Understanding the Earnings Cliff: What Employers and Employees Need to Know

A Message from Penny Forward Founder and CEO, Chris Peterson

Earlier this week, Penny Forward Benefits Counselor Jenny Holcomb and I talked to members of VisionServe Alliance about Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and ways to keep benefits while working. It was a great discussion, and I want to share some key points with you because I believe we all have more power than we sometimes think—even when things seem unfair.

First, let’s talk about something called the “earnings cliff.” Imagine a person named Sarah. She gets $1,800 every month from SSDI. She also works, earning another $2,700 a month. Together, that’s $4,500 a month. Sounds pretty good, right? But here’s the tricky part: if Sarah gets even a tiny raise of just $1 more, her monthly earnings become $2,701, and she completely loses her SSDI check. That means instead of making $4,500 total, she’s suddenly down to just $2,701. This sudden drop is what we call the earnings cliff, and it can feel really scary.

But don’t panic. There are ways to avoid this cliff, and that’s what we talked about. For example, you can lower the income that Social Security counts by reporting expenses related to your disability—like guide dog costs, special software like JAWS, or other tools and accommodations needed to work. Another helpful strategy is income averaging, especially during months when you get extra paychecks. This spreads out your income, making it less likely you’ll accidentally go over limits.

Here are some important terms to keep in mind:

• Trial Work Period (TWP): This lets you test working without risking your SSDI. You can earn up to $1,160 each month for nine months within a five-year span.
• Substantial Gainful Activity (SGA): For people who are legally blind, this limit is $2,700 per month. Staying below it means your SSDI continues safely.
• Grace Period: After your Trial Work Period ends, you get one month, plus two more months, where you can earn over the SGA without losing your SSDI right away.
• Extended Period of Eligibility (EPE): This gives you 36 months after your Trial Work Period to keep receiving SSDI in any month your earnings dip below the SGA limit.
• Expedited Reinstatement: After the Extended Period of Eligibility ends, there is another five-year period called expedited reinstatement. During these five years, if your earnings drop below the SGA limit again, you can quickly restart your SSDI benefits by simply calling the Social Security Administration and requesting reinstatement. This means you could have up to eight years total (the 36-month EPE plus five years of expedited reinstatement) to resume receiving benefits after starting work.

We also talked about SSI. This is a bit different because it’s based on financial need. Right now, SSI provides up to $967 per month, and unlike SSDI, it looks at all your income—not just your paycheck. If you’re receiving both SSDI and SSI, carefully managing your earnings becomes even more important.

Knowing how to talk with the Social Security Administration (SSA) can make a huge difference. Here are some practical tips:

• See if you can take care of your business online at the SSA’s website, ssa.gov. This is also a good place to research any questions you might have.
• Call SSA at 1 (800) 772-1213. Wait times can be long, but people often have better luck if they call right at 8:00 AM Eastern and wait patiently.
• Call your local SSA office. Sometimes they’re quicker to answer.
• Visit your local SSA office in person. Usually, you don’t even need an appointment, and visiting early in the morning or later in the week can mean shorter wait times.
• Send certified mail if you need to send documents. Regular mail or faxes can get lost easily, but certified mail provides proof that your documents arrived.
• Reach out to your members of Congress if you’re not getting anywhere. They have staff who can help speed things up.

Dealing with SSA can feel overwhelming and frustrating. But you aren’t helpless. If something isn’t right, don’t just accept it. You have the power to advocate for yourself. Clear communication, persistence, and knowing your rights can truly change outcomes.

That’s exactly why Penny Forward is here—and why we have someone like Jenny Holcomb on our team. Jenny is a certified work incentive expert and a former attorney. She helps people understand and navigate these confusing systems. She knows exactly how to talk to SSA, understands the rules thoroughly, and knows who to call if special help is needed.

You can take control of your financial future. You can challenge unfair decisions made by SSA. If you’re looking for work or want to grow your career without losing your benefits, remember—you absolutely have the power to do it.

At Penny Forward, we’re here to help you find and use that power. Yes, life and the system can feel tough and unfair, but you’re not alone. Together, with the right knowledge and support, we’ve got this. Let’s keep working together and supporting each other, because your financial future is worth fighting for.

Regards,

Chris Peterson, AFC®
Founder and CEO, Penny Forward