Social Security benefits are most often used to help retirees cover the costs. But the Social Security Administration (SSA) also has disability benefits available to those who meet certain strict requirements.
In this context, a disabled person is someone who has been medically incapacitated for work for at least one year or who has been diagnosed with a medical condition resulting in death. To be eligible for disability benefits, you must have worked for a certain period of time before you are declared incapacitated for work. A medical provider must also prove that your disability exists.
Let’s run through some of the most frequently asked questions about disability benefits.
What is the maximum social security disability benefit?
In 2022, the maximum disability benefit you can receive is $3,345 per month, up from $3,148 per month in 2021. This is the same as the maximum amount available to those who receive retirement benefits at full retirement age.
Realistically, most people approved for disability claims collect monthly payments in the $1,000 to $1,500 range. While it is possible to receive more, you must have been on a relatively high earner before becoming incapacitated because you would have paid more to the system to begin with.
Remember that the Social Security system works much like an insurance company: you pay into the system through payroll taxes over the course of your career. Then you will receive a benefit at a later date – when you retire or when you become incapacitated for work.
What conditions are considered a disability?
Many medical conditions are considered disabilities to the extent that they prevent you from performing work-related tasks effectively and are expected to remain severe for the foreseeable future.
In other words, the SSA considers you disabled if your medical condition “significantly limits” your ability to complete work-related activities, such as lifting, standing, walking, sitting, or remembering.
Medical conditions that may be considered disabling include:
- Musculoskeletal Disorders
- Sensory and speech disorders
- Respiratory Disorders
- Digestive Disorders
- Genitourinary Disorders
- Hematologic Disorders
- Skin conditions
- Endocrine Disorders
- Congenital disorders that affect multiple body systems
- Neurological disorders
- Mental illness
- Immune System Disorders
While there are many different medical conditions that could be considered disabling from the perspective of the SSA, your disability must affect your ability to work productively — and for a period of time — in order for your claim to be considered.
Are there other benefits associated with Social Security disability?
The main added benefit that comes with an approved disability claim is that after 24 months you are automatically eligible for health care coverage through Medicare. You normally don’t qualify for Medicare until age 65, but those who receive Social Security Disability Insurance (SSDI) are exempt from this requirement. If you are disabled long before your SSDI claim is approved, you may be able to receive a retroactive credit for the 24-month waiting period to qualify for Medicare.
The SSA will conduct periodic reviews to ensure that your disability persists and that all coverages and benefits are legitimate. Your Medicare coverage ends when you can return to work in the future, but the SSA offers a variety of work resources, called work incentives, to those who have recovered from their condition or are able to work in certain circumstances.
Can you work if you are incapacitated for work?
The SSA has specific rules regarding your ability to work while you are disabled, although it should be noted that people on SSDI are initially approved because they are truly unable to work for a variety of reasons.
Since many (if not most) people with disabilities would rather work than receive benefits, the SSA allows a nine-month trial period to determine if your earnings are significant. A “trial month” is any month in which income exceeds $970, and the trial period continues until you have nine cumulative trial months within a 60-month period.
After your trial period, your benefits will stop if Social Security deems your earnings significant. In 2022, Social Security considers your earnings to be significant if you earn more than $1,350 a month (or $2,260 if you’re blind) in the next 36 months. At that income level, you are considered to be sufficiently able to operate profitably and you will no longer receive cash payments. This is sometimes referred to as “substantial profitable activity” or SGA.
Remember, if you decide to return to work — or if your medical condition has improved — you must notify the SSA. While you can earn minimal income while receiving SSDI payments, earning more than the $970 monthly threshold will lead to a more thorough assessment of your circumstances.
Are disability benefits taxable?
Social Security Disability Benefits be able to be taxable. The rules are the same as for standard Social Security retirement benefits. The answer depends on your provisional (or “combined”) income, which is calculated as:
Provisional income = adjusted gross income (AGI) + tax-free interest + half of SSDI benefits
If you are single and your provisional income is less than $25,000, you will not pay tax on your SSDI distributions. If your provisional income is between $25,000 and $34,000, you will pay tax on half (50%) of your distributions. And if your provisional income is over $34,000, you’ll pay taxes on up to 85% of your distributions.
If you file a joint return and your provisional income is less than $32,000, you will not pay tax on your SSDI distributions. If your provisional income is between $32,000 and $44,000, you will pay tax on half (50%) of your distributions. And if your provisional income exceeds $44,000, you’ll pay taxes on up to 85% of your distributions.
While the SSA doesn’t make this calculation easy for anyone, it’s important to know where you stand when it comes to paying taxes after receiving any amount of disability income.
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Social security disability benefits play an important role
Social Security disability benefits are a critical part of the SSA’s operational activities and provide an essential financial foundation for those unable to work. Having a disability can be both financially and emotionally draining, so it is imperative that a safety net exists to support those who are unable to earn on their own.
If you live with a disability, consult a medical professional to determine if your circumstances necessitate SSDI payments. Don’t be afraid to ask questions if you’re not sure.
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