Understanding Social Security Disability
Social Security disability programs exist to ensure that citizens in need are given the necessary assistance for economic security. These programs allow individuals who are physically incapable of performing necessary work, for one reason or another, to have enough income to support their basic necessities.
Navigating social security and disability can become necessary after a life-changing diagnosis or significant injury. These are stressful, trying life experiences that can be made all the more difficult when coupled with financial need. Social Security disability applicants often ask questions like:
- What is Social Security disability?
- What is Supplemental Security Income?
- What are the qualification requirements?
- How do I apply?
- What kind of benefits or income can I expect?
To answer these questions and more, AdvisoryHQ has compiled a guide to the world of Social Security and disability benefits.
See Also: Social Security Tax Rate (All You Need to Know)
What Is Social Security?
Social Security is a program enacted by the United States government to help provide economic security for Americans with particular needs. The program is designed to offer support to citizens who are currently without other means to provide for basic necessities.
Social Security works as an economic safety net to help keep at-risk individuals from falling into extreme poverty. It specifically provides for:
- Retired workers
- Disabled individuals
- Families of retired workers
- Families of disabled individuals
- Families of deceased workers
How Is It Funded?
Social Security is funded mostly through payroll taxes. Approximately 163 million Americans contribute to the program through these taxes. Around 59 million Americans collect monthly benefits from Social Security programs.
These programs are not pre-funded. This means that funds paid into the system today almost immediately flow out of the system in the form of monthly benefits. In a pre-funded system, like a private pension, money is compiled in advanced so that it will be available to a worker when they retire at a later date.
What Are Social Security Disability Programs?
The Social Security program is an umbrella under which smaller, more specific programs are run. Social Security disability refers to programs that specifically benefit individuals who are unable to provide for basic means due to a disability.
There are two main Social Security disability programs. Social Security Disability Insurance, or SS disability, and Supplemental Security Income Disability, or SSI disability.
These programs are both offered by the Social Security Administration. Both are designed to offer financial assistance to disabled individuals and their families. However, each program serves a unique purpose, and each offers assistance under different circumstances.
What Is Social Security Disability Insurance?
Social Security disability insurance is also called SSDI, Social Security disability, or just SS disability. The SS disability program offers Social Security disability payments and benefits to individuals who meet the official definition of “disabled.” SS disability benefits can cover certain family members of qualified individuals as well.
SS disability is only able to cover those who have worked and paid into the Social Security program for a certain period of time. These individuals have built “insurance” by paying into the system and earning the right to be covered by this particular program.
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SS Disability Qualifications
SS disability benefits can only be collected by qualified individuals and certain family members. There are two main qualification categories for SS disability applicants; work qualification and medical qualification.
SS Disability Work Qualification
To qualify for SS disability, an individual must have worked a certain number of years in a job through which they paid social security taxes. This is measured through work credits. Every worker who pays into the Social Security and disability system earns up to 4 work credits a year.
The number of required credits to qualify for Social Security disability income depends on an individual’s age at the time that they became disabled. A 50-year-old worker must have at least 28 work credits or to have worked 7 years in order to qualify for SS disability. Applicants must have worked at least 5 years of the required 7 within the last 10 years.
SS Disability Medical Qualification
In order to receive SS disability benefits, a worker must also have a medical disability that meets the programs minimum requirements. Social Security disability insurance benefits and income are available only to those suffering from severe, long-term, total disability.
Social Security Disability – Medical Qualification
The definition of disabled is made of three parts:
- Severe means that it must interfere with basic, work-related activities.
- Long-term means that it must have lasted or be expected to last for at least one calendar year.
- Total means that it must prevent a worker from performing substantial gainful activity.
Substantial gainful activity is an important factor for SS disability benefit qualification. Applicants must be unable to earn more than $1,130 each month (or $1,820 if the applicant is blind) to qualify for Social Security disability income and benefits. This means that applicants do not need to be completely unable to work in order to be approved for the benefits.
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Social Security Disability Income and Benefits
Qualifying applicants will receive monthly Social Security disability payments. The amount of Social Security disability income allowed is determined based on each recipient’s lifetime earnings before their disability began.
Social Security disability payments are in no way affected by the severity of the disability. Qualifying medical conditions are all treated as equal by the Social Security Administration for this program.
The average monthly social security disability payment in July of 2015 for disabled workers was $1,165. For a disabled worker, spouse, and one or more young children, the average monthly payment was $1,979.
Social Security Disability Health Insurance Options
Along with monthly payments, qualified applicants can also receive Social Security disability health insurance or insurance assistance of some kind.
Approved Social Security disability insurance benefit recipients with Medicaid or Medicare are considered to be covered under the healthcare law. This means that they are not required to have a Marketplace healthcare plan and will not be fined.
Those without health coverage may qualify for savings on a private health plan for Medicaid coverage. Recipients with Medicaid coverage cannot supplement or replace that coverage with a Marketplace plan. However, if they were covered by a plan before they qualified for Medicare, they are allowed to keep that coverage.
If an applicant is approved for Social Security disability health insurance benefits while they are in the Medicare waiting period, they may be eligible for Medicaid coverage during that period.
How to Apply for Social Security Disability
Social Security disability insurance benefits can be applied for online, over the phone, or in any local Social Security office. Applicants may be asked for:
- Medical records
- Lab results
- Prescription information
- Work history information
- General contact and identification information
Once an applicant is approved for Social Security disability insurance benefits, they will not be able to receive anything until they have been disabled for 5 complete months. Applicants who are not approved right away will be paid disability back pay as far back as the 6th month after their disability began, or the onset date.
