Social Security Disability Insurance Benefits (SSDI) And Eligibility 2022

Disability Benefits - SSDI Oct 16, 2022
Social Security Disability Insurance
Social Security Disability Insurance [Photo Credit: Envato (Licensed)]

Social Security Disability Insurance (SSDI) provides monthly payments to employees who are unable to work because of a severe disease or disability that is likely to persist for at least a year or result in death within a year. 

Social Security is a component of the program that provides retirement benefits to the great majority of older Americans. Benefits are provided to the handicapped worker and his or her dependant family members depending on the disabled person’s historical wages. A handicapped worker must have worked in occupations covered by Social Security in order to qualify. In July 2017, 8.8 million employees with disabilities received benefits.

What Is the Amount of Disability Benefits?

A formula links the disability benefit to the worker’s earnings prior to becoming disabled. The following table compares disability insurance benefits to prior earnings for a 55-year-old worker who became eligible for benefits in 2014.

Before disability earnings (lifetime average*) Annual DI Benefit Percent of Earnings Replaced

$20,000 $12,288 61%

$40,000 $18,612 47%

$60,000 $24,948 42%

Taxable limit ($127,200 in 2017) $33,672 26%

*Average indexed earnings

In June 2017, the average benefit provided to handicapped employees was $1,172 per month or around $14,060 per year.

Who Should Bear the Cost of Disablement Insurance?

Individuals and businesses alike pay into the DI system via their Social Security tax contributions. The highest taxable salary for Social Security purposes in 2017 is $127,200, and both workers and employers are responsible for paying 6.2% of that amount. Every year, the ceiling is adjusted upward to reflect increases in median salary. 

Disability insurance takes up 1.185% of the 6.2%, while retirement and survivor benefits take up 5.015 %. At 2.37 percent of salary, the tax on disability insurance paid jointly by workers and employers is higher than the tax on retirement and survivor benefits at 10.03 percent, bringing the total tax on retirement and surviving benefits to 12.4%.

How Much Does Participation In The DI Program Typically Cost?

Most of the $160 billion contributed to the social security disability insurance trust fund in 2016 came from the 1.185 percent pay tax paid by both workers and employers. In 2016, the social security Disability Insurance (DI) trust fund paid out a total of $146 billion, the majority to disabled workers and their families. 

This means that income exceeded expenditures by $14 billion. A total of $46 billion was held in the disability insurance trust fund as of the year-end of 2016. The DI budget only went toward paying benefits, with just 1.9% going into administration.

Who Is Eligible To Receive Disability Insurance Payments?

First, one must overcome a substantial challenge in order to qualify for Social Security disability compensation. To be eligible for Social Security disability benefits, an individual must “meet the medical definition of a disability,” which is “a physical or mental impairment that has lasted or is projected to last for at least 12 months or is predicted to result in death.” 

Because of the severeness of the impairment or combination of impairments, the applicant must be unable to engage in any other significant gainful activity in the national economy (Section 223(d) of the Social Security Act).

When a person’s earnings are over a specific threshold, they are regarded to be involved in substantial gainful activity. In 2017, a non-blind worker with a monthly income of more than $1,170 will no longer be eligible for disabled worker payments. The sum is revised annually to account for changes in the cost of living and the national median wage. For example, if you need a wheelchair or an attendant because of your job, such costs might cut into your paycheck. 

After subtracting work-related costs, a person’s net monthly earnings must be less than $1,170 before they may qualify for financial aid. In 2017, a blind person has to make at least $1,950 per month in order to be recognized to have a substantially gainful occupation.

According to federal law, the Social Security Administration must defer to state authorities when deciding whether or not an applicant is incapacitated due to medical and/or vocational reasons. Many factors are considered while selecting a candidate, including but not limited to age, work history, education, and health.

At least five months must have passed from the onset of the incapacity to work before compensation is due. If someone experienced a severe injury in January and satisfied Social Security’s disability rules, they would begin receiving disability benefits in July.

Generally Speaking, What Kind Of Impairments Are Most Often Experienced By Those Who Get DI?

Multiple health issues are common among recipients. Roughly a third, or 1.6 million, of the nearly 9 million people receiving disabled worker benefits at the end of 2014 had a primary diagnosis of mental disability. A third of the handicapped employees were dealing with musculoskeletal ailments. This includes illnesses including arthritis, back injuries, and connective tissue disorders. 

Recipients above the age of 50 disproportionately suffered from these ailments. Conditions affecting the circulatory system accounted for around 8% of all primary diagnoses. Nine percent more reported problems with their neurological systems or other senses. Those in the other 20% have conditions affecting the respiratory system, other organs, or tissues. 

These conditions include traumas, malignancies, infectious illnesses, metabolic and endocrine disorders like diabetes, and more. In addition, many people who get aid from the government have terminal illnesses; almost one-fifth of males and nearly one-sixth of women who enroll in the program will die within five years.

Characteristics Of Workers Receiving Disability Benefits

There is a high probability of poverty or near poverty for disabled worker recipients. Disabled employees as a whole have a higher poverty rate than non-disabled workers (15 percent vs. 30 percent). In addition, 82% of DI claimants and 37% of handicapped worker beneficiaries get all or almost all of their income from Social Security.

Also, the average age of an SSDI beneficiary in 2015 was 54, making them an already-presumed older demographic. Seventy-four percent are in their 50s, and another third are 60+.

Disability employees are disproportionately more likely to be black and to have lower levels of education than the general adult population; over half of disabled workers have not completed high school.

Health Care Coverage for Individuals with Disabilities

After two years of receiving Social Security disability insurance (DI), beneficiaries become eligible for Medicare. Individuals receiving SSI are often immediately eligible for Medicaid. Individual health insurance plans are likely to be costly or unavailable to persons receiving disability payments, making health coverage crucial. 

According to the paper Balancing Security and Opportunity: The Challenge of Income Disability Policy, “many persons with chronic health issues or disabilities are in danger of incurring very high healthcare expenses. Even when they do have private coverage, it often does not cover the full spectrum of treatments and long-term assistance they need. Current gaps in health insurance coverage for persons with impairments restrict their employment opportunities in a number of ways.

Costs of Disability Insurance in the United States and Europe

Spending on social security disability insurance benefits in the United States is low when compared to other developed countries. According to statistics from the Organization for Economic Cooperation and Development. Government expenditure on disability payments in 2013 amounted to 1.4% of GDP. The corresponding figures for Germany (1.3%), the United Kingdom (1.5%), Sweden (2.1%), and the Netherlands (2.8%) are as follows. 

These totals include both means-tested disability payouts and state social insurance programs (such as Social Security disability insurance in the United States) (such as Supplemental Security Income in the United States)

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