Social Security is not only meant to serve only retirees but also people with disability through Social Security Disability Insurance (SSDI).
If you are currently collecting Social Security payments or intend to do so in the near future, it’s prudent to be aware of certain actions which could reduce your total benefits.
Here are seven ways in which you could lose Social Security benefits.
Claiming your benefits early
You will get your full Social Security benefits if you retire at the age of 67 or beyond. If you decide to claim these benefits before this deadline, you can potentially lose up to 30% of the benefits.
For example, if you claim the benefits at 65, you will get only 86.7% of the total benefits. The earliest you can claim the benefits is at the age of 62, but at this age, you will only receive 70% of the benefits.
Claiming your benefits early while earning money in excess
No income test will apply to your benefits claim if you have reached the full retirement age. But if you choose to claim early, while continuing to make excess money beyond a specified limit, it will reduce your Social Security amount.
The Social Security Administration (SSA) sets an income limit each year for early claimants, and you will progressively lose money from your total benefits as you keep earning above the defined threshold.
Imprisonment can lead to suspension of benefits
If you convicted of a crime and sentenced to jail for over 30 days, the SSA will order a suspension of your Social Security payments.
However, the payments would likely be restored after your release from prison. It is noteworthy that even though a person in jail cannot receive these benefits, their eligible dependents and spouse can continue to receive the payments.
Returning to work
Persons with disability are generally eligible to collect SSDI benefits indefinitely.
If you decide to go back to work, your SSDI benefits will be terminated. The SSA awards SSDI benefits only to individuals who are unable to perform SGA or “substantial gainful activity.”
Improvement in condition
While you may choose not to work, your SSDI benefits could still be stopped if your condition has improved or your disability no longer prevents you from working.
The SSA periodically reviews the medical cases of beneficiaries to determine any changes in their condition.
Reaching the age of retirement
SSA will not disburse both SSDI payments and Social Security retirement benefits at the same time to the same person.
Therefore, if you have been receiving SSDI benefits, and you reach your full retirement age, your SSDI payments will automatically stop, and will be replaced with the regular Social Security checks.
Imprisonment can lead to suspension of SSDI benefits
Just like Social Security retirement benefits, SSDI payments will also get suspended if you are criminally convicted and sent to prison for over 30 days.
If your release from prison occurs after at least 12 months, the benefits will be terminated and you will have to reapply for them.
If you are a recent parolee, you will not qualify for SSDI benefits.