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What’s Different When Working on Child’s Benefits


Within the wonderful work of federal and state benefits we encounter benefits programs that seem determined to add to their already confusing regulations by laboring under titles that are unquestionably similar to other programs. Thus we have SSI and SSDI, Medicare and Medicaid, and here in Maryland there’s EID (Employed Individuals with Disabilities) which shouldn’t be confused with EID (Earned Income Disregard). To that list we can also include Child’s Benefits and its seeming alter ego Childhood Disability Benefits (CDB). Looking closer they are, in fact, distinctly separate benefits and follow quite different sets of rules with regard to eligibility and how work affects those benefits.

To be eligible for child’s benefits the beneficiary must be an unmarried individual child, under 18 years of age, or under 19 if in secondary school, and, crucially, be the dependent or survivor of a parent who is retired, receiving SSDI, or is deceased and had accrued enough work credits to have qualified for SSDI or retirement benefits. There is no disability requirement for someone receiving child’s benefits. If someone has a disability he can apply for CDB upon reaching the age of 18 and could only then begin to receive CDB. CDB doesn’t start until you’re 18, child’s benefits end when you’re 18 (unless, of course, you’re still a full-time student in secondary school).

When Social Security looks at earned income and how it affects CDB they follow exactly the same rules as with SSDI. Significantly, with child’s benefits Social Security goes by completely different set of regulations. In fact the rules that apply are actually the same ones as for someone who has taken early retirement. They are both subject to an ‘earnings test’ which allows the beneficiary, in 2018, to earn up to $17,040 (the ‘exempt amount’) without having any of his benefits reduced.  If the exempt amount is exceeded $1 of the benefit is subtracted for every $2 earned over the limit. So, for example, a 17 year old on child’s benefits earning $18,000 in 2018 would be $960 over the exempt amount and would have half of that amount ($480) reduced from his annual benefit amount.

Following that same example, his 18th birthday is likely to bring about some big changes, as he may just lose his benefits altogether if he’s no longer in secondary school and he’s not disabled. If he meets the disability requirements for CDB he can forget about all about the earnings test until he’s close to retirement age and can now focus on learning all about those SSDI work phases.

 

To calculate by how much child’s benefits might be reduced you can go here: https://www.ssa.gov/cgi-bin/retireTest.cgi