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Deductible medical expenses and Social Security Disability

Many people who live with a disability are able to work and still receive Social Security Disability benefits. These programs exist to encourage disabled people to try their hand at working without having to worry about losing their disability benefits immediately. Many disabled people spend a large amount of money on medical expenses, however. Is there a way that Social Security deals with these expenses incurred by disabled people trying to work?

It seems unfair to many that a worker who receives SSD benefits may have their benefits reduced even if a large portion of their earnings is used to purchase medical supplies and services. Social Security recognizes this by allowing a deduction for impairment-related work expenses. "Deduction" means that recipients can deduct the qualifying expenses from their incomes for purposes of computing their Social Security Disability benefits. This often results in more benefits for the recipient than if the expenses were not deductible.

In order to be deductible, the expenses must be impairment-related. This means that medical expenses that are not impairment-related are not deductible. Depending on the specific circumstances, non-deductible expenses could include physical examinations, dental checkups, optician expenses unrelated to a disabling visual impairment and health and life insurance premiums.

There are other limits on the expenses that are deductible. For example, the expenses must have been actually paid by the recipient. If some other payor pays the expenses, they are not deductible. Also, the payment must be made in cash, check, credit card or some other form of money. If the expenses are paid in kind, they are not deductible.

Source: Social Security Administration, "DI 10520.001 Impairment-Related Work Expenses (IRWE)," accessed on Oct. 1, 2017

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