The reality of living with a handicap may be terrifying. It has the potential to sap your strength and leave an emotional scar. If you are unable to work due to a handicap, you may find it challenging to pay for basic living costs.
The Social Security Administration (SSA) offers programs, including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), that may help in such a time of need.
However, the SSA’s complex processes and technicalities make it very difficult to become eligible for SSI or SSDI compensation. If you have a long enough work history and meet the other requirements for SSDI benefits, you may apply for them and get the money you need if you become disabled.
However, SSDI payments are determined by work credits and the 5-year rule. Understanding these ideas can help you decide if you are eligible for SSDI benefits.
What is Social Security Disability Insurance (SSDI)?
The goal of the Social Security Disability Insurance (SSDI) program is to give financial support to people who are unable to work due to medically-determined physical or mental impairment(s) that have lasted at least 12 months, are likely to continue at least 12 months, or will result in death.
The SSA manages the federal SSDI disability insurance program. Earnings from work or self-employment taxed into the Social Security system count toward qualification for SSDI payments from the Social Security Administration (SSA).
Disability Insurance Eligibility Requirements
There are three requirements that must be met in order to qualify for Social Security Disability Insurance payments.
- You must have a medical condition(s) that fits the criteria set out by the Social Security Administration to qualify as a disability.
- For the next 12 months, your impairment prevents you from working.
- To be eligible for SSDI payments under SSA guidelines, you must have worked long enough and paid enough Social Security taxes.
Monthly SSDI payments are determined by a number of variables, including your work history. Your lifetime earnings are the basis for determining them. The amount of SSDI benefits you get depends on how much you earned and paid into Social Security.
What is the “5-Year Rule” for Social Security Disability?
Income earned each year qualifies workers for SSDI credits. The maximum number of credits an employee may earn in a year is 4.
To be eligible for SSDI payments, you must have worked for 5 of the 10 years prior to your disability, since this is the minimum number of years required to earn 20 work credits. This is known as the “5-year rule” for Social Security disability benefits.
The minimum yearly salary at which you’ll get one credit varies somewhat from year to year, in line with the general trend of rising wages.
Starting in 2023, for every $1,640 you earn, you’ll get one credit. No matter how many jobs you have or how long you go without being paid, the credits you’ve already earned will always be there.
To receive SSDI payments, most applicants must have accrued 40 credits of employment history. The minimum required number of labor credits varies by age and employment history of the candidate. The criteria is that at least 20 of those labor credits have to have been accumulated in the decade before your impairment.
Work criteria are less strict for younger employees than for older workers, but if you haven’t worked in the last 10 years, you probably won’t be eligible for SSDI.
When Work Credits Are Insufficient, What Can Be Done?
If you do not have enough work credits or if you do not meet the Social Security Disability 5-year criteria, you will not be eligible for SSDI payments. You may still be eligible for Social Security payments, however, under the agency’s Supplemental Security Income (SSI) program. Applicants for Supplemental Security Income (SSI) must be 65 or older, blind, handicapped, or both.
To qualify for SSI, you do not need to have worked in the past. In contrast to Social Security Disability Insurance, which is a government insurance program, SSI is a means-tested program run by the Social Security Administration that assists handicapped people who lack adequate income or resources to satisfy their basic needs.
In addition, you cannot be receiving any other financial benefits or payments and must fall below the SSA-mandated income and resource limits in order to qualify for SSI.
Money in the bank, life insurance, property, automobiles, and other forms of personal wealth are all off-limits. Everything that may be bartered for necessities like clothing or a roof over one’s head is included. To this end, a single person is allowed $2,000 in assets, while a married couple is allowed $3,000 in assets.
However, it is incredibly challenging for people to comprehend whether they qualify for the needs-based program due to the various laws and procedures involved in the process of applying for SSI benefits. This may make applying for SSI more difficult than it has to be.
Prerequisites for Filing for Disability Benefits from Social Security
Documents will seldom be required by the SSA in 2023. The Social Security Administration obtains all medical data directly from the source; most information can be checked online. Personal records have less weight than those sent directly from a healthcare practitioner.
You shouldn’t wait for paperwork or postpone submitting an application because of it. It’s a great practice to apply as promptly and precisely as possible.
Information required for your application includes:
- Details about yourself such as your name, date of birth, birthplace, address, phone number, and Social Security number.
- Current and previous spouses’ full names, SSNs, and dates of birth or ages.
- Child(ren)’s full name(s) and date(s) of birth.
- The account and routing numbers for your bank if you choose direct deposit.
- Specifics about your current health situation include your diagnosis, any physicians you’ve seen, any tests you’ve done, and any medications you’re now taking.
- Identify a non-medical contact who is familiar with your medical history and can help you with your application by providing their name, address, and phone number.
- Please provide both your current and previous place of employment.
- If your income fluctuates widely or if you saw a considerable loss in income due to your health, you should provide pay stubs for the previous year.
Can You Get a Job If You’re Disabled?
Although obtaining Social Security disability benefits does not prevent you from working, it is important to understand how your earnings might affect your payments. There are various distinct levels, each with its own name. The data presented is accurate only for the year 2023.
You may make as much money as you like for the first nine months after starting benefits. These need not be consecutive months. Thankfully, a Trial Work Period (TWP) month is consumed by employment only if your income is more than $1,050.
Once your first TWP of nine months has expired, you will join an EPE. During these three years, you will not be eligible for benefits if your monthly income is greater than $1,470. But if your monthly gross income is less than $1,470, you are eligible for a benefit.
Your benefits will be terminated if you make too much money in a particular month after your three-year EPE expires. The Expedited Reinstatement (EXR) procedure is where you should reapply. This is meant to be faster than the original application, but it still may take a while.
Contact your local Social Security office and ask to talk to a claims expert or the Work Incentives Coordinator if you have any questions. Suppose you continue to work while receiving disability benefits. In that case, you must save any relevant pay stubs and promptly report your income to the appropriate local office to prevent receiving an incorrect amount.
Do You Need Individual Disability Coverage?
Private disability insurance is something that most individuals should look into. Check your estimated monthly benefit amount in your My Social Security Account on SSA.gov to see whether you qualify for this supplement.
You may not require a private disability insurance plan if your monthly benefits will cover your monthly expenditures and you have enough resources to cover your monthly expenses for at least six months while you wait for your gifts to begin.
Others should save enough to bridge the difference between their monthly Social Security benefit and living expenses.
If you’re healthy and don’t believe you need private disability insurance, reevaluate. The Social Security Administration estimates that 24% of today’s 20-year-olds will become incapacitated before they reach age 67, and yet 65% of private sector employees do not have access to long-term disability insurance.
The Council for Disability Awareness estimates that each year 5% of American employees will become temporarily disabled for six months or less. The United States Centers for Disease Control and Prevention (CDC) estimate that 26% of Americans are disabled somehow.
In most cases, the duration of incapacity covered by short-term insurance is between three and six months. Long-term disability insurance, as the name implies, offers financial support over a longer time frame. Plans for long-term disability may provide coverage for anywhere from a few years through your retirement years.