The basics of the Social Security Disability Income Program
By Ted Norwood, General Counsel and Director of Representation, Integrated Benefits, Inc.
The United States Social Security Administration offers two programs—confusingly named Social Security Disability Income and Supplemental Security Income—aimed at providing or supplementing the income of people who are unable to work.
SSDI (also called Title II benefits) provides disability coverage for individuals who have paid enough Social Security taxes. The second program, SSI or Title XVI, provides a smaller benefit for people who haven’t worked long enough to qualify for Title II benefits and established a financial need.
SSDI and SSI require the same medical requirements to receive benefits. However, SSI also requires claimants to pass a stringent means, or income, test that establishes the applicant’s need.
For the purposes of this post, I’m going to focus on the SSDI program. This benefit has greater relevance than SSI to the majority of employers and workers. In addition, this program frequently interacts with employee benefits, especially long-term disability policies.
But before I proceed, it’s important to remind you that I’m presenting basic information. If you have specific legal questions about SSDI, you should reach out to a lawyer. SSDI is a huge program with many regulations and significant administrative entities. My goal in this article is to focus on a few key elements that are important to employers and employees.
I find that most people know something about the SSDI program and many hold opinions on it already, but there is an abundance of misinformation. Before you can understand SSDI’s role in workplace absences, you must understand the program’s basics.
In many ways SSDI is like a private long-term disability policy that you have through the government. Like any insurance policy, the terms are important.
You must have worked to qualify
To receive SSDI benefits, you must have worked and paid the SSA’s taxes. If you are an independent contractor and don’t pay FICA taxes, you may not be covered. There are boring rules that you can access here if you want more information.
If you want to know if you are covered, you can simply contact SSA and they can tell you if you are insured and when your insured status would end if you stopped working.
You must qualify medically and vocationally
If you are covered, you may qualify medically for SSDI if you are:
- Not working
- Have limitations caused by medical conditions expected to last at least a year, and
- You are unable to sustain substantial gainful activity due to your limitations.
The SSA will deny benefits if they believe you can still perform a significant number of jobs that exist in the national economy or if you can perform past work (from the last 15 years).
Many Issues are surprisingly irrelevant to the SSA
Social Security does not consider income in its evaluation of disability. If a person who made a high salary can still perform lower income work, they are not disabled under SSDI. Likewise, a person who worked in labor, such as construction or manufacturing, may not be disabled if they are still capable of performing less demanding jobs.
SSDI also does not consider whether jobs are available or if an individual may or may not be hired for a job. The SSA only evaluates whether an individual could perform the functions of a job that exists.
The SSA considers problems finding employment to be addressed by unemployment insurance. But, to that end, applying for both unemployment and SSDI will usually have detrimental effects on the SSDI application. The SSA sees the receipt of both benefits as generally incompatible (with exceptions).
The SSDI Application Process
Individuals may apply for SSDI on the SSA’s website or at a Social Security office. A state agency will evaluate the application, review medical records and determine if the claimant is disabled under SSA’s rules. This usually takes three to six months with a 34 percent award rate.
If denied, a claimant can request reconsideration by the state agency. This essentially repeats the process, with a 13 percent approval rate.
If denied again, the claimant may request a hearing before an administrative law judge. There is a nine- to 27-month wait from hearing request to hearing with a national average wait of 17.3 months. The ALJ’s decision takes about another 60-90 days and ALJs awarded 47 percent of cases last year.
There is one more level of appeal within SSA – the Appeals Council – but the success rate is only 10 percent. After that, a claimant must file a civil case in federal court.
Obviously, it is a long process. This wait has a huge impact on the claimants. Waiting 30 months to get a payment is not uncommon. The SSA makes retroactive payments in a lump sum, but that is often cold comfort for claimants. The average wait time for all claimants is about 15 months before they receive a payment.
When Awarded SSDI
Disabled claimants receive an average monthly benefit of about $1300. There is a five-to-six month elimination period at the beginning of the period of disability.[The SSA provides annul adjustments for cost of living.
Two years after the end of the claimant’s elimination period, they will begin receiving Medicare.
SSDI certainly has some warts, but overall American workers benefit tremendously from this program.