Is It Illegal to Work While on Disability Benefits?

Working while receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits can lead to serious legal consequences if you fail to notify the Social Security Administration of your work activities. The Social Security Administration takes fraud investigations seriously, and violations can result in hefty fines, benefit overpayments, and yes, even jail time in severe cases.

Understanding the rules around working while on disability protects you from unintentional violations that could jeopardize your benefits and your freedom. The Keener Law Firm has represented numerous clients who faced investigations for work activity while receiving benefits, and we know how quickly these situations can escalate from administrative issues to criminal matters.

What Constitutes Disability Fraud When Working?

Disability fraud occurs when you intentionally provide false information to the Social Security Administration about your work activity or earnings while receiving benefits. The key word here is “intentional.” The SSA must prove you knowingly violated program rules with the intent to deceive.

Common examples of fraudulent work activity include hiding employment from the SSA, underreporting your wages, working under someone else’s name or Social Security number, or claiming you cannot work while performing substantial gainful activity. Even working for cash without reporting it to the government can trigger fraud charges.

The SSA defines substantial gainful activity as earning more than specific monthly amounts. For 2025, this threshold is $1,620 per month for non-blind individuals and $2,700 for blind individuals. Working above these amounts while claiming total disability raises immediate red flags.

How Does the Social Security Administration Detect Unreported Work?

The SSA uses sophisticated computer matching systems to cross-reference your reported earnings with information from other government agencies. They regularly compare their disability rolls against wage reports from employers, tax returns filed with the IRS, and unemployment compensation records.

The agency also receives tips from neighbors, former employers, coworkers, and even family members who report suspected fraud. Social media posts showing work activities, surveillance footage, and background investigations can all provide evidence of unreported employment.

When the SSA identifies potential work activity, they launch what’s called a Continuing Disability Review or a work-related investigation. During these reviews, the SSA examines your medical condition and any work activity you performed to determine if you still qualify for disability benefits.

What Are the Criminal Penalties for Disability Fraud?

Federal law treats Social Security fraud as a serious crime. Under Section 208 of the Social Security Act, making false statements or representations to obtain or maintain benefits is a felony punishable by up to five years in prison, fines up to $250,000, or both.

The penalties increase significantly for organized fraud schemes or cases involving large amounts of overpaid benefits. Some individuals have received sentences of ten years or more for complex disability fraud operations.

Beyond criminal penalties, you’ll face civil consequences including full repayment of overpaid benefits with interest, permanent disqualification from receiving future benefits, and civil monetary penalties of up to $10,000 per false statement.

When Can You Work Legally While on Disability?

The SSA allows certain types of work activity while still keeping your benefits through specific programs designed to encourage benefits recipients to attempt to return to work. Understanding these programs prevents unintentional violations.

The Trial Work Period (TWP)allows SSDI beneficiaries to test their ability to work for nine months (not necessarily consecutively) without losing benefits. During 2025, any month you earn more than $1,160 counts as a trial work month. After completing your trial work period, you enter an Extended Period of Eligibility (EPE) lasting 36 months.

For SSI recipients, the Ticket to Work program and various work incentives allow you to work while maintaining some benefits. SSI has more restrictive earnings rules, but programs like the Student Earned Income Exclusion and Plans to Achieve Self-Support can help preserve benefits.

The key is reporting all work activity and earnings to the SSA immediately, regardless of the amount. Even if your work falls below substantial gainful activity levels, failing to report can still trigger fraud allegations. The Keener Law Firm regularly counsels clients on proper reporting procedures to avoid these costly mistakes.

What Should You Do If Accused of Disability Fraud?

If you receive notice of a fraud investigation or overpayment determination, you must take immediate action to protect your rights. The SSA’s initial determination is not final, and you have appeal rights that you must exercise before the strict deadline.

First, gather all documentation related to your work activity, medical condition, and benefit payments. This includes pay stubs, tax returns, medical records, and all correspondence with the SSA. Document the timeline of events and any communications you had with Social Security representatives.

Consider whether your work activity truly violated program rules. Many investigations start from misunderstandings about reporting requirements or what counts as allowable work under trial work rules. If you legitimately qualified for work incentives or properly reported your activity, you should have strong defenses.

Never ignore SSA communications about fraud investigations. Failing to respond can result in default judgments and make your situation much worse. The agency interprets silence as an admission of wrongdoing.

How Can Legal Representation Help?

Disability fraud cases involve complex federal regulations and severe penalties that require experienced legal guidance. An attorney can review the specific facts of your case, identify viable defenses, and protect your rights throughout the investigation process.

Legal representation is essential when criminal charges are possible. Once the SSA refers your case to the Office of Inspector General for criminal investigation, you need immediate legal counsel to avoid self-incrimination and protect your constitutional rights.

The Keener Law Firm has successfully defended clients against fraud allegations by demonstrating good faith compliance efforts, challenging the government’s evidence, and negotiating favorable settlement agreements that avoid criminal prosecution. Our experience with these cases provides comprehensive protection for our clients.

Protecting Yourself from Future Problems

The best protection against fraud allegations is strict compliance with all reporting requirements. Report every job, every dollar earned, and every change in your work capacity to the SSA within the required timeframes.

Keep detailed records of all work activity, medical treatment, and communications with Social Security. Take advantage of work incentive programs when appropriate, but ensure you understand the rules and follow them precisely.

When in doubt about whether specific work activity is allowable, consult with an experienced disability attorney before starting the job. The cost of legal advice is minimal compared to the potential consequences of violating program rules. The Keener Law Firm provides guidance to help clients work safely while maintaining their vital disability benefits, protecting both their financial security and their legal standing.