Do Disability Payments Affect Retirement

The social security payments we make during the working phase of our life help us to be able to claim benefits when we retire.  During the course of our life, we may get injured on the job.  The injury could leave us seeking medical attention for a defined period of time or it could leave us permanently disabled so we can’t return to work. 

Do these disability payments have any bearing on the amount of money you receive from the Social Security Administration when you reach retirement age?  The answer depends on when you were injured and how you were compensated for your injuries.  Before jumping to any conclusions, keep reading to find out more information.

The Social Security Administration (SSA) defines disability as a condition that is physical or mental.  It prevents you from being gainfully employed for at least a year, or at worst the condition will eventually cause death.  There is a list of conditions deemed as qualifying by the physicians consulted by the Social Security Administration.

Not all benefits that you receive as a result of disability affect the amount of social security you will receive at retirement.  One such benefit is anything you receive from the Veteran’s Administration as a result of military service.  State and local government benefits are also not counted against you when it comes to receiving social security benefits.

If you are declared disabled by the SSA, you can receive supplemental security income.  This income does not affect the amount of your retirement benefit.  To qualify for this benefit, the applicant must be blind, aged 65 or over, or disabled as deemed by the Social Security Administration. 

The monthly income earned by the applicant must be low – in fact, extremely low.  The income is around $500 a month or whatever limits are set by your particular state.  Property owned by the applicant can’t exceed $2,000 for singles and $3,000 for married couples.  The maximum benefit that you can receive per month is around $580 for individuals or approximately $870 for married couples.  The amount is subject to change depending on cost of living increases.

Workman’s Compensation payments are an example of one type of disability payment that does affect your retirement.  Other public disability programs may have the same effect.  The amount of monthly payment that you receive from compensation for work-related or other injuries can’t exceed eighty percent of what your monthly income was before you were injured.

When the amount of social security benefit you qualify for is combined with the disability payment, the total is compared to your income before you were disabled.  If this amount equals more than eighty percent of your income, the amount of social security you are entitled to is reduced until the amount you receive plus the disability payment equals eighty percent of your income.  The process will continue each month until you reach sixty-five or your disability payments end.

In summary, not all payments affect the money you will receive.  If you become disabled, check with the Social Security Administration (www.ssa.gov) for details on ways to get disability benefits without it affecting your retirement benefit.