Say Goodbye to Social Security Benefits – Three Ways You Might Lose Your Check in 2024

Many people anticipate receiving Social Security benefits upon reaching retirement age or due to eligibility factors like disability. However, various circumstances can lead to a reduction or even a complete loss of these benefits. Knowing the factors that could affect your Social Security benefits is crucial to avoid unexpected disruptions.

Types

The Social Security Administration (SSA) provides several types of benefits, including:

• Retirement Benefits: For individuals who have worked and paid Social Security taxes.
• Social Security Disability Insurance (SSDI): For those who have a disability that prevents them from working.
• Supplemental Security Income (SSI): For people with limited income and resources, including the elderly or disabled.

While these benefits are designed to provide financial support, certain actions or changes in your circumstances can affect your eligibility or the amount you receive.

Ways to Lose Benefits

One of the most common ways to lose Social Security benefits is by exceeding the earnings limits set by the SSA. If you are receiving benefits while still working, your earnings can impact the amount you receive.

For SSI recipients, the monthly income limit is $1,971 for individuals (with a higher limit for couples). Earning more than this can reduce your benefits, with $1 deducted from your SSI payment for every $2 earned over the limit. This reduction applies to all forms of employment, and it’s essential to report any income changes to the SSA promptly to avoid overpayment issues.

For SSDI beneficiaries, there is more flexibility. SSDI recipients can work during a “trial work period” of up to nine months, earning more than the usual limit without losing benefits. In 2024, earning more than $1,110 in any month will count toward this period. During this trial period, there is no cap on your earnings, so you can continue receiving SSDI benefits regardless of your income.

After the trial work period, you enter a 36-month “extended period of eligibility” (EPE). During the EPE, if your earnings exceed the set limit ($1,550 per month in 2024, or $2,590 for those who are blind), your SSDI benefits for that month will be suspended. If your earnings consistently exceed this limit after the EPE ends, your SSDI benefits may stop entirely. However, if you are unable to maintain employment, your benefits may be reinstated.

Resource Limits

SSI eligibility also depends on your resources, which the SSA defines as anything you own that can be converted to cash for food or shelter. This includes cash, bank accounts, stocks, bonds, and personal property. To qualify for SSI, your resources must not exceed $2,000 for an individual or $3,000 for a couple. If your resources exceed these limits, you may lose your benefits until your resources fall below the threshold again.

According to the Center on Budget and Policy Priorities, about 70,000 people lose their SSI benefits each year because their resources exceed the limit. Although there have been discussions about raising these limits to $10,000 for individuals and $20,000 for couples, no changes have been implemented yet.

Divorce

Divorce can impact your Social Security benefits, especially if you were receiving benefits based on your ex-spouse’s earnings record. To qualify for these benefits, you must have been married for at least 10 years, and you cannot be remarried.

If you remarry, you may lose access to your ex-spouse’s benefits. However, if your second marriage ends, you might regain eligibility. Additionally, if your own earnings qualify you for a higher benefit than your ex-spouse’s, you will receive the higher amount.

Incarceration

Incarceration is another major factor that can lead to the suspension or termination of your Social Security benefits. If you are incarcerated for more than 30 days, your Social Security and SSI benefits will be suspended. SSDI benefits can be reinstated the month after your release.

For SSI recipients, benefits are suspended while you are in jail and are not reinstated until you are released. If you are incarcerated for more than 12 months, your SSI benefits will be terminated, and you will need to reapply after your release.

Knowing the various factors that can affect your Social Security benefits is crucial to maintaining financial stability. Whether it’s exceeding earnings limits, accumulating too many resources, or changes in personal circumstances like divorce or incarceration, being aware of these potential pitfalls can help you avoid unexpected disruptions to your benefits. Staying informed and proactive is key to ensuring you receive the support you need.

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