Are There Limits to What You Can Spend SSDI Benefits On? (2024)

FAQs

Are There Limits to What You Can Spend SSDI Benefits On? ›

Legally speaking, you can spend your SSDI money on whatever you want. Social Security Disability Insurance benefits are paid from payroll tax funds and the amount you earn in benefits is based on what you paid through your individual payroll taxes. It's not a 1-to-1 correlation like it would be with say a 401k.

An individual can spend their SSI monthly benefit in any way they see fit. But remember to spend this money wisely. It's best to spend your SSI monthly benefit on basic necessities and paying off bills. If there is money left over, you may spend your monthly benefit on any other entertainment or activity of leisure.

For example, if you receive SSDI, wages, or other income, you could set aside some of that money to pay expenses for education, vocational training, assistive technology used for employment–related purposes, or starting a business. Expenses must be related to achieving your work goal.

SSDI Income Limits

A person who makes more than a certain amount per month is said to be engaging in substantial gainful activity and is ineligible for SSDI. As of 2023, the amount for significant gainful activity is $1,470 for most applicants and $2,460 for those who are blind.

The Truth About Savings Accounts and SSDI. Individuals in the Social Security Disability Insurance (SSDI) program receive long-term income because they are unable to work; the program does not place any limits on savings account amounts or other financial assets generally.

Does the Government Monitor SSDI Spending. Legally speaking, you can spend your SSDI money on whatever you want. Social Security Disability Insurance benefits are paid from payroll tax funds and the amount you earn in benefits is based on what you paid through your individual payroll taxes.

DWP are not interested in what you spend your benefits money on, that's entirely up to you. The only time they may question it is if you had or have savings of more than the allowed amount before means tested benefits are affected.

Qualified disability expenses

These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services.

SSDI payments are not affected by having a house, a car, money in the bank, or owning other possessions. On the other hand, many SSI clients are surprised to learn that assets do affect their benefits.

It requires that you must have worked five out of the last ten years immediately before your disability onset to qualify for Social Security Disability Insurance (SSDI).

What is the downside to being on disability? ›

One of the cons of being on disability is the potential impact on your future work opportunities. While SSDI allows for a trial work period and offers work incentives to help you transition back to employment, many beneficiaries find it difficult to return to the workforce after an extended period of benefits.

Asset Rules for SSI Disability

Instead, SSDI is a benefit that workers pay for, and qualify for, through tax contributions paid into the Social Security system.) To be eligible for SSI, an individual has to have low income (generally under $900 to $1,700 per month) and low assets (less than $2,000).

Social Security Disability Insurance (SSDI) – The maximum payment is $3,822 a month (up from $3,627 in 2023). The maximum family benefit for SSDI is about 85% to 150% of the disabled worker's benefit. The maximum payment at full retirement age is $3,822 monthly.

If you are currently receiving Social Security Income (SSI), the SSA actually can check your bank account, as they have the permission to do so. SSI is a needs-based program for those that don't qualify for full social security disability benefits due to lack of work history, age, or other factors.

Financial assistance can disqualify you for SSI benefits, but not SSDI benefits. Generally, cash gifts reduce your SSI eligibility dollar for dollar. Before you accept a financial gift, contact the disability lawyers at Berger and Green.

Receiving SSI and SSDI while working

But the benefit amount you receive may be reduced depending on how much money you earn from your job. As of 2024, you may stop receiving SSDI benefits if you earn over $1,550 a month. But your eligibility to receive SSI while working will depend on which state you live in.

As a representative payee, you're responsible for keeping records and reporting on how you spend the benefits by completing a Representative Payee Report (Form SSA-623, SSA-6230, or SSA-6233). We'll mail the proper form to you once a year. You can also file the report online at www.ssa.gov/myaccount/rep-payee.html.

ABLE Accounts

The account's earnings are allowed to accumulate tax-free, and the withdrawals, provided they are applied to qualifying disability expenses, are tax-free. For individuals receiving SSI benefits and/or State or local means-tested benefits, their ABLE accounts must not exceed $100,000.

Does the SSA Watch Bank Accounts for SSDI? In the case of Social Security Disability Insurance (SSDI), the SSA does not physically check bank accounts for asset limits. However, you may lose benefits if you have an increase in income or assets that is discovered during a review process.