Can I Work Part Time While Collecting Disability?

Types of Disability Coverages Available

The two main types of disability coverage are short-term and long-term. Short-term disability (STD) plan benefit periods last from several weeks to a maximum of two years. Long-term disability (LTD) plans pay benefits for a couple of years up to the rest of the insured's life. Most disability plans, except for the coverage provided by the Social Security Administration, only cover illnesses and injuries that occurred away from work as job-related medical conditions are covered by worker's compensation.

Disability plans workers buy directly from insurance companies pay residual benefits to insureds who can still work with their medical conditions. Residual benefits pay insureds fractions of their full disability amounts. These benefits typically kick in when insureds suffer income losses of 20 percent or more.

The Social Security Administration permits individuals to continue receiving disability benefits while they attempt to get back to work. Through its work incentives program, the SSA provides several monthly periods in which individuals can test their abilities to work while getting full disability benefits. The trial periods can last 60 months and upon completion they are given extended periods lasting 36 months. Individuals are given full benefits during each month of the trial periods; this continues during the extended periods as well as long as their earnings don't exceed $1,000 per month or $1,640 if blind.

Temporary disability insurance plans are state-sponsored coverages. These plans' benefit periods last for several months. Only five states have temporary disability insurance plans: Hawaii, Rhode Island, New York, New Jersey and California. Some states allow workers to earn part-time income while receiving disability benefits. California, for example, reduces insurance payments if the workers' part-time earnings and their full benefits payments exceed their pre-disability salaries.