Have you been considering applying for Social Security disability benefits? If so, then you are likely curious about the requirements to qualify and the income, asset amounts, and benefits that can be earned. It is important to understand all the details in order to make an informed decision on whether or not to apply. This article will provide an overview on understanding social security disability benefits, how to qualify, benefit amounts, Medicaid benefits, how long does the income benefit last, who qualifies, asset amounts and how to apply.

Qualifying for Social Security Disability Benefits

To qualify for social security disability benefits you must meet certain criteria. The first requirement is that you must have worked recently enough and paid into the system through payroll taxes. The SSA looks at an applicant’s earnings over the past 15 years to determine if they meet this requirement. The amount of time varies depending on your age when applying; however, most applicants must have worked five out of the last 10 years before becoming disabled. In addition, you must have a qualifying medical condition that prevents you from working full-time or part-time for at least one year. The condition must also be expected to last at least one year or result in death. You may also qualify if your medical condition meets the SSA's definition of "disability." This means that it significantly limits your ability to perform any type of job in the national economy. Lastly, there are certain asset limits which vary based on marital status and household size, so it is important to review these limits prior to applying for SSDI benefits. For individuals without dependents these limits are typically $2,000 while those with dependents can have up to $3,000 in assets before being deemed ineligible for SSDI Benefits. It is important to note that these asset limits do not include cash savings or investments but instead refer only to physical assets such as real estate and vehicles.

Benefit Amounts

Once an applicant is deemed eligible for Social Security disability benefits, they will receive a monthly payment from SSA based on their average earnings over their working life. In 2020, the average benefit is $1,258 per month with maximum payments of up to $2,861 per month depending on the individual's work history and wages earned prior to becoming disabled. In addition, some states offer Medicaid or other government programs that provide additional assistance such as food stamps or housing if you are approved for SSDI benefits.

How Long Does the Income Benefit Last?

The amount of time that you receive income from social security disability benefits depends on a few factors such as age when starting payments and duration of the disability period. The income benefit provided by Social Security disability benefits lasts until a recipient reaches full retirement age—which is currently 66 or 67 years old—or returns to work in some capacity. Additionally, if an individual passes away while receiving these benefits then their spouse may continue receiving them until they reach full retirement age as well. However it is important to note that once an individual reaches full retirement age they will no longer receive monthly payments from SSA but instead will begin receiving regular social security retirement payments based on their work history and earnings prior to becoming disabled.

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How To Apply

Applying for social security disability can be done online at www.ssa.gov/applyfordisability, by telephone at 800-772-1213, or by visiting a local Social Security office. When applying online it is important to have all necessary documents readily available including proof of identity, work history, medical records, financial information, etc. After applying online, it typically takes 3-5 months before a determination is made regarding eligibility. Additionally, applicants should keep track of their earnings history as this will be used when determining benefit amounts.    

Understanding Social Security Disability Benefits can seem daunting but with proper research and assistance it can become easier over time. By gathering all necessary documents prior to applying, researching requirements related to eligibility, understanding benefit amounts, maintaining an updated earnings history, staying aware of asset restrictions, and knowing who qualifies; applicants should be able to successfully navigate this process. With this knowledge potential applicants should feel more confident when deciding whether they should pursue this option further.​​​​​​​​​​​​​​​​​​​​​

At Provident Financial Planning, our holistic planning process conducted by our in-house CFP®, JD, CPA team allows us to understand all aspects of your financial details. Contact Provident Financial Planning for a free financial review.

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Blessings,

Paul S. Michel, CFP®

paul@providentfp.com