Social Security Disability Benefits 101 – Everything You Need to Know

What exactly is Social Security Disability Insurance and how is it funded? Social Security Disability is a program that provides earned benefits to workers who are no longer able to work due to a severe mental and/or physical impairment. This is not to be confused with Supplemental Security Income, which is also for people unable to work due to a disability; however SSI benefits are available to low income/low resource people who do not have a sufficient earnings history to be eligible for SSDI benefits.

How many people receive Social Security Disability benefits?

In 2016, approximately 9 million people received Social Security disability benefits. This includes payments to the family members of disabled individuals (135,000 spouses and 1.7 million children).

How are Social Security Disability benefits funded?

SSDI benefits totaled $143 billion in 2016, 4% of the federal budget. The Social Security Disability Insurance program is financed by Social Security payroll tax contributions . Social Security payroll taxes are 1.185% of earnings up to the maximum taxable income of $127,200. In 2018, this amount will decrease to 0.9%. Once the payroll taxes are collected, the funds are deposited into the SSDI trust fund, which is separate from the Retirement and Survivor’s Fund.

Who is a typical Social Security Disability Insurance beneficiary?

The average SSDI recipient has 22 years of work experience and was considered middle-class before becoming disabled. SSDI beneficiaries on average are in late to middle age – 75% are 50 years and older, 40% are 60 years and older. Their death rate is three times higher as the general population.

How does someone qualify for Social Security Disability benefits?

Despite the belief that there is rampant fraud and anyone can get disability benefits, beneficiaries must meet very strict criteria to be eligible. In fact, most applicants for benefits are denied on their initial application. As little as 4 in 10 applicants are eventually awarded benefits. Further, once someone receives Social Security Disability benefits they may be subject to regular reviews to determine whether they have improved enough to no longer qualify for benefits In order to be eligible for Social Security Disability benefits a claimant must:

  1. Be Fully Insured: have owrked at least 1/4 of their adult lives and worked at least 5 of the past 10 years.
  2. Severe Impairment: have a physical or mental severe, medically determinable impairment that is expected to last at least 12 months or result in death.
  3. Unable to Perform Substantial Work – generally the person must be unable to do not only their past work but any other kind of substantial work (considering their age, education and skills).

How much is a monthly Social Security Disability Insurance benefit payment?

Beneficiaries receive different monthly benefit amounts depending on their work earnings history. The average monthly benefit in 2017 was only $1,172. Higher past-earners receive higher benefit amounts; however the amounts are still very small compared to prior earnings. The maximum possible Social Security Disability Insurance benefit for 2017 is $2,687.00.

https://www.cbpp.org/research/retirement-security/policy-basics-social-security-disability-insurance

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