Social Security benefits serve as a lifeline for millions of people, including the elderly, disabled and dependents. If you believe you can’t lose your benefits, then you are wrong.
The Social Security Administration (SSA) can discontinue your benefits if certain conditions are met. Losing your benefits could be scary as it could ruin your retirement. In this article, we will discuss ways you can lose Social Security benefits, Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
Many people have lost their benefits due to these ways. A report from NPR noted that about 70,000 Social Security recipients see their benefits revoked each year. Knowing how you can lose Social Security benefits is important if you are already collecting benefits or planning to collect them soon.
Many lose their benefits due to a mistake, while for some, it is unavoidable. In some cases, in fact, losing your benefits could be a better option to earn more money. The following are the ways you can lose Social Security benefits:
You make too much money
If you are working while receiving benefits, it could impact your benefits. If you earn more than the set limit, the SSA can forfeit your benefits. Usually, the benefits are for people who make $1,971 or less each month, and if your income exceeds the threshold, you won’t qualify for benefits. If you are working and earn more than the threshold, the SSA reduces your benefits by $1 for every $2 you make.
If you receive SSDI benefits, you can go back to work for up to 9 months without losing benefits. After nine months, if you are earning $1,550 or more per month, the SSA will consider it as substantial gainful activity and may suspend your benefits for the months you’re earning above the threshold during the 36-month re-entitlement period (excluding the earlier nine months).
You go to jail or prison
The SSA may suspend your benefits if you are in jail or prison for more than 30 days. Your benefits restart after you are out of jail or prison.
If you are on Social Security benefits, your benefits will be reinstated starting the month after your release. Though the SSA suspends your benefits, the benefits of your spouse or children continue, provided they are eligible.
In case you are in jail or prison for more than 12 consecutive months, your Supplemental Security Income (SSI) will be terminated. You will then have to contact the SSA at 800-772-1213 and file a new application once you’re released.
You get divorced
If you are divorced or planning to have one soon, you may lose your ex-spouse’s Social Security benefits if certain conditions are not met. For instance, if you weren’t married to your ex-spouse for 10 or more years, then you will lose your benefits.
Also, if you remarry, you won’t be allowed to collect benefits on your former spouse’s benefits. You will, however, again be allowed to collect benefits (based on your ex-spouse’s benefits) if your current marriage ends due to annulment, divorce or death.
You will also lose your spousal benefits if you are entitled to benefits based on your own work record, and your own benefit amount is more than that of your ex-spouse’s benefits.
Your medical condition improves
Improvement in your medical condition will impact your SSDI, not your Social Security benefits. You are eligible for SSDI only if you are disabled. So, your benefits will stop if your condition improves.
The SSA periodically reviews your condition after it approves your SSDI to determine whether or not you are still disabled and qualify for benefits.
Usually, the SSA reviews the case once every three to seven years, but it may review a case sooner in specific situations. For example, the SSA will review your case when you return to work, or there is evidence that your medical condition has improved or a new treatment is introduced.
If the SSA stops your benefits because of an improvement in your medical condition, you can appeal the decision.
Your volunteer work is considered a substantial gainful activity
Yes, your volunteer work may result in the termination of your SSDI. Always remember that the SSA not only considers money when reviewing your SSDI. So, if the SSA believes the volunteer work you do is a “substantial gainful activity,” the agency may no longer consider you disabled, resulting in losing your benefits.
This in no way means that you should stop volunteering; rather, you should be careful when picking volunteering work. Certain volunteer jobs could raise a red flag with the SSA, such as bookkeeping for a non-profit, stocking shelves for a food pantry and other similar jobs.
You reach retirement age
You can’t receive both retirement benefits and disability benefits at the same time. Once you reach your retirement age, your SSDI benefits will cease, and your benefits will start.
Claiming early
The SSA may forfeit up to 30% of your benefits if you claim early. Though you can claim benefits as early as 62 years, the FRA (full retirement age) – when you are entitled to full benefits – is 67. So, if you claim benefits prior to 67 years, your benefits will be reduced. For instance, if you claim benefits at 62 years, you will receive only 70% of your full payment.
Additionally, you may also lose some of your benefits in the form of taxes. Individual filers with income more than $25,000 a year (more than $32,000 for joint filers) will have to pay federal income taxes on their benefits. Many states also tax Social Security benefits as income.
