Ask Larry

I am thinking of getting a job and was wondering if the business will know that I'm currently getting SSDI and doing a TWP? It looks like you have to report new jobs but it's not clear if it's for matching W2s or if Social Security reaches out to them.

Also, if you have to leave a job before your TWP is up, does Social Security check with the company to ask about your work performance/why you left?

(I have the possibility of working with a friend at his wife's company but want to keep my disability private from her.)

Thanks!

Hi. You definitely must notify Social Security if you're receiving Social Security disability (SSDI) benefits and if you start working. Social Security won't necessarily contact your employer, but in many cases they need to contact your employer in order to verify your monthly earnings. The only wage information that Social Security automatically receives from an employer are W-2 forms, and the W-2 forms only show annual earnings amounts.

Social Security may not need to contact your employer if you are able to furnish to them pay slips or other documentation that verifies your monthly earnings. But, even if you do so there is nothing to stop Social Security from contacting your employer. And, they don't need to get your authorization before contacting your employer for earnings information. So, I wouldn't count on being able to keep secret from your employer the fact that you're receiving SSDI benefits.

The only reason that Social Security would ask an employer about an employee's work performance and/or why their job ended is if they are making a determination on whether or not the work was substantial gainful activity (SGA). SGA determinations for people who are already collecting benefits aren't made until after a person's trial work period (TWP) has been completed, so if you stop work before completing your TWP I don't know of any reason why Social Security would ask your employer those types of questions.

Best, Jerry

I am receiving SSDI and have not worked since it was awarded.

I am thinking of trying a job that will be commission based because it might be flexible enough for my disability. The commission will be high-ticket so one deal will be over the amount for it to count as a TWP month. My question is, if I don't close a deal every month (only plan a few per year) will only the months that it shows up on my paystub count towards the 9 months of TWP?

I've read that sometimes bonuses will be spread out over the year and didn't know if they would try to do that if the total end of year earnings were really high.

Thanks!

Hi. If you're employed and working for wages, then your trial work months would be determined by the amount of your monthly earnings. It's true that bonuses are counted as having been earned in the month(s) for which the bonus was paid, and that's basically also true for regular wages. However, unless Social Security can readily determine the months for which wages are paid, they typically just count the wages as having been earned in the month they are paid (https://secure.ssa.gov/apps10/poms.nsf/lnx/0410505005#c).

However, if you're considered to be an independent contractor, then your trial work months would be determined using the rules governing self-employment. In 2023, for example, any month in which a self-employed person either earns more than $1,050 OR they devote more than 80 hours to their work activity could count as a trial work month.

Best, Jerry

Thank you for answering my past questions, Jerry. I just purchased your software, and am eager to use it. One more question, please. A CFP informed me that since I turn 62 in December 2023, I will receive exactly one month of the 8.7% Social Security COLA for 2023. I am unable to find anything that explains this. Can this be true?

Hi. No, that isn't true. Regardless of your month of birth, since you were born after January 1 1961 then no matter when you apply for your Social Security retirement benefits you won't receive credit for any part of the most recent 8.7% Social Security cost of living (COLA) increase. You will, however, be credited with all future COLAs, starting with the one that occurs in January 2024.

Best, Jerry

When will we know the substantial Earnings amount required for 2024? What is it?

Hi. I assume that you're referring to the substantial earnings amount used when determining the substantial earnings exception to the Windfall Elimination Provision (https://www.ssa.gov/pubs/EN-05-10045.pdf). Social Security generally announces annual changes in the first part of October. So, the substantial earnings amount in 2024 will likely be announced in the first part of October 2023.

Best, Jerry

Hi Larry. Given that (1) all Social Security COLA increases occurring after a person turns 62 are added to their Social Security retirement benefit rate, and (2) the indexes used on social security earnings becomes a constant 1.0 at age 60, then is it correct to conclude that someone who becomes 62 in say December of 2023 unfortunately missed out on two of the best consecutive adjustments in recent history (namely the 5.9% COLA of 2022 and the 8.7% COLA of 2023 (a combined 15% increase)? Is this just an unfortunate fact of timing that, or am I missing something?

Hi. It's certainly true that Social Security retirement benefit rates for people born after January 1 1961 won't include the the recent 5.9% & 8.7% cost of living (COLA) increases, but on the other hand their earnings will be indexed at a higher rate than people born prior to January 2 1961. Those higher indexed earnings amounts will certainly offset at least some of the COLA increases that they missed out on for years prior to the year they reached age 62.

