Earlier this month an Amarillo, TX woman pled guilty in federal court to participating in a scam that allowed her brother-in-law to collect $42,000 worth of Social Security disability payments he was not eligible for because he was working.
The woman, who co-owned a concrete business, hired and employed the man who was allegedly collecting fraudulent disability benefits between April 2010 and October 2012. Instead of collecting his paycheck and informing Social Security that he was not disabled any longer, the man convinced his employer to have work pay directed to his wife, as he reported no income from work. Court records showed the man was receiving $1,684 every month in Social Security disability.
As of 2013, Social Security rules prohibit a disabled worker from collecting more than $1040 in gross income every month from work-related activity. Any work-related activity that pays a disabled worker more than $1040 per month in gross income is considered Substantial Gainful Activity. Social Security rules clearly state “to be eligible for disability benefits, a person must be unable to engage in SGA.”
This case shows that Social Security and the federal government will not turn a blind eye to those who are trying to scam the system. Whether a person is paying Social Security taxes or not on work income, all of that income counts towards the SGA limit. Those who purposely try to deceive Social Security, as in this case, can face federal charges and those who even unknowingly collect undeserved Social Security disability payments can be forced to pay those benefits back.
When Social Security asks an applicant about all income earned from work-related activity it is wise to report everything whether taxes were deducted or not.
For more information about Social Security’s rules related to SGA click here.
