How Do Pensions Affect Social Security Disability?

SSDI Eligibility Requirements

The primary qualifications to be eligible to receive SSDI benefits revolve around strictly defined medical qualifications. Workers can be of any age and receive benefits if they qualify otherwise; and, unlike Supplemental Security Income benefits – which the Social Security Administration pays to disabled beneficiaries who demonstrate financial need – there are no income restrictions to qualify. Beneficiaries must be certified with a qualifying, long-term total disability by a doctor and must have worked half the quarters in the prior 10 years, a term that’s reduced for workers under age 31, to receive benefits.

Non-taxed Pensions

The only workers who receive a pension that may see an adjustment of their disability benefits are those who receive a pension on wages that weren’t subject to Social Security taxes. Although most workers’ pensions don’t meet this standard, pensions for railroad workers, government employees and other public employees with retirement programs independent of the Social Security system may reduce a disability benefit amount. This type of benefit must be reported to the Social Security Administration, which will weigh its impact on a recipient’s benefits.

Social Security Retirement Pensions

SSDI benefits are meant to replace a portion of earnings that a worker loses when he can’t return to work for a long period of time; the benefit isn't a "no-strings" entitlement program for disabled workers. When a worker reaches retirement age, the Social Security Administration assumes he would have retired, and thus stopped receiving the wages SSDI helps replace. Because of this, workers who receive SSDI payments lose their disability benefits when they reach full retirement age, and the administration instead provides them with a retirement pension. Retirement pensions and benefits are roughly of the same amount.

Supplemental Security Income

Many SSDI recipients also qualify for Supplemental Security Income, or SSI. These payments are made in addition to SSDI benefits; and to qualify, a recipient must possess limited financial holdings – $2,000 for individuals, $3,000 for a married couple – and receive a limited amount of monthly income. SSI recipients who receive a pension may not be outright disqualified from receiving SSI benefits, although their benefits may be reduced due to an increase in income.