How Does Social Security Disability Affect Pension and Other Income?
Legally Reviewed and Edited by: Terry Cochran
Social Security benefits don’t affect your other income. Rather, other programs could affect the monthly Social Security Disability benefits you receive.
As always, individual cases can vary, so it is best to get in contact with a Social Security Disability lawyer at Cochran, Kroll, & Associates, P.C for advice and detailed information.
How are my Social Security Disability benefits calculated?
To calculate your monthly disability benefits, the SSA will look at your work history and previous income. You cannot receive more than 80% of your previous income until you turn 65. However, the monthly benefits can be reduced further based on other monthly benefits.
Social Security Disability and Pensions
All private employers are obligated to pay taxes into the federal system, which circumvents the need for you to pay Social Security taxes. The taxes your employer pays come at their own cost and are intended to provide a monetary supplement to future Social Security Disability checks for employees. Therefore, these pensions will not be factored into monthly benefits. But, keep in mind that if the sum of your pension and Social Security Disability benefits reach a certain amount, your benefits may become subject to income tax.
If you had a government or public-sector position pre-dating your disability, the water becomes a little muddy. Although some government and public employees did contribute to the SSA system during their employment, some are not required to. If you are not sure if you paid into the SSA system, a Social Security Disability attorney could help you find this information.
Some states require their own pension programs separate to Social Security that public employees have to contribute to. Since these workers did not pay into the federal SSA system, their SSA disability benefits could be reduced due to the Windfall Elimination Provision.
Provision and Disability Reductions: How does it work?
Like all other Social Security processes, this one can get a little tricky. The reduction will depend on the number of years you worked during which you did pay into the Social Security system and how long you have been disabled. If you worked for 30+ years in a career that paid into the Social Security System, your benefits would not be reduced at all.
You can reference the absolute maximum reduction your benefits will encounter by using the Windfall Elimination Provision (WEP) chart located on the SSA’s website.
However, this chart is just an estimate and may not reflect your situation since reductions cannot be more than one half of your pension amount. If your benefits will be reduced, it is always recommended to get in touch with a Social Security Disability lawyer to get a better picture.
Social Security Disability and Spousal Benefits
If you are not disabled but your spouse is, you may qualify for spousal benefits under the umbrella of the Social Security Disability program. These benefits can lead to a reduction of your Social Security Benefits as subject to the Government Pension Offset. This Offset, like the WEP, only takes place if you had a job where you did not pay into the Social Security System in the form of taxes.
The Government Pension Offset and Spousal Disability
Reduction calculations in this category are much simpler than for the WEP offset. Your spousal disability or survivor benefits can be reduced by â…” of your total pension. If your pension is worth much more than your spousal or survivor benefits, these checks can, unfortunately, be completely eliminated as there is no maximum reduction in this category.
Generally, you can sum up the complicated reduction regulations by noting that disability payments from private sources, including private pensions or insurance benefits, will not affect your Social Security Disability benefits.
Public disability benefits, like worker’s compensation, however, can lead to reductions. However, three public benefits systems will not reduce your SS disability benefits, including Veterans Administration benefits, State and local government benefits, and Supplemental Security Income (SSI).
Should you have any questions regarding your specific situation, do not hesitate to get in contact with some of the best social security benefits lawyers in Michigan by contacting Cochran, Kroll, & Associates, P.C. at 866-MICH-LAW.
Disclaimer : The information provided is general and not for legal advice. The blogs are not intended to provide legal counsel and no attorney-client relationship is created nor intended.