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The nuances of Social Security disability that most people don't understand

This gets complicated in a hurry, but let's see what we can do here.

Basically, there are two kinds of disability...and I think everyone knows this that would ever read this, because why else would you be reading this?

But, maybe we can flush out some of the nuances of each.

Let's start with SSDI:

Social Security Disability Insurance (SSDI) is part of Retirement and Survivor's Benefits under Tile II of the Social Security Act. It is for people that have paid into the Social Security system and have earned enough work credits to qualify. A person earns work credits either through paying his or her taxes each year, or through taxes deducted from their paycheck. You cannot lose retirement benefits if you have paid taxes into the system, but you can lose disability benefits. A person must have worked at least 5 out of the last 10 years to maintain these benefits. This is just like private insurance, in that if you don't pay for it, you lose it. The only difference is that the government allows you to maintain these benefits as long as you work the required amount over a 10 year period.

Where the nuance really comes in, is when people do not understand how that expiration date either allows them to qualify or disqualifies them for SSDI. A person can actually lose his or her benefits, but still be able to qualify for SSDI as well.

Let me show you an example:

Let's say that Cathy becomes sick and does not immediately file for disability, but she stops working. She waits a couple of years and then files for disability. Let's say our year is 2021, and because she stopped working a while ago, her disability benefits expired September of 2020. Now, at first bluish, it would seem as though she would be ineligible to file for SSDI. But, since she has not worked for the last couple of years and if she has been receiving treatment for her condition, then we could set her onset date (the date of her disability) prior to September 2020. We could say, for example, Cathy became disabled in August of 2020, and she would still be eligible for SSDI benefits if she were approved.

So, what you really need to know when filing for SSDI, is whether your Date Last Insured (DLI) is still in the future from the date of your filing or it is in the past. If it's in the future, you're golden and you can go ahead and file. If it is in the past, you may still be able to file for SSDI, but just so long as it is not too far in the past. The usual rule is that SSA will only look back two years prior. So, if you do happen to run out of work credits, just make sure it hasn't been too long, and you have the medical records to prove you were disabled at that time.

Now, let's talk about SSI:

Supplemental Security Income (SSI) is basically welfare. You did not earn it by paying into the disability system. It is intended to help those that are below the U.S. poverty line. Further, it allows a person to participate in the Medicaid system and receive medical treatment. Not that you would care, but SSI actually falls under Title 16 of the Social Security Act (just in case you needed that little extra information). But, if you're ever in an SSA office and you hear "Title 16 benefits" -now you know!

But, here is the nuance with SSI. There are asset limits, as well as income limits (with a number of exceptions).

So, let's look at a case to help us further understand.

We'll still use Cathy. She stopped working as she did before. But, this time her DLI is more than 2 years in the past. But now, we know that Cathy is married and her husband has been supporting her and the family the entire time she did not work. In fact, they have a home and two cars and her husband makes $60,000 a year.

Cathy is not only going to be disqualified from SSDI benefits but SSI as well. She has more than one car, her home is exempt from her allowable assets, but her husband earns too much for the family to disqualify her as well. In essence, Cathy is going to be completely disqualified from the disability system all together.

It sucks, but those are just some of the rules. I can't tell you how many people call our office looking to file for disability benefits, but at times do not qualify. The moral of the story is if you have gaps in your work history, it's really important to know these nuances.

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