Hi Larry. I am on disability and am earning about $50 less a month than my limit at a part time job. My question is about a possible Christmas bonus. Is there a pay code that my employer could use that establishes a bonus as a gift and not earned income? As I say I am operating just below my limit so I believe any bonus that is considered earned income would violate me (for the last time). Or do I need to tell my employer not to give me a bonus to be safe? Thanks.

-Don.

Hi Don. Bonuses are considered as earned income, so your employer couldn't properly report a bonus as unearned. For substantial gainful activity (SGA) purposes, though, bonuses aren't necessarily counted by Social Security to have been earned in the month of payment. Instead, bonuses count as earnings in the month(s) in which the work was performed to earn the bonus.

For example, if a person is paid an annual bonus in December for work they performed throughout the year, then the total amount of the bonus would be averaged over 12 months. For more information, refer to section D of the following section of Social Security's operations manual: https://secure.ssa.gov/apps10/poms.nsf/lnx/0410505010.

I don't have enough details to know if your bonus might affect your disability benefits, but if you receive a bonus then it's important to report the specifics to Social Security. Without detailed information about the bonus, Social Security might incorrectly count the bonus as regular salary earned in the month of payment.

Best, Jerry