What Counts as “Earnings” for Social Security Disability?

Whether you are planning to apply for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, or both, through the Social Security Administration (SSA), the definition of “earnings” will be important for you. For SSDI, eligibility is not based on earnings or assets, but your average indexed monthly earnings (AIME) is a figure that the SSA will determine based on your work history and will use it to determine the amount of your monthly SSDI payment. Eligibility for SSI benefits — different from SSDI benefits — is based on having limited income and assets. As such, what counts as income or earnings will be critical for determining SSI eligibility.

When the SSA refers to your earnings or wages, what does it mean? Our national disability benefits lawyers can tell you more, and we can assist you with your Social Security disability application when you get in touch with us to discuss the specific details of your case.

Defining Earned Income Under the Code of Federal Regulations 

The SSA uses definitions in the Code of Federal Regulations for making determinations, including what constitutes a “disability” and what counts as “earned income,” or earnings or wages. The Code of Federal Regulations says earned income “may be in cash or in kind,” and it can include any of the following:

• Wages paid in cash, meaning the amount of money you are paid by an employer while working as an employee;
• Cash wages paid to service members;
• Wages that are paid to you “in kind,” meaning you receive something of value in exchange for your labor, such as housing, food, or clothing;
• Net earnings from your self-employment;
• Refunds from your federal income taxes;
• Payments you receive for work in a program that is designed to help you to be able to support yourself, such as a sheltered workshop or a work activities center;
• Royalties received for publication of any works; and
• Honorariums received for a service provided, such as for a lecture given.

Calculating Your AIME Based on Earnings 

The term “countable income” refers to the amount of your income that is counted for purposes of determining SSI eligibility. To be very clear, it is not a term used in relation to calculating your AIME for SSDI payments. The calculation of the AIME requires the SSA to look at your past earned income, which can include “up to 35 years of earnings.” How does this actually work?

As the SSA explains, it will first determine the number of years it needs to look at your earned income, and then it will “choose those years with the highest indexed earnings, sum such indexed earnings, and divide the total amount by the total number of months in those years.” Then the SSA will “round the resulting average amount down to the next lower dollar amount.” That amount is your AIME.

Contact a National Disability Benefits Lawyer 

If you have any questions at all about how your past earnings will affect your eligibility for Social Security disability benefits, or the total amount of your monthly payment you can expect to receive, an experienced national SSDI benefits lawyer at the Law Offices of Stephen Barszcz can help. We are here to answer your questions today. Contact us for more information.

Sources:

ssa.gov/OP_Home/cfr20/416/416-1110.htm#:~:text=Wages%20include%20salaries%2C%20commissions%2C%20bonuses,received%20because%20of%20your%20employment

ssa.gov/oact/cola/countableincome.html

ssa.gov/oact/cola/Benefits.html#:~:text=After%20we%20determine%20the%20number,The%20result%20is%20the%20AIME