Last week we highlighted a benefit available to children and adults who are disabled and have limited income and resources. This benefit, available through the Social Security Administration (SSA), is called Supplemental Security Income (SSI).
SSI is sometimes confused with the benefit we will cover today, which is Social Security Disability Insurance, or SSDI.
Similar to SSI, Social Security Disability Insurance pays a monthly benefit to those who qualify because of a medical condition that affects an individual’s ability to work and is expected to last at least one year or eventually cause death.
Unlike SSI, an individual is required to have a certain work history in order to receive Social Security Disability Insurance, and must be younger than age 65. SSDI is funded by the Social Security taxes, which are paid by both employers and employees, whereas payments for SSI come from general funds in the U.S. Treasury.
Work history requirements for eligibility for SSDI include how long and how recently an individual worked. The government uses a credit system to measure these factors. Credits are determined by an individual’s wages. In 2021, an individual receives one credit for every $1,470 earned, however, there is a maximum allowance of four credits per year. The total number of credits required to qualify for SSDI is dependent upon the age at which the individual becomes disabled.
Depending upon the circumstances, certain family members may also qualify for a benefit under the individual’s work history. Disabled children under the age of 18 may be eligible if a parent has earned enough work credits. In addition, an unmarried child older than 18 who became disabled before age 22 may be eligible under a parent’s credits, even if the parent is collecting disability themselves, has retired or has died. For more information about work credits visit www.ssa.gov.
An individual must experience a disability as defined by the SSA for at least 5 full months to be eligible for SSDI. SSDI payments will continue for as long as the individual remains unable to work, but periodic eligibility reviews will be conducted. Usually the first review will occur 6-18 months after the date of disability if the disabling condition is expected to improve. A review will take place about every 3 years if improvement is possible but uncertain, and about every 7 years if improvement is unlikely.
As with SSI, the government considers certain conditions to automatically meet disability standards and therefore benefits can be obtained more quickly. These “Compassionate Allowances” include certain types of cancers, early onset Alzheimer’s disease, and others.
After receiving SSDI benefits for two years, a disabled person will be eligible for Medicare benefits.
If an individual is receiving SSDI, certain situations must be reported to the SSA when they occur. These situations include marriage or divorce, receipt of a lump sum settlement or worker’s compensation, improvement in the disabling condition, or receipt of a pension from employment for which Social Security taxes were not deducted.
An individual who works while receiving SSDI should report all income, even if it is minimal. Individuals who desire to try working despite a qualifying disability may be eligible for a trial work period during which they can work and continue to receive full SSDI benefits. This trial work may take place for up to 9 months over a rolling 5-year period. The 9 months of work do not have to be consecutive.
An individual is considered to have met the threshold for one month of work if earnings exceed the amount designated for a single month for that particular year. In 2020, the designated amount was $910. In 2021 the monthly amount is $940.
This article has provided a brief overview of Social Security Disability Income. More information and the opportunity to file a claim are available on the Social Security website.
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