Social Security Disability Insurance (SSDI) helps many Americans with disabilities which render them unable to work. The program provides income to these individuals so that they can live fulfilling lives. Frequently, people on SSDI have chronic medical issues that need treatment. Accordingly, will need medical care frequently and may be concerned about whether they need to pay Medicare premiums from their social security disability insurance income.
The answer is that individuals on SSDI will rarely, if ever, need to pay taxes for Medicare. This is because Medicare taxes come out of income, and SSDI payments are technically not “income.” However, in some cases, people on SSDI may have to pay minor taxes on side income, but not on anything they get from SSDI.
For help and information to guide you through your situation, call our Arkansas SSDI lawyers at (479) 316-0438.
Do I Need to Pay Medicare Premiums while on SSDI in Arkansas?
You do not need to pay Medicare premiums for Social Security Disability Insurance. Taxes that pay for Medicare come out of your income, and SSDI is decidedly not income. The program’s purpose for existing is so that individuals who are not able to earn livable income because of disabilities are able to live fulfilling lives. Because SSDI is not income, there are no Medicare premiums on it.
That being said, people on SSDI may have to pay Medicare premiums on other revenue streams. For example, many people on SSDI have a passive income stream that is at a permissible level to still be eligible for Social Security Disability Insurance. Passive income like rents and investment income are usually separate from the level of what Social Security Disability Insurance refers to as “substantial gainful activity” (SGA) from active work. The threshold for SGA increases each year and is available on the SSDI website. For 2023, the threshold for substantial gainful activity is $1,470 a month for people who are not blind and $2460 for people who are blind. In 2024, those thresholds will increase to $1,550 a month for nonblind people and $2,590 a month for blind people. People on SSDI will still have to pay Medicare premiums on that limited income they get from active work.
Explaining Medicare and How it Relates to SSDI
Medicare is a federal health insurance program that helps American citizens who are 65 and older. Most people are familiar with the services Medicare provides older Americans. However, many people do not know that Medicare also helps people with disabilities – like people on SSDI. Medicare has two parts: Part A and Part B. Part A covers hospital insurance, while Part B covers other medical expenses such as outpatient care or mental health care.
Will I Lose Medicare if I Lose Social Security Disability Insurance in Arkansas?
Social Security Disability Insurance, as the name would suggest, helps out Americans who are disabled and cannot work to the level of substantial gainful activity without losing their benefits. The inverse of this is that if you become no longer disabled and are able to work to a greater degree again, you will eventually lose your SSDI benefits. At this point, people may be worried that they will lose their Medicare benefits as well. This can be distressing because individuals in this kind of situation may have relied on Medicare for a long time, and now they are facing the potential prospect of their insurance being pulled out from under them.
The good news is that not everything is suddenly taken away. If you are on SSDI and wish to try to work again, you can safely return to work without necessarily jeopardizing your Medicare benefits. However, since you will be receiving income on SSDI payments, you will likely need to pay Medicare taxes and premiums on that income.
Returning to work may require going through a trial work period to see if you can support yourself. If, after that period, it is still felt that you need SSDI, you can keep it and other benefits.
Trial Work Period
If you find that you are able to work again while receiving SSDI benefits, you enter what is called a trial work period. During this period, you are still considered disabled – and therefore can still get SSDI benefits – even though you are working. If you are able to work for nine months – which do not have to be consecutive – during this period, you are no longer considered disabled and are no longer eligible for SSDI.
There is an income threshold that your work has to reach in order to be considered not disabled, which increases each year. In 2023, any month where you earn $1050 or more from services rendered is considered a month where you worked for the purposes of a trial work period. In 2024, that amount will increase to $1,110 in one month for services rendered.
Extended Period of Eligibility
There are ways that you can still keep Medicare benefits, even if you start working again. SSDI will end for individuals whose income meets or exceeds what is considered “substantial gainful activity.” Substantial gainful activity is $2,590 for blind individuals and $1,550 for nonblind individuals.
If you are able to maintain this level of income throughout the trial work period, your Social Security Disability Insurance benefits may stop. However, your Medicare benefits may continue for some time. Namely, you will not have to pay for Part A of Medicare if you are working but still disabled. However, you will be responsible for Part B of Medicare. This would certainly be a change in circumstances for many people, so it may be a good idea to go over your situation with our lawyers if you have any questions or concerns.
Talk to Our Arkansas SSDI Lawyers Now
Do not hesitate to call (479) 316-0438 and speak with our Fayetteville, AR SSDI lawyers about your situation.