Disability benefits explained from square one: Part 1
OK, we're going to cover a lot of ground in the next few installments, so let's start with a quick review of the basics.
The acronyms SSDI and SSI refer to the most well known programs that help people who develop long term disabilities. Both are administered by the Social Security Administration (SSA), and each is notorious for being cumbersome, slow, and difficult for the average person to deal with--which is why many who need disability help turn to professional advocates and attorneys who specialize in the field.
SSDI = Social Security Disability Insurance, which pays benefits to workers (and some family members) who qualify; the basic qualification to receive these insurance payments is that you have:
to fund your "insurance account." In other words, if your work history comprises jobs that did not pay--or pay enough--into Social Security, in most cases you won't qualify for SSDI.
In that case, however, you may qualify for SSI, which stands for Supplemental Security Income--this program is not based on payments made from jobs but does award benefits based on financial need.
Together these two programs account for the bulk of what most of us consider the disability program for Americans. However, as mentioned, jumping through the hoops can be maddening, and the built-in delays can result in a payments arriving so slowly that the claimant has already died.
For a quick example of how slow the SSA acts, have a gander at its disability front page. As of post time, you can look to the top, upper right of the page and see a link to a press release with the following headline:
- worked long enough to have paid
- enough Social Security taxes through payday deductions
Social Security Administration Attacks Disability Backlog
Which sounds like a good thing, right? Well, it is--always good to catch up on a backlog.
But notice the dateline ===> Tuesday, October 9 , 2007
Shoot, we have more recent, more accurate info right here, toward the end of a May 2010 post in which we discuss delay issues among the various states.
That being said, SSI/SSDI remain the most publicly known disability programs. But they're not the only alternative.
The Council for Disability Awareness (CDA) is a nonprofit organization that says its purpose is to inform and educate "the American public about the widespread and growing frequency of disability, and the financial impact it can have."
However, judging from its "members page," one might infer the group has an interest in selling disability insurance. That being said, however, the Web site does indeed offer a wealth of information.
For one thing, here's a page about "reducing your chances" of becoming disabled. Pretty standard stuff: wellness tips such as "quit smoking, get regular checkups," and so forth. Of course, most people don't think about disability until a family member or they themselves become disabled.
But the statistics suggest that all adults should be aware of at least the basics of disability. For instance, it seems to be a common misperception that "events" cause most disabilities: a car wreck, an accident at work or home, etc..
But according to CDA, which claims to base its figures on the latest available census data and on info from the Centers for Disease Control, the most common causes of disability are injuries or accidents but rather:
Oddly enough, this CDA page is quite contradictory, both in overall tone and in these specific statements (emphasis added):
- "Illnesses like cancer, heart attack or diabetes cause the majority of long-term disabilities. Back pain, injuries, and arthritis are also significant causes.
- "Most are not work-related, and therefore not covered by workers' compensation.
- "Lifestyle choices and personal behavior that lead to obesity are becoming major contributing factors."
Perhaps the intention was to say something like, "unless you injured in an accident or taken with sudden illness, disability can creep up on you, until there's a sudden realization that your condition leaves you in financial peril."
At any rate, the CDA's suggestions are sound as far as how to think about finances in the event of a disability, including:
- "It strikes like a bolt from the blue: unwanted, unexpected, unwelcome. Unfortunately, many of us are totally unprepared for the financial hit that disability can bring.
- "Most Americans live paycheck to paycheck. There's little or no money left for unexpected emergencies like an injury or illness - the primary causes of disability.
Step 1 is, basically, preparing a budget. (The page has a link to a "calculator" routine.)
Step 2 is to, as may be expected, isolate and trim unnecessary expenses.
Step 3 is where we get into "the meat" of disability finance:
- Your sources of income, monthly expenses and lifestyle
- The impact a long-term disability could have on them
- Preparing a plan of action to address the crisis
That is where we will continue the discussion in Part 2.
- Employer sick pay
- State benefits
- Disability insurance benefits
- Workers comp
Applying for disability benefits from the Social Security Administration can be a daunting and frustrating challenge. For more on the basics of disability, SSI, and SSDI, please click here.You will also have the opportunity to click on information about attorneys who can help you and a link for a free case review.