For example, people born in 1961 will receive credit for 1.0889195 times the amount that they actually earned in the year 2020 when their Social Security retirement benefit rate is calculated, whereas people born in 1960 or earlier will only receive credit for their actual 2020 earnings. The following chart shows the yearly indexing factors used to calculate Social Security retirement benefit rates for each year of birth. Note, for instance, that the indexing rates are higher for all years before 2021 for people turning 62 in 2023 than they are for people who turned age 62 in 2022. https://www.ssa.gov/cgi-bin/awiFactors.cgi. Thus, even though people turning 62 in 2022 did receive the recent 8.7% COLA increase, their starting benefit rate was calculated using lower indexing factors than those used for people born in 2023.

Best, Jerry

My husband and I have been caring for our nieces since their parents passed away 2 years ago. They have been receiving Social Security benefits. We opened up a saving account for each of them so that their checks could be deposited. My niece just turned 18 and social security has asked for any saved funds to be sent to them. Since this account is in her name do we need to return the funds.

Hi. Maybe not. Returning the conserved funds to Social Security would just require them to reissue them to your niece, so if the bank account in which the funds are currently held is properly titled in your niece's name then Social Security will probably authorize you to leave the funds where they are. Regardless, though, if you've been asked by Social Security to return conserved funds then you'll need to call or visit them in order to discuss your options.

Best, Jerry

For many recent COLA questions to Ask Larry, the replies from Jerry included the following statement: "Everyone born prior to January 2 1961 will have the upcoming 8.7% cost of living (COLA) increase added to their Social Security retirement benefit rate regardless of whether or not they are drawing benefits." However, please comment on the following excerpt from Mary Beth Franklin's recent article "No need to claim Social Security to cash in on COLA": "There is no need for clients to claim Social Security benefits now to cash in on the huge 8.7% cost-of-living adjustment for 2023. Every year that you are eligible for Social Security, beginning at age 62 and up to the time you claim benefits, each COLA is automatically applied to your future benefit, even if you haven't yet filed for Social Security. That's in addition to the delayed retirement credits of 8% per year up to age 70."

Hi. Both statements are accurate, and they both say essentially the same thing. Specifically, that you don't need to be collecting benefits in order for your Social Security retirement benefit rate to be credited with all of the Social Security cost of living (COLA) increases that occur after you turn age 62.

Best, Jerry

Hi, I turned 65 last year and I signed up for Medicare on March 2022, because I had only 36 credit points then, I had to pay part A and B out of pocket . This year, I reached 40 points after paying taxes, which means I should be entitled to free part A, but I already paid part A bill from Jan to April, can I get a refund? Thanks.

Hi. Yes, you should qualify for premium free Part A of Medicare effective with the first month that you had 40 (QC) quarters of Social Security coverage. Any out of pocket Part A premiums that you paid for months that you were eligible for premium free coverage should be refunded to you. However, you'll likely need to be very patient and work with Social Security in order to actually get the refund. I would start out by calling them to explain the situation so that they can begin working on getting you a refund from Medicare.

Best, Jerry

Hi Larry, I have been receiving restricted spousal benefits for a few years now as I was born in 1953. I will be 70 in July and will switch to my own retirement benefits. Do I have to do anything besides fill out a new online application? Do I need to go in person to a Social Security office? Or will I be switched over automatically without having to reapply? So confusing. Thanks for any clarity you can provide.

Hi. You won't automatically be switched to your own benefits. Instead, you'll need to file an application for Social Security retirement benefits on your own account. I'm not sure whether or not Social Security's website will allow you to apply for your own benefits online, but if not you'll need to call Social Security to make an appointment to apply by phone or in person.

Best, Jerry

I have been receiving ssdi for a mental health disability since 2018 I have also been receiving additional benefits for my minor son who is himself disabled with a diagnosis since age 13 and has continued treatment and diagnosis not to improve he himself is going to be 18 in 8 months how and when do I apply for him to receive the same max dollar amount under my record as an adult disabled child?

Hi. Social Security won't accept applications to convert child benefits to childhood disability benefits (CDB) until a child is at least 17 1/2 years of age (https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203080). So, you'll want to contact Social Security about filing for CDB benefits for your son once he is within 6 months of turning age 18. You won't be able to apply online, so you'll either need to visit your nearest Social Security office or call to make an appointment.

Best, Jerry