Can You Receive Disability and Alimony Simultaneously?

If you receive or apply for Social Security Disability Insurance (SSDI) benefits, you may wonder whether those benefits will be affected by alimony or spousal support you receive from a former spouse. Both SSDI and alimony serve as financial support but are designed for different purposes. SSDI provides income to individuals who are unable to work due to a qualifying disability, while alimony is paid to support a former spouse after a divorce.

As a national disability law firm, The Keener Law Firm will answer all the questions you may have about SSDI or SSI benefits and how your right to such benefits relates to other income or resources you have. If you need help getting or retaining Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) call The Keener Law Firm today.

Understanding SSDI and Alimony

To better understand how receiving alimony may impact your SSDI benefits, it’s useful to have a grasp on how SSDI functions. Social Security Disability Insurance (SSDI) is a federal program designed to support individuals who are unable to work due to a medical condition that meets specific criteria set by the Social Security Administration (SSA). SSDI benefits are based on your work history and the amount of Social Security taxes you’ve paid over time, not on your current financial resources.

SSDI is not a means-tested benefit, meaning your financial assets or unearned income, such as alimony, do not affect your eligibility. However, SSDI does impose limits on earned income through what is known as “substantial gainful activity” (SGA). In 2024, for example, the SGA limit is $1,550 per month for non-blind individuals. Unearned income, like alimony, does not factor into these calculations, nor does it count toward the SGA limit.

On the other hand, alimony, or spousal support, is a payment from one spouse to another following a divorce intended to provide financial support based on factors such as the length of the marriage, the financial circumstances of both parties, and the earning capacity of the spouse receiving alimony. Since alimony is unearned, the SSA does not count alimony as income that would reduce your SSDI benefits, so receiving alimony will not disqualify you from SSDI or reduce the amount you receive.

Can You Receive SSDI and Alimony at the Same Time?

The short answer is yes—you can receive both SSDI and alimony simultaneously without one directly affecting the other. Because SSDI is not based on financial need but rather on your work history and medical eligibility, unearned income like alimony does not interfere with your SSDI benefits. SSDI primarily focuses on limiting earned income, so as long as your earnings do not exceed the SGA threshold, your SSDI benefits remain unaffected.

Impact on SSDI Benefits

SSDI benefits are calculated based on your earnings record and are intended to replace wages you can no longer earn due to your disability. As mentioned earlier, alimony is not counted when determining your eligibility for SSDI, nor does it affect the amount of SSDI you receive. Unearned income, such as alimony, is separate from the earned income that the SSA considers for eligibility purposes.

However, disability payments from other public entities intended to replace lost wages, such as workers’ compensation or other public disability benefits, can affect your SSDI eligibility and benefits amount. These public benefits can reduce your SSDI if the combined amount of public benefits and SSDI exceeds 80% of your average current earnings before your disability. Alimony, being private unearned income, does not fall into this category and will not impact your SSDI payments.

Tax Implications of Receiving SSDI and Alimony

One area in which receiving both SSDI and alimony may intersect is in your tax obligations. SSDI benefits are generally not taxable unless your total income exceeds certain thresholds. For individuals filing as single, if your total income exceeds $25,000, up to 50% of your SSDI benefits may be subject to federal income tax. If your total income exceeds $34,000, up to 85% of your SSDI benefits may be taxable.

Your tax liability regarding alimony can depend on when your alimony award was established. Alimony awarded before January 1, 2019 is treated differently by the IRS than alimony awards established after that date.

Given the potential complexities, it’s a good idea to consult with a tax professional to ensure that you are meeting your tax obligations correctly when receiving both SSDI and alimony.

Impact of SSDI on Alimony Payments

While receiving alimony does not reduce your SSDI benefits, your SSDI benefits may affect the amount of alimony you receive or are required to pay. Courts generally consider the financial circumstances of both parties when determining or modifying alimony arrangements. If you begin receiving SSDI, your former spouse may seek to modify the alimony based on your new income situation.

For example, if your SSDI benefits are substantial, your former spouse may argue that your need for alimony has decreased. This could lead to a reduction in the amount of alimony you receive. On the other hand, if you are the spouse paying alimony and you begin receiving SSDI due to a disability, you may be able to seek a modification to lower your alimony payments based on your reduced ability to pay.

Each state has its own laws governing how changes in income affect alimony, so it’s important to consult an attorney if you believe that receiving SSDI may lead to a modification of your alimony arrangement.

Special Considerations for SSI Recipients

It’s also worth noting that if you are receiving Supplemental Security Income (SSI) rather than SSDI, the situation is different. SSI is a means-tested program that provides benefits to individuals with limited income and resources. Because of this, alimony is counted as unearned income for SSI recipients, and it will reduce your SSI benefits on a dollar-for-dollar basis, after a small exclusion. If your alimony payments are substantial, they could disqualify you from receiving SSI altogether.