When your stream of income dries up because you have a disability and can't work, you may be able to get disability insurance benefits from the Social Security Administration (SSA).
Applying for Social Security Disability Insurance (SSDI) benefits takes time and effort, but if you get approved, the payoff is worth it.
SSDI provides income replacement for people who have paid Social Security taxes for a total of five years within the past 10 years but haven't been able to work for at least a year because of a disability. Your medical condition must meet SSA's definition of a disability that is preventing you from earning above the level of substantial gainful activity (SGA), which is the ability to perform work for pay or profit. The 2009 SGA amount is $940 per month and $1,570 per month for a visual disability. The SGA amount will increase in 2010 to $1,000 per month, and $1,640 respectively.
How SSA Calculates Cash Benefits
When you were working, you paid Social Security (FICA) taxes. SSA divides up the years you worked into quarters. Every quarter in your life that you worked contributed to your SSDI benefit, so, your monthly SSDI cash benefit is based on your lifetime average earnings. It is the same formula used to calculate retirement benefits.
Other factors do affect the amount of your monthly disability benefit, such as if you are receiving Workers' Compensation or other public disability payments. If you are receiving these benefits, your monthly SSDI benefit will be reduced so that your total disability benefits do not exceed 80 percent of the average current earnings made before your disability. Other private income sources, such as a pension, are not considered when factoring the amount of your monthly cash benefit.
How much could you get a month? Here's some estimated figures based on annual earnings prior to becoming disabled:
Annual Earnings Estimated Range of Monthly Cash Benefit
$25,000 $878 to $1,068
$50,000 $1,329 to $1,519
$75,000 $1,782 to $1,972
$100,000 $2,078 to $2,268
When to Expect Steady Benefits
Once you get through SSA's approval process and are deemed eligible for benefits, you must wait a mandatory five full months before receiving your first benefit payment. You will also be awarded a retroactive lump sum representing the period of time it took to get through the application process. Disability benefits continue for as long as your medical condition doesn't improve and you are unable to work.
When you reach retirement age, your disability benefit automatically transfers into your Social Security retirement benefit and the amount stays the same. There is nothing you need to do for this transfer to occur.
Apply to Get the SSDI Benefits You Deserve
If you believe you qualify for Social Security Disability Insurance benefits, get the application process started now, because it can take months to reach final approval.
You can apply online at the SSA Web site, or get help from a Social Security Disability Advocate or Attorney.