It generally takes around 10 months to receive decisions at both the Initial application stage and the Reconsideration stage, while it can take 6-12 months to receive a decision from an Administrative Law Judge (ALJ) at the Hearing Level. If one has to file multiple appeals, it often takes at least two years from the time the initial application is filed until a decision is received from an ALJ. In light of the length of time it takes for an SSDI application to be reviewed, a question our firm often receives is whether one is allowed to work while an application for SSDI is pending. Let's examine this issue by starting at the beginning of the Sequential Evaluation Process (SEP).
What is Step 1 of the Sequential Evaluation Process (SEP)?
The Social Security Administration (SSA) engages in a five-step evaluation known as the Sequential Evaluation Process (SEP) in determining whether an individual meets SSA's definition of disability. Step 1 of the SEP asks whether you are currently working. If the SSA determines that an individual is working, the individual is determined to be not disabled and SSA will conclude the analysis after Step 1 of the SEP. However, how does the SSA define “working”?
How Does the Social Security Administration Define “Working”? The Importance of Understanding Substantial Gainful Activity (SGA)
In general, SSA's policy is that an individual is considering “working” for Step 1 purposes if they are engaging in Substantial Gainful Activity (SGA). SGA amounts change yearly. In 2022, the amount that is considered SGA is $1,350 per calendar month. It is important to note that for purposes of determining SGA, the SSA looks at pre-tax earnings.
This means that, in 2022, earnings of $1,350 and above (pre-tax) in a calendar month will be considered SGA. However, an individual can earn up to $1,350 (pre-tax) in a calendar month in 2022 without reaching the SGA threshold. In other words, if you earn below $1,350 a calendar month in 2022, your SSDI claim can't denied at Step 1 of the SEP. Still, the question remains: is there any downside to working while a claim for SSDI is pending?
What is a Trial Work Period (TWP)?
There are a number of factors to consider in determining whether you should work while your SSDI claim is pending. Addressing all of these factors is beyond the scope of this post. However, we do want to discuss an important factor to consider: the Trial Work Period (TWP).
The SSA provides individuals who are receiving SSDI benefits with the option to test out their ability to return to work in a number of ways. We will focus on a TWP, although there is also the option of having a return to work be considered an Unsuccessful Work Attempt (this will be examined in more detail in a later post).
During a TWP, someone can engage in SGA for up to 9 months in a 60-month rolling period and continue to receive SSDI benefits. The 9 months do not need to be consecutive. A TWP is potentially a very valuable tool available to individuals who have been eligible for SSDI for at least 12 months. Therefore, it is important to keep in mind the following factors when deciding whether you want to work while your SSDI claim is pending.
First, you can use up the 9 months of a TWP even prior to having your claim for SSDI approved.
Second, the amount of monthly earnings that counts as a month for purposes of a TWP is less than SGA. These amounts change yearly. In 2022, earnings of $970 (pre-tax) and above in a calendar month will be counted as one month of the TWP.
Let's see an example that illustrates these points: John applied for SSDI on August 1, 2020, alleging disability beginning on January 2, 2020 – the date he stopped working. He has a hearing with an ALJ scheduled for December 2022. John desperately needed money and began to work part-time on March 1, 2022, earning $1,000 a month (pre-tax) in each month since March 2022.
In this example, John has not engaged in SGA since his alleged onset date of disability of January 2, 2020. Accordingly, his claim will not be denied at Step 1 of the SEP. However, if the ALJ approves John's claim for SSDI beginning as of January 2, 2020, John will have used up all of his TWP months by the time he receives the favorable decision from the ALJ. This can potentially cause complications in the future, should John continue to work or decide he wants to attempt to return to work full-time.
The rules regarding calculating SGA and TWP can be complex and require consideration of a number of factors. Our firm can answer questions you may have regarding these issues and help you understand how continuing to work while your SSDI claim is pending might potentially affect your SSDI claim.
This article provides general information only. It is not intended to provide legal advice and does not form an attorney client relationship.