When you apply for Social Security Disability benefits (either Social Security Disability Insurance - SSDI, or Supplemental Security Income - SSI) the Social Security Administration (SSA) will first take a look at whether or not you worked after you became disabled. If your disability caused you to quit working entirely, then your monthly wages will be $0. Once SSA confirms that your wages are $0/month, they will continue on to the next step in determining if you qualify for disability benefits.

However, many people are able to continue working in some capacity after they become disabled. Maybe you are working part-time now or you had to take an easier job that pays less. Even though you are working, if your monthly wages are less than the “Substantial Gainful Activity” (SGA) amount, you are still eligible for disability benefits. For 2020, the SGA amount (for non-blind individuals) is $1260/month. The SGA amount usually increases a little bit every year. If you have worked after the date you became disabled, SSA will look at your wage information and determine whether you made more or less than the SGA amount. If you made more than the SGA amount, SSA will deny your application for disability benefits. If you made less than the SGA amount, SSA will continue on to the next step in determining if you qualify for disability benefits.

If you are a minister, clergy or other religious worker, the special tax issues that apply to your income can affect the wage information that the SSA uses to make their decision. When you file your taxes, the income you earned as a minister, clergy or religious worker is considered wages for income tax and retirement plan purposes; but for Social Security and Medicare tax purposes your earnings are treated like self-employment income and are covered under the Self-Employed Contributions Act (SECA). (Emphasis mine. See IRS Publication 517: Social Security and Other Information for Members of the Clergy and Religious Workers). If you file your own taxes, you know that even though you receive a W-2 with your wage information from your employer, you still have to use Schedule SE (Form 1040), which is normally only used by people who are self-employed.

When SSA pulls up your wage information from their sources, your income will appear twice: once as wages from your employer and once as “self-employment income.” This can sometimes cause SSA to double count your income. If your case is handled by an inexperienced employee who does not understand the special tax rules that apply to ministers, clergy and religious workers, they may mistakenly add the two amounts together. If that adds up to more than the SGA amount, you may erroneously be denied disability benefits.

If you are a minister, clergy or other religious worker applying for Social Security disability benefits, it is important to do what you can to ensure that SSA only counts your income once. It can be very helpful to save your tax returns and your W-2s from all years that you were working while disabled. Those documents can provide SSA with correct information so that they can make an accurate determination about your wages. That will put you one step closer to receiving the disability benefits to which you are entitled.

Written By: Carla Lopera, Esq.