Social Security Disability – Eligibility & Benefits
The Federal government offers a variety of benefits under the Social Security program, for anyone who’s been working, earning and paying taxes in the U.S. Most of us are familiar with pension plans and retirement benefits of the program, but Social Security can even help you manage unforeseen expenses and income loss caused by disabilities during your lifetime.
There are two basic types of insurance offered by the program:
Social Security Disability Insurance
A plan that takes into account the duration of your working years and how long you’ve paid taxes, to offer financial benefits to you and some members of your family.
Supplemental Security Income
This program offers benefits based on a qualifying individual’s financial need.
Why is Social Security Disability Important?
We all feel like we’ll live forever and retain the strength and vigor of our youth, but disability can strike with little or no warning. A genetic condition, accident, injury at the workplace, illness or disease – these are just some of the factors that can leave you disabled, with no way to work and earn an income to support yourself or your family.
According to studies by the Social Security Administration, there is a 25% chance that you will be disabled between the ages of 20-67, that’s one in every four 20-year olds today!
How is Disability Defined by the Social Security Program?
Before we look at the eligibility and benefits of the program, let’s first understand how the SSA defines disability.
Unlike private insurance vendors, Social Security benefits can only be offered to individuals with total disability. Partial or short-term disability is not covered by the program, as it defines disability as an inability to work, with the assumption that working families have access to other financial resources (like workers’ compensation, insurance, savings and investments) for short-term disabilities.
According to the SSA website:
“We consider you disabled under Social Security rules if:
- You cannot do work that you did before;
- We decide that you cannot adjust to other work because of your medical condition(s); and
- Your disability has lasted or is expected to last for at least one year or to result in death.”
Further to the basic definition, the following five criteria are taken into consideration to decide if you are disabled:
- Your current earnings – If you’re working and earning over $1,070 as monthly income in 2014, you will not be considered disabled. If you are unemployed, the Disability Determination Services office will consider your application under the next four steps.
- Severity of your condition – If you’re applying for a claim, you cannot qualify if your condition does not interfere with basic work-related activities. If it does, your application moves to the next step.
- List of disabling conditions – The SSA maintains a list of medical conditions that are considered severe enough to leave you disabled. Your condition needs to be on this list or of equal severity as those listed. If it isn’t, the next step is considered.
- Your ability to continue working – If your condition is not on the list of medical conditions on the SSA list, the authorities will decide if it interferes with the work you did before it occurred. Your claim will be denied if your condition allows you to work as you did previously, but if it doesn’t, the last step will be taken into consideration.
- Your ability to do other work – Depending on your medical condition, age, education, work experience and skills, the SSA will determine if you can do any other work. If you can’t do the work you did previously, you may still be able to adjust to another job and provide for yourself, which will lead to your claim being denied. It’s only when you can’t adjust to other work that your claim will be approved.
The SSA has also launched two ‘Benefits for People with Disabilities’ initiatives to expedite the processing of new disability claims:
- Compassionate Allowances: Medical conditions that usually qualify for disability (like acute leukemia, Lou Gehrig’s disease (ALS) and pancreatic cancer) can be allowed right after a confirmed diagnosis.
- Quick Disability Determinations: Cases with a high probability of allowance are identified through the use of sophisticated computer screening, which allows for quicker processing of cases.
Eligibility Criteria for Social Security Disability Benefits
Just like any other insurance plan, you have to meet certain eligibility criteria according to Social Security’s definition of disability, before you can receive assistance from the program.
- You have to be fully insured at the time of onset of disability
- For at least five of the last ten years, you have worked in employment which is covered by Social Security, if the disability begins after the age of 31.
- You have worked at least for the greater of six quarters if the disability begins before the age of 31, or at least half of the quarters between the age of 21 and the age at which disability began.
- You have to be under the normal age for social security retirement, since after retirement age, your disability benefits convert to retirement benefits.
- If you have a physical or mental impairment which does not allow you to perform any substantial work, or are suffering from a disease which is terminal or expected to last at least a year.
Social Security Disability Benefits
Social Security disability benefits will be given to a disabled worker who qualifies for the program, until whichever of the following occur earliest:
- End of Disability – After the disability ends, the benefits are terminated in the second month.
- Death of the Individual – In case of the worker’s demise, the benefits are terminated in the month prior to his/her death, e.g. If the individual dies in December, the November benefits will not be paid.
- Retirement Age – When a disabled worker reaches normal retirement age, disability benefits are terminated and retirement benefits take effect.
Additional benefits of the program include:
Like retirement spousal benefits, disability benefits for a spouse are calculated as 50% of the worker’s benefit, less if the spouse is under the normal retirement age. These benefits are subject to a family maximum limit.
For minors, 50% of the disabled worker’s benefit is provided, subject to a family maximum. This benefit applies to children who are under 18 (or under 19 if they are still in high school).
The Bottom Line for Social Security Disability
While the program may offer you financial assistance in case of a disability, the payouts are normally a fraction of your regular earnings, which may or may not cover all your expenses. Still, it’s a relief to know that you won’t be left high and dry in case you cannot provide for yourself in the future!
If you feel that you need more coverage or your family’s expenses will not be met under the Social Security program, you should consider investing in Disability Insurance plans on your own. In addition to larger payouts, these policies normally include a wider range of conditions, with less stringent eligibility criteria for disability benefits.