Studies have shown that you are more likely to become disabled than die during your working years. In fact, a 20 year-old worker has a 3 in 10 chance of becoming disabled before he or she retires by the age of 65. The Social Security Administration pays Social Security Disability to workers who meet its very strict criterion. For those who do qualify, these benefits are either paid to you or a qualifying relative should you become severely disabled and unable to work. Be advised - this coverage is very limited and the majority of initial claims are denied. The following outlines the criteria set forth by Social Security to qualify for federal disability benefits.
Under the Social Security Disability program a worker must meet the following criterion to receive benefits: the worker can no longer perform their job, the individual cannot perform any other kind of work, and the disabled worker’s impairment is expected to last a minimum of one year. This very strict definition of disability only pays benefits for total disability and will not pay for partial or short-term ailments.
In addition to the physical disability requirements, Social Security Disability benefits will only be paid to individuals who meet certain employment requirements as well. For those 31 and older, a worker must have been employed at least 5 of the prior 10 years by jobs covered under Social Security. Workers younger than 31 must have been employed a minimum of 1½ years.
Assuming an individual has met the above-mentioned criterion, let’s discuss what a worker is entitled to receive in the way of disability benefits. First it’s important to note there is a five-month waiting period before you will receive any benefits. The disability program assumes individuals will have access to personal savings, Workers’ Compensation, and/or their private disability insurance plan. To understand the level of compensation one can expect, the Social Security Administration offers an online calculator to determine what your benefits would be should you become disabled. For example, a 40 year-old employee earning $50,000 a year would qualify for $1505 per month. This would mean the employee would only be entitled to $18,060 annually. A mere fraction of the recommended 60 percent needed to maintain an individual’s standard of living. The disabled individual can expect to be paid their benefits until the disability ends, the worker dies, or they reach retirement age. Once a disabled individual retires the disability benefits will covert to retirement benefits.
The strict guidelines imposed by the Social Security Disability program do make it extremely difficult to qualify for benefits. If you do qualify it’s important to realize the limited scope of the benefits you will receive. To protect your family’s assets it’s important to consider obtaining private disability insurance coverage to make sure you’re adequately protected.