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Countable Earnings vs Subsidies

Social Security Disability Lawyers: Riverside, North San Diego & Orange Counties

Countable Earnings and Subsidies

If you are working part-time and making less than $1,220 a month, which in 2019 is the most you are allowed to make (“Substantial Gainful Activity” or “SGA”) and still be eligible for Social Security Disability (SSDI) benefits, and you receive other benefits that are provided by your employer, such as room and board, the Social Security Administration (SSA) may consider these other benefits as “payments in kind,” meaning that your SGA may be considered >$1,220, after taking those “other benefits” into consideration.

Social Security Ruling SSR 83-33 provides that “gross earnings include payments in kind (e.g., room and board) which are made for the performance of work in lieu of cash.”

This is where a “subsidy” may help.

Under POMS DI 10505.010 – Determining Countable Earnings, “an employer may subsidize the earnings of an employee with a serious medical impairment by paying more in wages (or payments in kind in lieu of cash) than the reasonable value of the actual services performed. When this occurs, the excess will be regarded as a subsidy rather than earnings.”

Therefore, any “subsidized earnings” provided by an employer may be deducted from gross earnings to constitute “countable earnings.”

Circumstances that indicate a strong possibility that an employer is providing a “subsidy” to an employee include:

  • When there is a marked discrepancy between the amount of pay and the value of the services.
  • When an employee receives unusual help from others in doing the work (e.g., from a friend, employer, of family member).
  • When the nature and severity of the impairment indicates that the employee receives unusual help from others in doing the work.

If an employer is providing a subsidy to an employee in the form of “extra” compensation or “room and board,” it is helpful to have the employer calculate or at least explain how the subsidy was arrived at.

Therefore, if you are a disabled person who is working part-time and receiving >$1,220 a month in salary, or you are receiving <$1,220 in salary, but the value of other benefits (such as room and board) may increase your monthly compensation to >$1,220, remember that a “subsidy” may reduce your gross compensation to less than SGA and preserve your right to SSDI benefits.

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