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Should I apply for Social Security Disability Insurance (SSDI)?
This free disability insurance is tailored towards people with low income and long-term disabilities.
If you’re out of work because of a disability, consider applying for Social Security Disability Insurance. If you qualify and can get through the long and complicated application process, this free program can provide critical income while you’re out of work.
What is Social Security Disability Insurance?
Social Security Disability Insurance (SSDI) is a government program that pays out a monthly check if you’re disabled and meet the requirements. This federally-run disability insurance program is designed to help people who become disabled and can’t afford to buy a private disability insurance policy.
SSDI payouts are similar to private or group disability insurance programs. Your monthly check is based on a percentage of your prior income. The maximum anyone can receive is set at $2,788 a month, compared to the $10,000 maximum typically seen with private disability insurance.
Is Social Security Disability Insurance (SSDI) the same thing as federal disability insurance?
SSDI is the only type of federal disability insurance. Some states also offer state-run disability insurance. Social Security is a federal program that’s designed to offer social benefits. Social Security Disability Insurance is only one aspect of the Social Security administration, along with retirement and survivor benefits.
How do I qualify for Social Security Disability Insurance?
The Social Security Administration is more strict than private disability insurance in its definition of disability and its work requirements. Only about a third of people who apply are approved to be on SSDI, according to government statistics.
The main qualification factor for SSDI is your complete inability to work. If you’re able to work or get a part-time job, you’ll lose your eligibility to receive SSDI.
The government’s definition of disability is based on five factors that help determine eligibility for SSDI:
- Ability to work. If you’re completely unable to work, you’ll likely move to the next step in the process. If you still have some income, SSDI will check if you’re earning less than $1,180 a month to determine eligibility.
- Length of your disability. You can’t receive SSDI unless your disability is expected to prevent you from working for at least 12 months.
- Severity of disability. The federal government has a list of disabilities that it considers severe enough to qualify for SSDI. If your disability is on the list, then you should be eligible to receive SSDI.
- Ability to work as before. If your disability isn’t listed, then the SSA will determine if your condition prevents you from working to capacity in the same previous job.
- Ability to do any work. If the federal government determines that your disability prevents you from doing your prior job, it will look at your work history and skills to see if you’re able to do another type of work.
What do I need to apply for SSDI?
In order to qualify for SSDI, you’ll need to check these boxes:
- Be an American citizen or legal resident and at least 18 years old
- Proof that your disability is expected to last a minimum of one year
- Proof of prior employment
- A history of paying Social Security taxes
- Proof that you’re not earning your prior income because of your disability
Is Social Security Disability Insurance worth it?
If you meet the strict requirements, it’s worth applying. Apply as soon as possible since the application process and wait times for approval are long.
However, SSDI is designed to help people with long term disabilities who can’t work and don’t have much money. So if you already know you don’t meet the strict requirements, it’s probably better to skip the tedious and time-consuming process.
Pros and cons of Social Security disability insurance
- Almost anyone can apply. Basic eligibility is open to anyone over 18 years old, and mostly based on the severity of your disability.
- Medicare access. If you’re on SSDI, then you’ll be eligible for Medicare for 24 months following the date of your disability.
- Can be used with other disability insurance. Being on SSDI doesn’t mean you have to forfeit other disability insurance payments you receive. If you qualify for SSDI and still have another policy, you can collect from both.
- Long-term disability only. SSDI is not a short-term disability plan. You’ll have to prove that you can’t work for at least 12 months in order to be eligible.
- Long waiting period. From the day that you apply for SSDI, it could be months until you receive benefits if you’re approved. You can file an appeal if you’re denied, but prepare for a lengthy period of having no SSDI income.
- Strict policy on working. If you collect SSDI, you won’t be able to look for employment, even part-time. Once you’re able to work at any capacity, you’ll lose your SSDI benefits.
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Alternatives to Social Security Disability Insurance
If you’re ineligible for SSDI or prefer to look for other solutions, consider these options for income. If you don’t have a policy and you’re already disabled, your current disability would likely be excluded from coverage, meaning you’ll have to buy a disability policy before you become disabled.
- Short-term disability insurance. SSDI doesn’t cover short-term disabilities, which means you’ll have to buy your own or opt into coverage through your employer if it’s offered.
- Private long-term disability insurance. Standard disability insurance through a private insurance company offers a higher monthly payout amount and has a more flexible definition of disability.
- Short-term savings. If you’re lucky enough to have a small amount of savings, you could use that if you expect your disability to last for just a couple of months. Alternatively, consider cutting out an unnecessary monthly expense to help with your living expenses.
- Temporary employment. Consider looking for employment in a job that you can do with your disability. For example, if you’re stuck at home but are mentally capable of working, you could consider working remotely online.
- Personal loan. If you’re confident you’ll be able to return to work in a few months or will get a disability payout soon, you could take out a small personal loan to cover expenses in the short term. Make sure you have a plan for repaying the loan, otherwise it could become a big burden that’s compounded by your disability.
Social Security Disability Insurance is a federal insurance program that’s free and provides valuable income at a time when you’re not able to work. However, it’s only designed for long-term disabilities and the application process is long and complicated.
Before applying for SSDI, it might be worth checking out your other short-term and long-term disability options.
Common questions about Social Security disability insurance
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