Purpose of Social Security Disability
Social Security Disability Insurance, SSDI — is the major income replacement program in the public sector for people with disabilities. In order to be awarded Social Security Disability benefits, and individual must be “insured” for benefits. Workers pay into an insurance fund and if they become disabled, they can collect a benefit. It was originally enacted in 1935. However, it was not recognizable in its current form until the mid-1950’s.
Social Security Disability vs. Supplemental Security Income
The SSA administers, in addition to the SSA retirement system, two separate programs to provide disability benefits. The programs are Social Security Disability (SSD) and Supplemental Security Income (SSI). The broad purpose of these programs is to provide qualified individuals with financial payments, and ultimately, medical coverage. The programs are similar in terms of the degree of proof required to establish entitlement, as set forth in greater detail below. However, the programs are different in terms of what must be shown in order to qualify for coverage.
SSD benefits, much like SS retirement benefits, require the individual to have been engaged in employment covered by SS payroll deductions. In general, the applicant must have worked 20 of the 40 quarters prior to the date he became disabled. Put differently, if an individual has worked consistently up to the point his disability began, he will maintain coverage for approximately five years thereafter. This means he must establish his disability no later than the date he is last insured for disability benefits (DLI). If he is unable to demonstrate disability by the DLI date, he will be ineligible for SSD.
There is no asset limitation associated with SSD benefits.
Individuals who have not engaged in covered employment to the degree necessary to qualify for SSD coverage can qualify for SSI benefits. However, there are strict earnings limitations associated with SSI. Specifically, if an individual has more than $2000 ($3000 for a married couple) in assets, apart from his home and one vehicle, he will not qualify for SSI benefits.
Under both programs, the individual must establish an Alleged Onset Date (AOD), i.e., the date on which he alleges he became disabled. In order to become entitled to SSD, the AOD must be a date prior to the DLI. The SSA can either agree that disability has been established on the AOD (a Fully Favorable decision), deny that a disability exists (an Unfavorable decision), or accept that the claimant has demonstrated a disability, but on some date other than the AOD (a Partially favorable decision). If either a FFD or PFD is made, the onset date then establishes two important things. First, from an indemnity standpoint, the onset date begins the five – month waiting period associated with SSD benefits. In other words, let’s assume the SSA agrees the individual became disabled 4/26/10. The individual is ineligible for indemnity benefits for a period of five full months. Since April would not be a full month, the five full month period would be the months of May – September 2010. This means the first month on which the claimant would be entitled to a disability benefit check would be October 2010.
In terms of entitlement to Medicare coverage in the context of the above example, the individual would first qualify for Medicare 24 months after he first became entitled to indemnity benefits. This means he would qualify for Medicare in October 2012. The SSI program does not have a five – month waiting period. Consequently, for individuals who meet the requirements of both SSI and SSD (i.e., requisite quarters of coverage for SSD and minimal assets associated with SSI), the individual can qualify for SSI for those first five months during which SSD benefits were not available.