Disability benefits are costly and tend to reduce labor supply. While spending can be contained by careful targeting, correcting past flaws in eligibility rules or assessment procedures may entail welfare costs. We study a major reform in Hungary that reassessed the health and working capacity of a large share of beneficiaries while leaving work incentives unchanged. Leveraging birthday and health cutoffs in the reassessment, we estimate employment responses to termination or reduction of benefits driven by income effects. We find that among those who exited disability insurance due to the reform, 60% were employed in the primary labor market, 3% participated in public works and 37% were out of work without benefits in the post-reform period. The consequences of exiting disability insurance sharply differed by pre-reform employment status. 80% of beneficiaries who had some employment in the pre-reform year worked in the primary labor market, compared to only 38% of those without pre-reform employment.