A common concern among soon to be retirees is that their Social Security Disability payments will be reduced once they begin collecting pensions from former employers. Fortunately, for most people this isn’t the case. As long as an individual has paid into the Social Security system, these benefits are protected.
Qualifying for Social Security Disability
It is important to remember that Social Security disability is not based on financial need; it’s based upon an individual’s income and their inability to continue working. To qualify, an individual must be afflicted by a listed condition or its equivalent. Listed conditions include musculoskeletal problems, respiratory illnesses, mental disorders, immune system disorders, cancer, sense/speech issues, etc. If an individual has any of these conditions, they qualify for their full Social Security disability payment regardless of other sources of retirement income.
Impact of Pensions on Social Security Disability Payments
Individuals can receive their full pension from an employer, either in monthly installments or as a lump sum payment. This will have no impact on their Social Security disability payments. The exception to this is if Social Security wasn’t deducted from the individual’s income while they were working. If this was the case, then Social Security may elect to offset the difference by reducing the Social Security disability payment. This is not something most individuals who worked in the private sector or for the government should be overly concerned with. One notable exception is for former government employees who were Federal Civil Service employees. These individuals need to carefully review the Windfall Elimination Provision to determine its impact.
Reductions to Pensions
Individuals concerned about reductions in their Social Security disability payments often overlook reductions to their pensions. It’s not uncommon for employers and long-term disability companies to reduce payments after an individual begins collecting Social Security disability payments. For this reason, it is important to contact these entities prior to collecting their benefits. Doing so can prevent a surprise in an individual’s budget once SSDI payments begin arriving.
When to File
An individual should not delay filing their Social Security disability claim. The sooner the process begins, the sooner a determination can be made. For most individuals, pension income isn’t affected by Social Security disability payments. Individuals seeking to file should contact a social security disability lawyer for help reviewing their current pension details. The lawyer may also provide help in filing their Social Security disability claim. This can help maximize an individual’s benefits and monthly income in the future.