How does your pension affect your SSD payments?
If you are a worker who suffers from a disability that leaves you unable to work, you can receive disability payments from the Social Security Administration. These payments are calculated by agency's review of your work history, but they may be reduced if you have other types of income. Some pension payments will lessen the amount of the SSD benefit check you receive.
Receiving Pensions While Receiving SSD
For most individuals receiving SSD benefits, pensions will not t alter the SSD payments they receive. As long as you had to pay Social Security withholding taxes on the earnings that now qualify you for a pension, your benefits will not be impacted by your receipt of pension payments.
There are, however, some government employers, particularly those from state and local government agencies, that don't have to withhold Social Security taxes from employees' wages. In such cases, something called the Windfall Elimination Provision can effectively reduce your SSD payments. Figuring out what your reduction in payments will be can be complicated since it is determined by how many years you have worked in jobs in which you were not subject to Social Security taxes. If you have worked for 30 or more years in jobs in which you did have Social Security tax withheld, your SSD benefit checks won't be reduced at all.
Effects on Spousal Benefits
Similar rules apply if you are not disabled, but your spouse is. In cases where you qualify for spousal benefits under SSD, while those benefits aren't subject to the Windfall Elimination Provision, they may be subjected to the Government Pension Offset regulation. This will occur if you are receiving a pension from a job in which you didn't pay Social Security withholding tax.
The calculations for the Government Pension Offset are simpler that the Windfall Elimination Provision. Typically, your Social Security spousal or survivor benefits will be reduced by two-thirds of your pension. In some cases, that may prevent you from receiving a Social Security check at all, because there is no maximum amount for the reduction.
If you are among the great majority of people collecting Social Security Disability payments, your SSD benefits will not be impacted by any pension you collect. It is only if you have spent at least part of your earning years working at jobs in which you paid no withholding tax into the Social Security system that you will have to be concerned about your pension checks reducing your disability income.
Because of the complexities of the Social Security Disability system, you should take the time to consult with a highly qualified Social Security Disability attorney who will be able to guide you through the process of procuring and maintaining the benefits to which you are entitled.