, ,

How Does Social Security Disability Insurance Work?

Man in wheelchair researching Social Security disability

It’s not something most of us think about on a daily basis, but injury and illness prevent millions of Americans from earning an income each year. In fact, according to the Social Security Administration (SSA) a little more than 1 in 4 of today’s 20-year-olds will become disabled before reaching retirement.

While Social Security benefits were first extended to disabled workers in 1956, they were neither then or are they now a guaranteed (or even an adequate) replacement for your previous income. In 2015, Beneficiaries of Social Security Disability Insurance (SSDI) received an average of less than $1200 per month.

What’s more, unless their impairment is extremely severe, new applicants wait an average of 3 to 5 months just to receive a decision from SSA. A reconsideration (the first level of appeal) takes about as long. Even after being approved, you won’t receive payments until a full 6 months after your disability began.

The Short Story of Determining Disability Insurance Eligibility:

In a word, Social Security Disability Insurance is only a financial safety net for eligible workers with long-term and very severe disabilities.

As the SSA makes very clear, SSDI is not the answer to all your financial needs in the case of illness or injury:

Social Security program rules assume that working families have access to other resources to provide support during periods of short-term disabilities, including workers’ compensation, insurance, savings and investments.

For short-term disability insurance coverage and/or to help you stay afloat through Social Security’s application period, build up your emergency fund, ensure your investments are solid and consider supplemental income loss insurance like that offered through SafetyNet™.

The Longer Story of Determining Disability Insurance Eligibility

Should you find yourself looking into Social Security Disability Insurance, start by asking yourself these questions.

Do you have sufficient work credits?

Because SSDI is funded through payroll taxes, you are “insured” if you have worked for a certain number of years and have made contributions to the Society Security trust fund (that’s what those “FICA Social Security” taxes are on your paycheck). Very generally speaking, you need to have worked the equivalent of full-time for at least 10 years prior to becoming disabled. (Younger workers may qualify with fewer credits.) For more specific information on work credit eligibility, consult these benefit calculators.

Keep in mind: just because you have worked and payed Social Security taxes, does not mean you are automatically eligible for disability benefits should you become ill or injured. In fact, many disabilities that impede you from working will not qualify you to receive SSDI.

Is your impairment severe enough?

There are two aspects to determining the severity of your impairment.

First, your impairment has to be severe enough that you cannot perform your previous job duties and the SSA determines that your condition will not allow you do adjust to new job duties.

Second, your impairment must be expected to last at least 12 months. The list of SSA impairments gives you a sense of what disabilities might qualify. You may be surprised at what that does and does not include. People in automobile accidents, for example, are often out of work for months on end. Yet, broken bones and related traumas are usually expected to heal in less than one year, meaning SSDI won’t help.

Are you prepared?

Be aware that your application will require lots of paperwork, including: all medical records; contact information for all your doctors, caseworkers, hospitals and clinics; and lists of medications, laboratory and test results. You’ll also need to provide information about your education and work history and your family.

Finally, be warned: In parts of the country the initial application and appeals time for SSDI is growing due to a rise in disability claims due, in part, to the fact that the work population is aging.

Get Help When Determining Disability Insurance Eligibility

Taking on such a complex challenge is difficult in the best of times. When you are adjusting to a severe impairment, it can be downright discouraging. To begin, call a representative and contact your nearest Social Security office and ask for help.

Disclaimer: This article represents the author’s high level understanding of Social Security disability benefits and qualifications. Please consult the Social Security Administration for exact details on benefits and qualifications.