Unexpected disability, whether through injury or illness, can wreak havoc on most family’s finances. The financial toll isn’t limited to the disabled individual’s lost wages (which alone can be a crippling hit for most middle class families where a breadwinner is the one afflicted). The costs can even to friends and family members of the disabled.
Social Security Disability Insurance
Social Security Disability Insurance, or SSDI, is designed to be a very low-level, subsistence-level safety net for individuals who are faced with severe disabilities. Benefit amounts are pegged to the recipients’ age, historic income and the amounts they have personally paid into the Social Security system via payroll taxes.
The average SSDI payments are around $1,500 a month, but for those with a higher income that number will be higher.
How do you qualify?
That said, SSDI is notoriously difficult to qualify for. This is largely because the SSDI program only pays benefits in the event of “total disability.” Unlike other federal agencies like the Veterans Administration, SSDI program does not pay partial disability benefits. So while the Veterans Administration may pay reduced benefits to veterans with service-connected disabilities of 20, 30 or 50 percent, SSDI only pays for 100 percent disability.
To qualify for benefits, you must be able to prove to Social Security officials that you can no longer do work you were doing before, you cannot qualify for any other meaningful work because of your medical condition, disability must be total, and expected to persist for more than one year, or to result in your death
The application procedures are daunting, generally requiring substantial documentation, multiple visits with physicians and allied health professionals, and a lot of red tape.
On average, it takes nearly a year from the time an individual begins the benefits application process. Furthermore, the vast majority of applicants fail to qualify for SSDI benefits on the first application. Only about 28 percent of applicants are approved the first time through.
Benefits
In addition to benefits offered directly to the disabled individual, Social Security Disability Insurance also provides a number of ancillary benefits for family members and caregivers. Benefits may be paid to the following supporters or other family members:
- Your spouse
- Your divorced spouse
- Your children
- A disabled child and/or
- An adult child disabled before reaching 22 years of age.
If you qualify for SSDI benefits, each family member may be eligible for a monthly benefit of up to 50 percent of your disability rate, subject to an overall family cap of between 150 to 180 percent of your disability benefit.
Our Recommendation
For these reasons, and because of the relatively low level of benefits available, we generally do not recommend that physicians, dentists and other professionals rely on Social Security Disability Benefits as their sole safety net and source of income security in the event of disability. With maximum available benefits representing just a fraction of the average earnings of a mid-career physician – and with fewer than one-third of applicants qualifying for benefits in any case, SSDI simply does not provide enough protection for professionals like physicians and dentists to provide for their families.
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