This paper analyses the labor market impacts of a policy initiative to reactivate Disability Insurance (DI) recipients on the labor market outcomes of DI beneficiaries by analyzing a large-scale and unique reform of the Hungarian DI system implemented in 2012. The reform prescribed a health revision for already approved beneficiaries under more stringent rules, with a fifth of the affected population either losing their DI status or suffering a decrease in their DI benefits. To identify the effect of the reassessment, we use that the policy included cut-off values in age and health damage. We find that employment rate, total wage amount, total monthly working hours all increased as an impact of the reassessment, but higher labour market activity could not fully compensate the loss in benefit, resulting in a reduction in the total income of the reassessed population. We also show that the labour market outcomes of the affected individuals – including occupation level and firm quality – did not return to their pre-DI levels.