That’s the part of the rules that kinda drives me crazy. I’m fortunate enough (so far) never to have had to seek any kind of disability benefits in 40+ years of working life, but I know quite a few people who have. And for all of them in the US system, if they were getting benefits long-term, they were quite frustrated at not being able to improve their standard of living by doing some (or some more) paying work, but terrified of the prospect of getting cut off from benefits because they were earning “too much”.
ISTM that making benefits a binary decision—either you’re disabled and entitled to benefits and must not earn more than a small additional amount, or you’re not disabled and no bennies for you—is just plain stupid. How about this instead? Once somebody actually qualifies for disability benefits, if they start earning on the side, let them keep their eligibility but just cut the amount of their benefits on a sliding scale.
As in, the disabled person gets $x per week in benefits, and is allowed to earn up to $y per week in addition, free and clear. Fine. But then if they get more healthy and/or more motivated to earn more, let them earn ANY amount, say $z per week, and just reduce their benefits by, say, $(z-y)/3 per week.
So, each week they’re initially getting their benefits amount $x, they’re earning their full extra-income allowance $y, and they’re even earning some additional income $(z-y). And their benefits amount is being cut by no more than one-third of that additional income amount. So they are still being strongly incentivized to keep earning, because they’re still gaining from earnings way more than they’re losing from benefit cuts.
That way, they won’t lose their benefits entirely until and unless their additional income $(z-y) reaches three times the benefit amount $x. At which point I think it’s fair to decide that they don’t really need the benefit anymore.
Make it worth their while to earn however much income they can or want to even while they’re still on disability, and they won’t be just passively shunning employment for fear of not being able to earn enough to forgo their benefits.