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Managing your Social Security disability benefits

Over the past few years, people in Michigan have been concerned about the state of Social Security funding. Report after report has warned that the fund is running short, including reports from the Social Security Administration itself. In June of 2018, CNBC finally reported some good news when it shared that the number of people applying for disability had declined sharply.

Thanks to this steep decline prompted by economic growth, the SSA was able to tack on another four years to its original estimate of when it would run out of money. There is still much to be done to ensure funds are not depleted by 2023, but the decline in applications means that those who still need Social Security disability can breathe easier about their continued payments.

Depletion is not the only concern people have about their payments. Many people also worry that disability payments from private sources may affect their SSD. Private sources may include insurance benefits or private pensions. The SSA has assured Americans that disability payments from the SSD are not affected by disability payments from private sources.

In contrast, SSD payments could be negatively affected by receipt of other public disability benefits, such as workers’ compensation. Accepting payment from these sources could result in a reduction of the amount paid out through SSD.

The SSA also notes that for workers who receive SSD plus workers’ compensation or other public disability benefits, there is a limit on the combined amount they can receive. The total should be 80% or less of their average current earnings before they became disabled.

There are some public benefits that do not factor into this equation. The SSA states that one of the following may be exempted from calculating the 80% ceiling:

  •          Supplemental Security Income
  •          Benefits from state and local governments, if Social Security taxes were deducted
  •          Veterans Administration Benefits

Managing Social Security disability benefits can become chaotic. On the one hand, a person who is unable to work needs all the income they can get to support themselves, support their families and pay medical bills. On the other hand, some income sources may reduce disability benefits or disqualify them altogether. As a result, it is important to tread softly and always seek professional advice before accepting new streams of income while disabled.

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