Social Security Disability was signed into law in 1956 by President Dwight Eisenhower as an amendment to the Social Security Act. It was a fiercely debated issue that filled the halls of Congress and the White House. What seems a common-sense public entitlement program was controversial and met with staunch opposition. Thankfully, wisdom defeated fear, and the Social Security Disability safety net is available to all who are disabled.
There is a lot of confusion surrounding Social Security Disability, it’s benefits, and it’s limit. Social Security Disability is a benefit reserved for those who are disabled. When most people receive payment for their work, a portion is paid out to Social Security to fund the program. It is easiest to view this payment as a fee for an insurance policy. Just as any insurance policy requires payments for coverage, so does Social Security Disability require payments to ensure coverage should the employee become disabled.
A few payments won’t make you eligible for Social Security Disability. Before the medical analysis of disability begins, Social Security works to decide whether the claimant has made enough payments into the program to eligible. These payments usually have to add up to the “40 Credits” standard. To meet this standard, the claimant must have worked five out of the last ten years from the onset of the disability and paid into the system consistently on a nearly full-time basis.
There are many benefits to Social Security Disability. The amount of the monthly payment will be dependant on the amount paid into the system. The maximum amount capable of being received is $3,000. Whatever amount an applicant receives will be paid till retirement, or medical improvement eliminates the disability.
Social Security Disability also comes with Medicare. Medicare provides health care coverage that is often better than many private insurance plans. Many who apply for Social Security Disability have very little wealth and therefore treat at clinics by doctors in situations that are less than ideal. Medicare opens almost every doctor’s door and provides not only more options for treatment but better treatment.
Social Security Disability, however, can be offset by certain forms of income. Funds attained from Worker’s Compensation, or State Disability payments will suffer offset from SSDI payments. There will not be any payments available from SSDI if the amounts received from Worker’s Compensation or State Disability are higher than the calculated value of SSDI. Other forms of income will not offset SSDI. Veteran’s Benefits, Pension Plans, Insurance payments are all capable of being received simultaneously with SSDI.
All hope is not lost if a claimant doesn’t meet the financial requirements to be eligible for Social Security Disability. For those who stayed home to raise kids, suffered prolonged periods of incarceration, or didn’t pay into Social Security, there is Supplemental Security Income (SSI).
SSI is not the same quality benefit as SSDI. The highest amount for an individual $931.72 in California. The amount is higher if the disabled has children or a disabled spouse. The benefit also does not come with Medicare, but rather is supplemented with MedicAid (Medical in California).
SSI is also a benefit that is subject to massive offsets. If a claimant is living rent-free in a home, Social Security will most likely subtract 1/3 of the receivable amount. If the claimant has relatives who provide funding, Social Security will deduct from the SSI payments. Social Security finds every possible way to subtract funds form this benefit.
SSI also has an “asset cap.” Not including one house and one car, A claimant cannot have more than $2000 in assets if single; $3000 if married. Social Security considers just about everything to be an asset, excluding the one house and one car. If a married couple has two cars, they will most likely exceed the maximum allowable asset cap. Stocks, Bonds, Life insurance policies will all be labeled assets, potentially leaving a claimant ineligible for SSI benefits.
A typical scenario is the SSI beneficiary who inherits a car from a deceased relative. The recipient doesn’t know this new asset has made him/her ineligible to receive benefits by thrusting him/her over the asset cap and Social Security isn’t immediately notified. Social Security finds out 10 years later about the car and declares an “overpayment.” An overpayment is Social Security demanding to be paid back the ten years of benefits paid in error due to the asset. Very often, this amount can exceed $100,000.
Whether it’s Social Security Disability or SSI, the benefits can be challenging to obtain and keep. The laws are thousands of pages long and convoluted. The best remedy to this problem is to hire an attorney.