After back payments are made, or after immediate Social Security disability insurance benefit approval, the recipient will be given monthly SSI disability payments. These benefits may or may not be subject to income taxation depending on the overall income of the household.
Approved applicants can receive their Social Security disability payments for as long as the disability persists. The Social Security Administration will conduct a review of each disability recipient every 1 to 3 years to make sure that a disability continues to qualify for benefits.
It is very common for Social Security disability applicants to be denied for their first application submission. However, denials can be appealed. First, applicants must request that the denial be reviewed within 60 days after they received the notice of denial. For most states, an applicant can request that a different claims examiner review their file. If the claim is denied a second time, an applicant can then request a hearing with a judge to hear their claim.
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What Is Supplemental Security Income?
Supplemental Security Income, or SSI disability, is a part of the Social Security program. Just like Social Security Disability it provides economic security for those who have reached retirement age or meet the definition of disabled.
The SSI disability program is unlike the SS disability benefits program because it is based entirely on financial need. Applicants qualify for the program based on their income level. SSI disability also stands out from other Social Security programs because it is funded through general tax revenues and not through Social Security taxes.
SSI Disability Qualification
To qualify for SSI disability benefits applicants must have no other means of sufficient financial support and must be completely disabled. There are a few exceptions: for example, applicants over 65 years old can qualify without a complete disability.
SSI Disability Qualification
SSI Disability Definition
To be approved for SSI disability benefits, an applicant must meet the program’s definition of disabled. Adult applicants for SSI disability benefits must be unable to engage in substantial gainful activity due a medically determined mental or physical impairment for at least 12 months.
The Social Security Administration measures substantial gainful activity based on the income of a SSI disability applicant. However, the maximum allowed income for an applicant is determined based on the nature of the disability.
For statutorily blind persons the income limit for consideration in 2017 is $1,950 a month. For persons with other disabilities the income limit for consideration is $1,170.
Coupled with this income limit, an applicant must have a medically determinable impairment to qualify for SSI disability benefits. This means that a disability must be supported by medical evidence that includes signs, symptoms, and laboratory test results.
SSI Disability Income Measurement and Limits
Besides meeting the definition of disabled, SSI disability benefit applicants must also be able to demonstrate financial need. This is done through a measurement of debt, income, and assets.
SSI disability benefit applicants who are single cannot owe more than $2,000 worth of total countable assets or $3,000 for a married couple. These debt limits do not take into account a home that is used as a primary residence and one vehicle.
Applicants cannot have more than $2,000 worth of assets of any kind to qualify for SSI disability benefits. Assets refers to anything of significant value that can be owned such as:
- Finances held in checking or savings accounts
- IRAs
- Life insurance policies
- Additional vehicles
In order to qualify for SSI disability income, an applicant’s monthly income cannot exceed the maximum possible payout amounts as listed above. However, some income is excluded from this income limit. These exceptions include:
- $20 a month of unearned income
- $65 a month of earned income and one-half of earned income over $65
- Earned income spent on impairment-related work expenses for disabled or blind applicants
- The first $30 of infrequent or irregular income per quarter
- The first $60 of infrequent or irregular unearned income per quarter
- Medical care
- Reimbursements from social services agencies
- Food stamps
- Housing assistance
SSI Disability Benefits and Income
SSI disability payments provide funds that allow recipients to pay for essentials like food and shelter. These SSI disability payments are received monthly and can be used to supplement additional income that does not exceed the program limits.
The maximum SSI disability payments available in 2017 break down as follows:
- Individuals can receive up to $735 a month
- Eligible Couples can receive up to $1,103 a month
- Essential persons can receive up to $368 a month
Some SSI disability income recipients will recover from their disability to rejoin the workforce. When this happens, SSI disability income does not immediately stop. Recipients may enter a trial work period to determine if they are able to rejoin the workforce and end their SSI disability income.
SSI disability benefits will not end until a recipient has worked for at least 9 months over a 60-month period. In 2017, any month when earnings exceed $840 is counted towards the 9 months.
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How to Apply for SSI Disability Benefits
SSI disability applications cannot be filled out or submitted online. Applicants must either contact the Social Security Administration over the phone or their local social security office to make an appointment. At this appointment, a social security representative will interview and fill out paperwork for each applicant.
Social Security Disability Payments
SSI disability applicants will need to answer questions concerning:
- Income
- Assets
- Living arrangements
- Medical history
- Affects of disability
- Bank account information
Many applications for SSI disability benefits are denied when they are first submitted. Applicants can appeal when a claim is denied or when they feel that higher benefits should be given.
Appeals can move through four levels including:
- Reconsideration
- Bringing the claim before an Administrative Law Judge
- An appeals council review
- Federal court
After the applicant has received a notice, all appeals must be submitted in writing within 60 days.
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Conclusion: Understanding Social Security and Disability Benefits
Social Security benefits are a good resource to consider if you find yourself in need and with limited options. Both the SS disability and SSI disability programs can offer citizens a useful income and an avenue to health benefits as well.
Keep some of our larger points in mind:
- SS disability requires applicants to have a suitable work history
- SSI disability is based on financial need
- Denied claims can be appealed
- In the event that a recipient recovers from their impairment, a transitional period can help them re-enter the workforce
Applying for benefits does not need to be complicated or intimidating. Armed with the best information, every person can know what to expect from the program and what their options are in the event that they are denied.
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