Social Security ended its plan to reduce disability payments

In early 2024, Social Security announced it was dropping a proposal that would have limited how much money people on disability could earn before their benefits were reduced. The agency had been testing a pilot program in six states that would have lowered the earnings threshold — the point at which the government starts cutting your monthly check. That pilot has been cancelled, and no new restrictions on disability earnings are being rolled out.

This matters because people receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) often work part-time or do freelance work to supplement their benefits. The proposed change would have made that harder by reducing how much they could earn without penalty. The cancellation means the current rules remain in place.

Key Takeaways

  • Social Security stopped a pilot program that would have lowered the earnings limit for people on disability benefits in six states.
  • Under current rules, SSDI recipients can earn up to a certain amount per month (the figure changes yearly) before benefits are reduced dollar-for-dollar above that threshold.
  • SSI has a different earnings rule: benefits reduce by 50 cents for every dollar earned above a monthly limit, also adjusted yearly.
  • The cancellation means no changes to how earnings affect your disability payments are being implemented at this time.

How the cancelled pilot would have worked

The pilot program, which had been running in parts of Colorado, New Hampshire, New Mexico, New York, Texas, and Virginia, would have lowered the substantial gainful activity (SGA) threshold — the earnings level that triggers a benefit reduction. Under the pilot, people would have lost benefits sooner if they earned more money.

Social Security said the goal was to test whether a lower threshold would encourage people to work more hours or earn higher wages. The agency collected data from participants but ultimately decided not to expand the program nationally. No official statement detailed why the decision was made, but disability advocates had opposed the change, arguing it would discourage work and harm people trying to balance employment with their disability.

What the current earnings rules actually are

SSDI and SSI have different earnings structures. If you receive SSDI, you can earn a monthly amount set by Social Security (in 2024, this was $1,550, though it changes each year). Earnings above that amount reduce your benefit by one dollar for every dollar you earn over the limit. Once your earnings reach a certain level, your benefits stop for that month, but they restart the following month if your earnings drop back down.

If you receive SSI, the rules are slightly more generous. You can earn a monthly amount before any reduction kicks in (in 2024, this was $65 per month plus one-third of remaining earnings). This means you keep more of what you earn before benefits are affected. Like SSDI, SSI benefits can restart in future months if earnings drop.

Both programs have a trial work period that lasts nine months. During this time, you can earn any amount without losing benefits, though you must report your earnings. After the trial work period ends, the standard earnings rules apply.

Why this matters for people on disability

Many people on disability want to work but face barriers: transportation costs, medical appointments that interfere with work schedules, or the physical or mental demands of employment. The earnings limits exist partly to ensure benefits go to people who cannot work full-time, but they also create a dilemma: earning more money can mean losing benefits, making it hard to become financially independent.

Lowering the earnings threshold — as the cancelled pilot would have done — would have made this problem worse. People would have lost benefits even sooner, potentially discouraging work altogether. The cancellation preserves the current balance, though many disability advocates argue the thresholds should be raised, not lowered, to encourage employment.

What happens if you earn money while on disability

You must report all earnings to Social Security, whether you work for an employer or are self-employed. This includes wages, tips, bonuses, and net income from self-employment. Social Security uses your reported earnings to calculate whether your benefits should be reduced that month.

If you fail to report earnings and Social Security discovers the discrepancy later, you may be asked to repay benefits you received while over the earnings limit. This is called an overpayment, and Social Security can recover it by reducing future benefit payments. Reporting is straightforward: you can call Social Security, use their online account, or visit a local office.

Some types of income do not count toward the earnings limit. Unearned income — such as interest, dividends, rental income, or money from family members — does not reduce SSDI benefits. For SSI, unearned income is counted differently and may affect your benefit amount, but the rules are separate from the earnings threshold.

Whether this decision affects you right now

If you currently receive SSDI or SSI, nothing changes about your benefits or how earnings are treated. The earnings limits that applied last month still apply this month. Social Security has not announced any plans to modify these thresholds in the near future.

If you are considering working while on disability, the current rules remain your guide. You can use Social Security's online earnings calculator to estimate how much you can earn before benefits are affected, or contact your local Social Security office to discuss your specific situation. Many people find that working part-time, even with a benefit reduction, leaves them better off financially than not working at all.

Frequently Asked Questions

Does this mean Social Security will never change the earnings rules?

No. Social Security could propose new rules in the future. This decision only means the specific pilot program has ended and no immediate changes are being made. Any future changes would likely go through a similar testing phase before being rolled out nationally.

Can I work without losing my disability benefits?

Yes, during your nine-month trial work period, you can earn any amount without a benefit reduction. After that, you can still work and keep some benefits, but earnings above the monthly threshold will reduce your check. Many people find this trade-off worthwhile.

What if I live in one of the six states where the pilot was running?

The pilot has ended in all six states. If you were participating, you are now back under the standard national earnings rules. Social Security should have notified you of this change, but you can confirm your current earnings limit by contacting your local office.

How do I know what my earnings limit is this year?

Social Security updates the SGA threshold and SSI earnings limits each January. You can find the current figures on Social Security's website, or call 1-800-772-1213 to ask. Your local Social Security office can also tell you the exact limit that applies to your case.

If I earned too much last month, will I lose all my benefits?

No. Benefits reduce based on how much you earned over the limit, not eliminated entirely unless you earn significantly above the threshold. If you earned only slightly over the limit, your benefit might be reduced by a small amount. If you earned far above it, benefits may stop for that month but restart the next month if earnings drop.