SSDI: For Some It's a Surprise Bonus

Article Highlights:
  • Social Security Disability Insurance (SSDI) is available to people of any age with qualifying disabilities who have worked a set amount of time and paid into the Social Security system.
  • This article answers questions about the program including: who qualifies; what are the benefits; when and how to apply; and how to find help with the application process.
by Bill Norman on December 31, 2009 - 1:12am

QUEST Vol. 17, No. 1

Chad McCruden, 36, of Owing Mills, Md., has Friedreich’s ataxia. He was laid off in May 2009 from his job as a work incentive specialist at an independent living center.

McCruden applied for Social Security Disability Insurance (SSDI) benefits in June, was approved late in October and received his first check in December (plus five months’ worth of retroactive benefits).

Thanks to a solid 10 years of work history, McCruden receives a monthly SSDI check of about $1,500. He since has gone back to work part time, but because his income doesn’t exceed the governmental limit imposed on SSDI recipients, he still draws full SSDI benefits.

What’s SSDI?

Social Security Disability Insurance is a form of governmental assistance for people who have worked and paid taxes for a minimum period of time but who now must stop work due to disability.

Run by the U.S. Social Security Administration (SAA), it’s different than the standard Social Security retirement system (typically for people 65 or older) and Supplemental Security Income (SSI), which is available to low-income people who are elderly, blind or disabled, and who have never paid Social Security taxes or didn’t work enough to meet the requirements of SSDI.

SSA reports that nearly 7.5 million Americans currently receive SSDI benefits, and the number of people applying for them increases dramatically every year.

Who qualifies for SSDI benefits?

Most people approved for SSDI benefits are under age 65 and have worked a prescribed amount of time and paid money (FICA taxes) into Social Security.

They also are people who are judged to be fully disabled, unable to perform the work they once did, and unlikely in the future to earn more than a pre-set monthly amount, known as the Substantial Gainful Activity limit (SGA). For 2010, the SGA is $1,000 (before taxes).

In addition, some dependents of SSDI beneficiaries, including some children with disabilities and some spouses, may qualify to receive SSDI benefits because of FICA taxes the primary beneficiary paid into Social Security.

SSDI does not offer benefits for partial disability or short-term disability.

What are SSDI benefits?

SSDI beneficiaries receive monthly checks. The average SSDI check in 2009 was $1,063, but the amount varies, depending on how much money the beneficiary paid in FICA taxes while working. 

SSDI applicants also must wait at least five months to receive their first check, from the date their disability is confirmed by SSA.

SSDI payments continue as long as the beneficiary is disabled and hasn’t resumed work that pays more than the SGA.

When SSDI recipients reach retirement age, they’re automatically transferred to the regular Social Security retirement system, but receive the same monthly amount as they did under SSDI.

All SSDI beneficiaries, no matter their age, automatically receive Medicare after two years as a beneficiary. One exception are people with ALS (amyotrophic lateral sclerosis), who qualify for Medicare one month after they’re approved for SSDI benefits.

How do I apply for SSDI benefits?

Applicants can visit a local Social Security office; phone in a request to be mailed forms; or apply online. McCruden applied online and said he found it fairly easy.

How long does it take to be approved for SSDI benefits?

Due to the large number of applicants and an understaffed SSA, processing times can take months and SSA expects the time to increase significantly in 2010 and beyond.

However, people with some neuromuscular diseases are automatically considered by SSA as fully disabled for the purpose of qualifying for SSDI benefits. Those diseases include ALS, Friedreich’s ataxia, infantile-onset Pompe disease and type I spinal muscular atrophy (SMA). People with other forms of neuromuscular disease must prove that their conditions cause “significant disorganization of motor functions.”

When should I apply for SSDI benefits?

Considering the potential for prolonged SSDI application processing times, people should apply for SSDI benefits immediately upon learning they have a disability, even if they’re not yet ready to retire.

Are SSDI benefits subject to income tax?

Yes, up to 50 percent of the benefit received. However, SSA says the average monthly benefit is sufficiently low that only one-third of SSDI beneficiaries pay any tax on this type of income.

Can anyone help me navigate this complex process?

SSA Web sites, publications and staff can provide many answers to SSDI questions. Some companies and individuals make a living by advising SSDI applicants of the most likely ways to be approved for benefits. Usually, their fee is a percentage of the award they help you win.  

SSA has established agencies to provide no-cost counseling to people with disabilities about issues such as SSDI, other benefits and back-to-work programs.

Check with your MDA doctor

“The best way to get information to the SSA about your disability when you’re applying for SSDI benefits is through your doctor or neurologist at your MDA clinic,” Chad McCruden advises. “The language that goes into the letter is critical; the doctor has to be able to explain why your disability limits your ability to work.

“If your doctor doesn’t understand what muscular dystrophy is, you could be in for a long wait.”

For SSDI resources, including contact information for governmental agencies and companies that help obtain benefits, see InfoQuest Winter 2010.

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