A Guide to SSDI Benefits: Who Qualifies and What to Do If You’re Denied

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Editor’s Note: This story originally appeared on The Penny Hoarder.

Someone born in 2000 has about a 1 in 4 chance of becoming disabled before reaching the full retirement age of 67.

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For a worker who becomes disabled during their working years, Social Security Disability Insurance (SSDI) is a lifeline.

As with Social Security retirement benefits, Social Security disability benefits are available only to workers who have earned work credits and paid payroll taxes. In some cases, spouses and dependent children may receive any type of benefit based on the insured’s work record.

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The SSDI application process is extremely onerous.

People who qualify for benefits must follow a number of strict rules, especially when it comes to working. In this article, we’ll explain how SSDI works and answer some commonly asked questions about disability benefits.

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Who is eligible for SSDI benefits?
Older couple worried about social security and expensesAndrey Zastroznov / shutterstock.com

Eligibility for Social Security disability insurance is based on two criteria: whether you have a medical diagnosis that meets Social Security’s definition of disability and your work history.

medical diagnosis
woman getting ct scanTyler Olson / shutterstock.com

You will need to be diagnosed with a physical or mental health condition that will leave you unable to work for at least one year or is likely to result in death. Social Security’s Blue Book includes a comprehensive list of conditions that meet the minimum threshold for disability.

But having one or more of the conditions listed doesn’t automatically mean you’ll qualify for disability benefits.

Similarly, even if your condition is not listed, you may still qualify if your medical diagnosis meets Social Security’s disability criteria.

work history
woman preparing taxesfizcase / shutterstock.com

To collect Social Security, including disability benefits, you typically need 40 work credits. In 2023, you would need to earn $1,640 in a quarter to earn one work credit. You cannot earn more than four credits in any given year.

Youth workers who have paid Social Security taxes may qualify with a reduced credit if they become disabled.

You will also need to meet the recent work test, which means you earned work credits in the period immediately before you became disabled. For example, if you are 31 or older, you must have worked five out of 10 years before developing a disability.

How do I apply for SSDI?
Social Security Disability Insurance SSDI Application Form and Pen.Vitaly Vodolzhsky / shutterstock.com

You can apply for Social Security Disability online, in person at your local office or by calling 1-800-772-1213 (TTY: 1-800-325-0778).

along with identifying documents such as your birth certificate (or proof of citizenship or lawful alien status if you were not born in the US), W-2s or self-employment tax records, medical evidence and documents related to any temporary Be prepared for or permanent workers’ compensation-type benefits you received.

There is a five-month waiting period for SSDI benefits. You can’t apply until your sixth month after becoming disabled, which in Social Security parlance is known as your start date.

On top of that, in 2021, it took an average of five months to process an SSDI application, but many states have a long backlog.

Don’t delay your application because you don’t have all the required documents. Social Security workers will help you locate them.

Do I need an attorney to apply for SSDI?
2 male business lawyers work to talkpressmaster / shutterstock.com

No, but you should seriously consider consulting an attorney, given that about two-thirds of initial SSDI applications are denied.

Attorneys who represent SSDI applicants work on contingency, which means they get paid only if you win your case. It is illegal to charge an upfront fee to represent someone in a disability claim.

If your application is approved, your attorney’s fees are capped at the lower of: 25% of your first payment (which includes a lump sum for benefits beginning in the sixth month after the start date) payment included) or $6,000.

What if my application is rejected?
The woman holds a letter saying claim rejectedRawpixel.com/Shutterstock.com

If your first application for disability benefits is denied, you have four chances to appeal. You usually have 60 days after your claim is denied to take your case to the next level.

Ask for Reconsideration: You’ll start by requesting a review of your initial application from your local Disability Determination Services, a state-level Social Security office that handles disability claims. During this time, you can submit additional evidence, such as medical records, to bolster your claim. Request a Hearing with an Administrative Law Judge: If your claim is denied, you may request a hearing before an Administrative Law Judge. Take it to the Appeals Council: If a judge denies your claim, the next step is to take your case to the Social Security Administration’s Appeals Council. Appeal in Federal Court: If the Appeals Council panel denies your claim, your final option is to challenge the decision in US District Court. How is disability payment calculated?
Person with papers, calculator at deskmangostar / shutterstock.com

The SSA calculates your SSDI benefit as if you’ve already reached full retirement age, which is 67 for someone born in 1960 or later.

The maximum SSDI benefit is the same as the maximum monthly benefit for someone retiring at full retirement age: $3,627 in 2023.

But the average SSDI gain is quite low. In 2023, the average SSDI beneficiary will receive only $1,483 per month, compared to $1,827 for the average retired worker.

Disability benefits are generally less than retirement benefits because Social Security uses your average gross annual wage to calculate your benefit. Wages increase with time.

Because workers with disabilities often miss their high-earning years, their average earnings tend to be lower.

Is it allowed to work while collecting SSDI?
man in wheelchairwavebreakmedia / shutterstock.com

You can work while collecting SSDIs, but the limits are strict.

Social Security disability benefits stop if you engage in what is known as substantial gainful activity, which is defined as earning more than $1,470 a month in 2023 if you are not blind or $2,460 if you are blind.

However, you are allowed a nine-month trial work period during which you can test job without jeopardizing your SSDI eligibility.

You can take your trial work periods continuously for months or spread them out over seven years.

During any trial work period month, you can earn any amount without affecting your benefits, but you must report your income to Social Security. In 2023, any month in which you earn at least $1,050 counts as a testing work month.

What is the difference between SSDI and SSI?
Happy senior in wheelchair in a medical facilityimtmphoto/Shutterstock.com

Supplemental Security Insurance (SSI) is available to people who have a disability or are 65 and older, but eligibility is limited to people with limited income and resources.

Unlike SSDI recipients, SSI recipients are not required to earn work credits. The maximum monthly SSI benefit for individuals in 2023 is only $914.

What happens to SSDI benefits when you reach retirement age?
man of retirement ageDiplomamedia / shutterstock.com

Once you reach full retirement age, your SSDI benefit will automatically convert to retirement benefit. Typically, your monthly benefit does not change.

Does Social Security recognize partial disability?
A woman uses sign language at home to communicate via tablet computerMonika Wisniewska / shutterstock.com

No. While the Workers’ Compensation Program and the Department of Veterans Affairs pay benefits for partial disability, you must meet Social Security’s criteria for total disability to receive benefits through SSDI.

Can You Collect Your Spouse’s or Ex’s SSDI?
matrimonial documentRoman Motizov / shutterstock.com

Along with Social Security retirement benefits, you may be eligible for spousal benefits if your current or former spouse receives SSDI monthly benefits.

You can receive up to 50% of your spouse’s primary insurance amount – and only if it exceeds your own Social Security benefit.

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