Social Security Disability Benefits Basics
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. A 2015 study from the American Association of Retired Persons places the total cost of informal care at nearly half a billion dollars per year, according to reporting by The Simple Dollar.
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.
According to The Simple Dollar’s calculations, a 50 year old disabled individual who has paid taxes on income averaging $30,000 over the past ten years can qualify for as much as $2,248 per month in benefits, or $26,976 per year.
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.
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.
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.
For this reason, applying for Social Security disability benefits may be worth the effort in some cases. It’s generally worthwhile to consult with an attorney experienced in navigating disabled individuals through the process. But the best security for you and your family, by far, is the combination of your own savings and investments and a robust personally-owned disability insurance policy, or combination of policies, sufficient to meet your family’s income needs.
About Doctor Disability
At Doctor Disability Insurance, we understand that you have had to make sacrifices to get to where you are. We are committed to helping you protect your most valuable asset: your ability to earn an income.
Doctor Disability Insurance, Inc. is an innovative, one-stop service that makes disability insurance shopping quick, affordable, and easy to understand. Physicians save time and money by comparing plans and prices from multiple insurance companies. The site provides free quotes from leading names in the disability insurance industry along with friendly and knowledgeable customer support. The best values in the insurance industry are located in one place and are available any time doctors are ready, including late at night and on weekends.
Based in San Clemente, California, President and CEO Charles Krugh is a Certified Financial Planner with more than 15 years of experience working with people in the medical industry.
Call us toll free at 866-899-7318 to speak to one of our disability insurance professionals, or visit our website at www.doctordisability.com for a free disability insurance quote.