Understanding Social Security Disability Insurance and Medicare
Friday, March 15th, 2013
One of M&L Special Needs Planning’s favorite workshops is government benefits – specifically Understanding SSI/Medicaid & SSDI/Medicare. We decided to write about it in our blog. As it is a complicated subject, we broke up the topic in two parts. Last week we discussed Understanding Supplemental Security Income (SSI) & Medicaid, and this week, we will focus on Social Security Disability Insurance (SSDI) and Medicare.
SSDI – What is it?
SSDI (Social Security Disability Insurance) is one of the three entitlement programs under the Title II Act. SSDI is designed to provide income for people who are unable to engage in work by reason of any medically determinable physical or mental impairment, which can be expected to result in death or which has lasted or is expected to last for a continuous period of twelve months.
Another way to look at SSDI is, in essence, as a long term disability insurance program. This benefit is not intended for those experiencing short term disabilities. SSDI is an entitlement program. SSDI is not a welfare program, meaning there are no resource/asset limits. One gets SSDI if that person has worked and paid Social Security taxes (FICA) for a long enough time to be “insured”, and then becomes disabled enough to meet SSA’s disability criteria. The person gets SSDI off their own work record. Once a person becomes eligible, there is a five month waiting period before benefits begin.
SSDI Eligibility Requirements
In order to be eligible for SSDI, one must meet the definition of disability per Social Security and not be able to engage in substantial gainful activity (SGA). The definition of “gainful activity” is work, and to be considered “substantial”, gross earnings must be at least $1040 a month for 2013. For a blind person, gross earnings must be at least $1740 a month for 2013. It must also be on record that the applicant, or in some cases the applicant’s parents or deceased spouse, has worked long enough and paid enough Social Security taxes to the Social Security administration – this eligibility criterion is measured by two earnings tests, a “recent work” test and a “duration of work” test.
Disability Criteria: The Social Security administration uses a five step process to determine if the applicant qualifies as disabled. This process examines if the applicant is working, if the applicant’s condition is severe, if the applicant can still do the work that he or she did before the medical condition occurred, and whether or not the applicant can do any type of work. The Social Security administration also has a list of impairments that describes medical conditions so severe that they automatically qualify as disabled by law. Please click here for the list of impairments.
Earnings Tests: Once the applicant qualifies as disabled, the recent work test and duration of work tests are administered. The recent work test is based on age; according to the Social Security administration, the age of the applicant at the time of the disability determines how long the applicant needs to have worked in order to qualify. The duration of work test is meant to prove that the applicant worked under Social Security (and paid Social Security taxes) for long enough to qualify. SSDI eligibility is based on “work quarters”, or three month periods during which the applicant needs to have worked. Please click here to view the specific guidelines that the Social Security administration has outlined in regards to the duration of work and the recent work test.
In general, however, once the disability is determined, an applicant needs to have worked 20 quarters of coverage out of the last 40, or 5 out of the last 10 years. In order for a quarter to count, the applicant needs to have earned at least $1,160 in that three month period. Individuals younger than 24 need to have worked 6 quarters over three years, and those between the ages of 24 and 30 need credit for half the time for the period beginning with the quarter after you turned 21 and ending with the quarter you became disabled. I.E., if you are 29, you would need to work 4 of the 8 years between 21 and 29, ending in the quarter that you became disabled.
NOTE: For a full listing of the SSDI eligibility requirements, please click here. The Social Security Administration provides an Online Benefits Eligibility Screening Tool to help those determine which government benefits they may qualify for. Please click here to access this tool.
Social Security Disability Insurance (SSDI) is one of the three entitlement programs under the Title II Act. The other two programs are the Disabled Widow(er)s Benefit (DWB) and the Childhood Disability Benefits (CDB), previously known as Disability Adult Child (DAC), and
To receive DWB, one is a disabled widow or widower who is at least 50 years old and their deceased spouse paid Social Security taxes. To receive these benefits you must have been married for at least ten years. If you are divorced you may be able to received DWB off your ex-spouse’s work record.
Certain members of your family may qualify for benefits based on your work. They include:
- Your spouse, if he or she is age 62 or older;
- Your spouse, at any age if he or she is caring for a child of yours who is younger than age 16 or disabled;
- Your unmarried child, including an adopted child, or, in some cases, a stepchild or grandchild. The child must be younger than age 18 or younger than 19 if in elementary or secondary school full time; and
- Your unmarried child, age 18 or older, if he or she has a disability that started before age 22. (The child’s disability also must meet the definition of disability for adults.) This is a CDB/DAC benefit.
Social Security likes to confused the consumer, and the benefit to the family member may be labeled as Social Security Retirement, Social Security Disability Insurance (SSDI) or Survivor’s Benefits.
In order to received CDB/DAC, one must be 18 years or older, disabled before the age of 22, and have a parent who has paid Social Security taxes (FICA). A person receiving CDB/DAC is paid off their parent’s work record. For the benefit to occur, the parent is retired, disabled themselves, or deceased. Those who qualify for the CDB must meet the same disability criteria as adults applying for this benefit. There is no waiting period for those who qualify for CDB. In addition, if the person receiving CDB marries, they will lose their benefit.
SSDI and Medicare
A person receiving SSDI will become eligible for Medicare after he or she has been eligible for SSDI for two years, or 24 months. These months do not need to be consecutive. For more information on Medicare and the eligibility requirements please visit the federal Social Security website.
Other Important Facts about SSDI
- The monthly payment is based on the social security earnings of the insured worker on whose social security number the disability claim is filed. It can be fairly small, and allow the recipient to qualify for SSI, or it can be substantial.
- Checks are paid on the 3rd of the month for the month prior.
- There is a five month waiting period after the disability begins before a beneficiary begins receiving SSDI. Certain applicants can receive SSI during this waiting period. If the claim takes longer than 5 months to process, then SSDI benefits can be paid retroactively.
How can I apply for these benefits?
For many people, the process of applying for government benefits can be overwhelming, stressful, and confusing. The good news is that M&L Special Needs Planning can help with this process. If you would like to begin the process of applying for SSDI, please contact us! This is a complicated process and most applications are denied due to lack of documentation. You do not want your loved one to be denied for any government benefit. It is a hassle and sometimes can take years to fix. We have an excellent track record of helping families apply for benefits, and they become eligible the first time around.
Applications can also be completed in person by calling your local Social Security office (1-800-772-1213 for voice or 1-800-325-0778 for TTY) to make an appointment. SSDI benefits can also be applied for online. For more information, or to begin an online application, please visit the Social Security website.
If you would like to learn more about SSDI and Medicare, or SSI and Medicaid/Medical Assistance, we are hosting a free workshop Understanding SSI/Medicaid SSDI/Medicare on April 2nd at the TLC Treatment and Learning Center in Rockville, MD. Please click here to register for this free workshop.
Thanks for taking the time to read our blog today! We hope that we answered some of your questions and provided clarification regarding this topic. If you have any other questions, or would like to discuss this topic in more detail, please don’t hesitate to let us know – we are here to help.
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