A person born in the year 2000 has about a 1 in 4 chance of being disabled before reaching full retirement age at 67. For workers who become disabled on the job, Social Security Disability Insurance (SSDI) is a lifeline.
Like Social Security Retirement Benefits, Social Security Disability Benefits are only available to workers who have obtained work credits and paid payroll taxes. Depending on the insured person’s work performance, the spouse or dependent child may be eligible for either benefit.
The SSDI application process is notoriously difficult. Those eligible for benefits must follow many strict rules, especially when it comes to work. This article explains how SSDI works and answers frequently asked questions about disability benefits.
Who is eligible for the SSDI Benefit?
Eligibility for Social Security Disability Insurance is based on two criteria: having a medical diagnosis that meets the Social Security definition of disability and work history.
medical diagnosis
You must be diagnosed with a physical or mental health condition that is likely to prevent you from working for at least one year or cause death. The Social Security Blue Book contains an extensive list of conditions that meet the minimum standards of disability.
However, having one or more of the listed conditions does not automatically make you eligible for disability benefits. Likewise, even if your condition isn’t listed, you may be eligible if your medical diagnosis meets Social Security’s disability criteria.
work history
40 work credits are generally required to receive Social Security, including disability benefits. In 2023, you will need $1,640 in quarterly revenue to earn one work credit. You cannot take more than 4 credits in a year.
However, younger workers who have paid social security taxes can qualify with fewer credits if they become disabled. This means that you were earning work credits in the period immediately prior to becoming disabled. For example, if you are 31 years old or older, you must have been working for 5 out of 10 years before you developed the disability.
How do I apply for SSDI?
You can apply for Social Security Disability online, in person at your local office, or by calling 1-800-772-1213 (TTY: 1-800-325-0778).
Documents that verify your identity, such as a birth certificate (or proof of citizenship or legal alien status if not born in the United States), plus W-2 or self-employed tax records, medical evidence, and be prepared to present documents related to your temporary stay. Or any regular workers’ compensation benefits you received.
SSDI benefits have a 5-month waiting period. You cannot claim until six months after you became disabled, known in Social Security parlance as your disability date. What’s more, in 2021 he took an average of five months to process SSDI applications, while many states have a longer backlog.
Do not delay your application just because you do not have all the required documents. Social Security staff can help you find them.
Do I need a lawyer to apply for SSDI?
No. However, given that about two-thirds of her initial SSDI applications are rejected, she should seriously consider consulting an attorney.
Lawyers representing SSDI applicants handle contingencies. This means that you will only be paid if you win the lawsuit. It is illegal to charge an upfront fee to represent someone in a disability claim.
If your application is approved, your legal fees will be capped at 25% of your initial payment (including lump sum repayment of benefits beginning six months after your start date) or $6,000, whichever is less.
What happens if my application is rejected?
If your first application for disability benefits is denied, you have four opportunities to appeal. After a claim is denied, there is usually a 60-day grace period to move the case to the next stage.
- Ask for reconsideration: Start by asking your local disability determination service, the state-level social security office that processes disability claims, to review your initial application. During this time, you may submit additional evidence, such as medical records, to support your claim.
- Request a hearing with an administrative law judge: If your complaint is denied, you may request a hearing before an administrative law judge.
- Submit it to the Appeals Council. If the judge dismisses your case, the next step is to take your case to the SSA’s Appeals Council.
- Appeal to Federal Court: If the Appeals Council panel denies your claim, your final option is to challenge the decision in a United States District Court.
How are disability benefits calculated?
The Social Security Administration calculates SSDI benefits as if you had already reached full retirement age, which is 67 for those born after 1960. SSDI’s maximum benefit is the same as the maximum monthly benefit for someone retiring at full retirement age, and in 2023 he will be $3,627.
However, the benefits of the average SSDI are significantly lower. In 2023, the average monthly salary for SSDI recipients is only $1,483, and for retirees he is $1,827.
Disability benefits are generally lower than retirement benefits. This is because Social Security uses average annual income to calculate benefits. Wages tend to rise over time. Workers with disabilities tend to have lower average earnings because they often miss high-earning years.
After 24 months of receiving SSDI payments, you are generally eligible for Medicare regardless of age.
Are you allowed to work while collecting SSDI?
You can work while collecting SSDI, but it’s very limited. Social Security disability benefits will cease in 2023 when a non-visually impaired person engages in substantial paid activity, defined as earning at least $1,470 a month, and if blind, he earns at least $2,460.
However, a nine-month probationary period is allowed for testing jobs without compromising SSDI eligibility. The trial period can be taken for several consecutive months or spread over seven years. During the probationary period, you can earn as much as you want without affecting your benefits, but you must report your income to Social Security. In 2023, any month in which you earn at least $1,050 will count as a trial month.
What is the difference between SSDI and SSI?
Supplemental Security Insurance (SSI) is available to people with disabilities or over the age of 65, but eligibility is limited to those with limited income and resources. Unlike SSDI recipients, SSI recipients do not need to get work her credit. The maximum monthly SSI benefit for an individual is only $914 in 2023.
Other frequently asked questions (FAQ)
What happens to my SSDI benefits when I reach retirement age?
Does Social Security recognize partial disability?
No. The Workers Compensation Program and the Veterans Administration pay benefits for partial disability, but you must meet Social Security full disability criteria to receive benefits through the SSDI.
Can I collect my spouse’s or ex’s SSDI?
You May Be Eligible, Like Social Security Retirement Benefits spouse allowance If your current or former spouse receives SSDI monthly benefits. The maximum amount you can receive is her 50% of your spouse’s primary insurance amount. But only if it’s higher than your social security benefits.
Robin Hartill is a Certified Financial Planner and Senior Writer for The Penny Hoarder. She writes her Dear Penny Personal Finance Advice column. Send your tough financial questions to AskPenny@thepennyhoarder.com.
It was originally a personal finance website that empowers millions of readers across the country to make smart money decisions through practical, inspirational advice and resources on how to make, save, and manage money. It was published in Penny Hodor.
