get notification when another episode drops. Thanks for listening in to this episode of Winning Isn't Easy. Look forward to talking with you on our next podcast. And by the way, we love to hear from you. At the beginning of each episode description, you'll find a link where you can send us your questions and comments and I'll feature them in a future episode. Got it. Take care, Sam.