- About Social Security Income Limits
- Social Security Disability & Retirement
- Do Dividend Payments Affect Social Security Payments?
- Does the Inheritance of an Annuity Affect Social Security Payments?
- Does IRA Distribution Count as Income to Social Security?
- Can an Ex-Wife Claim My Social Security Benefit?
If you become disabled to the point that you can't work, you're entitled to Social Security benefits. Disability benefits are based on the earnings that you received when you were working. However, if you receive a government pension based upon income on which you did not pay Social Security taxes, you might receive less in benefits than you would otherwise.
If you receive a state or local government pension, it offsets your Social Security benefits if you are a widow or widower. Your Social Security benefits are offset by two-thirds. For example, if you are supposed to get a benefit of $1,000, the benefit would be reduced by two-thirds and you would get a benefit of $434.33. This offset only occurs if you are receiving a widow or widower's pension, however; your disability pension won't be affected.
If you worked for a foreign employer before you got on disability, or otherwise didn't pay into the Social Security system, the pension from that employment may offset your Social Security disability payments. The Windfall Elimination Provision requires the Social Security Administration to give you a lower percentage of your total earnings each month than it ordinarily would unless you have worked for over 30 years in a different job prior to the time you start collecting disability.
If you qualify for the Windfall Elimination Provision, the Social Security Administration calculates different parts of your disability benefits differently. The first $761 of your earnings that your disability benefits are based on is multiplied by 90 percent, the next $3,824 is multiplied by 32 percent and any remaining earnings are multiplied by 15 percent. The Social Security Administration then adds these three totals together to determine your total earnings for benefit purposes.
Pensions only affect your disability payments if you did not pay taxes on the job where you earned the pension. If you paid Social Security taxes on your income from the job, the pension won't offset your disability benefits. However, if your disability benefits are based on someone else's earnings, any pension you get will offset those benefits.