Social Security Disability 5-Year Rule: What It Is & Why It Matters

What is the Social Security Disability 5-Year Rule? Discover its impact on eligibility for SSDI benefits, the advantages, exceptions, and work credits.

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If you or a loved one have experienced disability and have participated in a Social Security Disability program, subsequently receiving payments, and now have intentions to reenter the workforce in the United States, it’s crucial to understand the significance of the Social Security Disability 5-Year Rule. In this article, we will delve into the details of this rule, shedding light on its purpose and determining its relevance to your specific circumstances. Discover how the 5-year rule can impact your eligibility and navigate the complexities of the Social Security Disability system.

What is the Social Security Disability 5-Year Rule?

The Social Security disability five-year rule, as established by the Social Security Administration (SSA), provides individuals with the opportunity to bypass the mandatory waiting period for receiving disability benefits. This rule applies to those who had previously received disability benefits, either through Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), ceased collecting those benefits, and subsequently experienced a physical or mental disability that rendered them unable to work again within a five-year timeframe.

How Does the Social Security 5-Year Rule Work

If, at any time, within five years of your benefits being stopped, your income again falls beneath the level the SSA sets as “substantial gainful activity,” which is a different threshold for each year, you can resume your monthly SSD benefits without needing to reapply and go through the initial application process again. Your benefits will be reinstated as soon as you contact the Social Security Administration and inform them of your inability to continue working, whether at this current job that you just had to re-quit or any other in the national economy.

Benefits of Meeting the Social Security 5-Year Rule

One significant advantage of fulfilling the Social Security five-year rule is that there is no need to reapply for benefits if you make an attempt to work, whether in your previous job or a different occupation, but find yourself unable to continue due to your physical or mental disability. The intention of the Social Security Administration is to promote and support the reentry into the workforce for individuals with disabilities, without the concern of having to go through the process of reapplying for benefits if the work arrangement does not prove feasible.

If you have questions about reinstating your disability benefits, give the Social Security Disability Attorneys at Evans Disability a call at at (855) 503-0101 for a free consultation in order to start the process of reinstating your benefits.

Also Read: Five Types of Disability. Knowing the claim type is key to understanding your SSA Award Letter. 

Exceptions to the Social Security 5-Year Rule

  • This 60-month exemption applies to individuals who either file for Social Security spouse’s benefits on or after April 1, 2004 or retire after June 30, 2004
  • If any of the last 60 months are during the transitional period, verify with the pension-paying agency that the Social Security-covered employment was within the current pension plan, worked prior to March 2, 2004, and that at least one month was worked after March 2, 2004.
  • The Social Security Administration provides an exemption that
  • If the posted amount of Social Security-covered earnings is less than the annual amount based on the Federal minimum wage amount but can be explained, accept the individual’s statement as to the number of months of covered employment. For example, if the amount posted is only one-third of the annual amount determined using the Federal minimum wage amount, but the individual explains that he worked only 2-3 hours a day as a school bus driver for 9 months, accept his explanation and give him credit for 9 months of Social Security covered employment that year.

What Are Work Credits for Social Security?

Under the Social Security Disability Insurance Program, employees earn credits for the income that they earn every year via their job. For every year, employees can earn up to a max of four credits. The amount that you must earn to get one credit changes annually and goes up slightly as the average earnings level increases. As of 2023, you receive 1 credit for each $1,640 of earnings. The credits you once earned remain on your earnings record, even if there is a job change or you stop making for a while. The specific amount of credits needed to qualify for different disability programs is dependent on the age of the worker applying for disability benefits. For those nearing retirement age, the threshold for the amount of qualifying work credits will be much lower than if it was someone in their 20s or 30s who has become disabled and as a result, unable to work either their previous jobs or another job in the national economy.

How to Earn Work Credits for Social Security?

According to the Social Security Administration, work credits credits are the “building blocks” Social Security uses to find out whether you have worked long enough to qualify for each type of Social Security benefit. If you stop working before you have enough credits to qualify for benefits, your credits will stay on your record. If you return to work later on, you can add more credits so you can
Qualify. Credits are based on your income during the year, no matter when you did the actual work.
You might work all year to earn four credits, or, if you’re lucky, you might earn enough for all
four in your summer job. When you work and pay Social Security taxes, you earn up to a maximum of four “credits” for each year.

If you were born in 1929 or later, you need 40 credits (10 years of work). The number of work credits needed for disability benefits depends on your age when you become disabled. In general, you need 40 credits, with 20 earned in the last 10 years ending with the year you become disabled. However, younger workers can qualify with fewer credits. Before age 24 – you may qualify if you have six credits earned in the three-year period ending when your disability starts.

Also Read: Can You Work While on Disability? (Top Things to Know) Here is everything you need to know about working while on Social Security and how it affects your benefits.

Applying for SSDI Benefits? Here’s Why You Need an Attorney

The social security disability attorneys at Evans Disability have years of combined experience obtaining Social Security benefits for their clients and would love to assist you with your disability issue. Call them at (855) 503-0101 for a free consultation.