POD - Andre Scenario

Andre

*This scenario was not updated with the 2019 POD threshold and offset amount.

Andre, who is not blind, is self-employed as an IT professional. He has no impairment-related work expenses. Explore how Andre’s income will change under the new POD rules.

Net profit for the year	$18,000
Average net monthly earnings	$1,500
SSDI benefit	$1,100/month

Andre’s IT consulting business did well last year. He reported a net profit of $18,000 on last year’s tax returns. With this profit level, Andre’s average monthly earnings are $1,500, which is higher than the Substantial Gainful Activity level ($1,180 for 2018). Andre’s monthly SSDI benefit is $1,100. The table below shows Andre’s income under current SSA rules and the new POD rules.

Current SSA rules: Andre’s monthly income will change depending on whether he has completed his Trial Work Period (TWP). If Andre earns $1,500, his monthly income in the TWP will be $2,600. After the TWP, his income will be $1,500.
POD rules: Andre’s monthly income will be $2,275 if he earns $1,500.

Andre should consider his TWP status and future earnings before enrolling in POD. Andre will benefit from the POD new rules if he expects to regularly earn more than $1,180 per month (or $14,040 in net profit per year).

	Current SSA rules (in the TWP)	Current SSA rules (TWP complete)	New POD rules (always the same rules)
Average net monthly earnings	$1,500	$18,000 /12 months = $1,500	$1,500	$18,000 /12 months =$1,500	$1,500	$18,000 (net profit on last year's tax return) /12 months =$1,500
Monthly SSDI benefit (earnings adjusted)	+$1,100	If Andre is still in his nine-month TWP, he will receive his full SSDI benefit amount this month.	+$0	If Andre has completed his TWP, he will not receive his SSDI benefit this month because he earns more than the monthly non-blind Substantial Gainful Activity amount of $1,180.	+$775	Andre earns more than the monthly POD threshold amount of $850. Under the new POD rules, his SSDI benefit will be reduced by $1 for every $2 he earns over $850. Earnings used to calculate POD offset= $1,500 (monthly earnings) - $850 (POD threshold) = $650 POD offset = $650 (POD offset earnings) / 2 ($1 for $2 offset) =$325 Monthly Benefit= $1,100 (full SSDI benefit) - $325 (POD offset) = $775
Monthly income	=$2,600		=$1,500		=$2,275

Current SSA rules
(in the TWP)

Current SSA rules
(TWP complete)

New POD rules
(always the same rules)

Average net monthly earnings

$1,500

$18,000
/12 months
= $1,500

$1,500

$18,000
/12 months
=$1,500

$1,500

$18,000 (net profit on last year's tax return)
/12 months
=$1,500

Monthly SSDI benefit (earnings adjusted)

+$1,100

If Andre is still in his nine-month TWP, he will receive his full SSDI benefit amount this month.

+$0

If Andre has completed his TWP, he will not receive his SSDI benefit this month because he earns more than the monthly non-blind Substantial Gainful Activity amount of $1,180.

+$775

Andre earns more than the monthly POD threshold amount of $850. Under the new POD rules, his SSDI benefit will be reduced by $1 for every $2 he earns over $850.

Earnings used to
calculate POD offset=

$1,500
(monthly earnings)
- $850
(POD threshold)
= $650

POD offset =

$650

(POD offset earnings)
/ 2
($1 for $2 offset)
=$325

Monthly Benefit=

$1,100
(full SSDI benefit)
- $325
(POD offset)
= $775

Monthly income

=$2,600

=$1,500

=$2,275

Scenarios

Andre