Disability is defined by the Social Security Administration (SSA) as the inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of no less than 12 months. A claimant is responsible for proving that they are disabled and unable to work for at least 12 months. You cannot allege you are unable to work, but must prove it by submitting medically acceptable evidence to the SSA. The SSA oversees two federal programs designed to help those unable able to sustain work due to long lasting or permanent disabilities: The Social Security Disability Insurance (SSDI) program, and the Supplemental Security Income (SSI) program.
If you are disabled from performing substantial employment, you may be eligible for Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) benefits.
Differences between SSDI and SSI:
Social Security Disability Insurance (SSDI) is the program for those who have paid into the Social Security system. It is a form of insurance for those who were employed, and while working, they contributed to this fund through payroll deductions. Supplemental Security Income (SSI) is the program for those individuals with limited resources who have become disabled. It is a needs based program. There are work requirements and quarters of coverage necessary for SSDI, but not for SSI. There are asset and resource limits for SSI, but not for SSDI.
Supplemental Security Income (SSI) benefits can be awarded to persons with low income and who are disabled. In addition, SSI children’s disability benefits can be awarded to children 18 years old and younger who are disabled and whose parents or guardians have low income and very little resources.
Social Security Disability Insurance (SSDI) benefits can be awarded to disabled persons who have regularly held a job and have a documented work history. In most cases, a person can be eligible for SSDI benefits if they have been employed five out of the last ten years.
Advantages with entitlement to Social Security Disability Insurance (SSDI) benefits:
1. Cost of Living Raises
Social Security often pays yearly cost of living raises that are yours to keep. Also, if you receive Long Term Disability benefits (LTD) through your employer, the yearly cost of living raises will not offset your LTD benefit. This means you will receive more money per month even though your monthly LTD benefit will be reduced by the amount of the initial Social Security monthly amount.
2. Increased Social Security Retirement Benefits
Entitlement to Social Security disability will “freeze” your earnings record and exclude those disabled, non-working years so you can receive a higher Social Security retirement benefit at age 65. If you are receiving LTD benefits, for every year you receive LTD benefits and do not collect Social Security disability, zero (0) earnings are factored in to your Social Security record. This can substantially lower your future Social Security retirement benefits. As a result, by “freezing” your earnings record through entitlement to Social Security disability benefits, you do not put your retirement benefits at risk if you become disabled.
3. Health Insurance through Medicare Entitlement
Twenty-four (24) months after entitlement to Social Security disability benefits, you can become entitled to Medicare benefits. This inexpensive health insurance includes Part A hospital insurance and Part B medical benefits regardless of age.
4. Tax Advantages
The majority of Social Security recipients receive their benefits tax free. If you currently pay taxes on your LTD benefits, you may realize tax savings if you receive Social Security disability benefits.
5. Trial Work Period
In most cases, entitlement to Social Security disability benefits also entitles you to a trial work period, which allows you to work for up to nine (9) months while you still receive your full Social Security disability benefit.