Social Security Disability Insurance

Social Security Disability Insurance

Social Security Disability Insurance (SSD or SSDI) is a payroll tax-funded, federal insurance program of the United States government. It is managed by the Social Security Administration and is designed to provide income supplements to people who are physically restricted in their ability to be employed because of a notable disability, usually a physical disability. SSD can be supplied on either a temporary or permanent basis, usually directly correlated to whether the person's disability is temporary or permanent.

Unlike Supplemental Security Income (SSI), SSD does not depend on the income of the disabled individual receiving it. A "legitimately" (i.e. according to the Americans with Disabilities Act, and via other similar legal and medical backing) disabled person of any income level can theoretically receive SSD. Most SSI recipients are below an administratively-mandated income threshold, and indeed these individuals must in fact stay below that threshold to continue receiving SSI; but this is not the case with SSD.

Informal names for SSDI include Disability Insurance Benefits (DIB) and Title II benefits, named for the chapter title of the governing section of the Social Security Act.



According to the Social Security Administration (SSA), a person qualifies for SSDI if:

  • they have a physical or mental condition that prevents them from engaging in any "substantial gainful activity" ("SGA"), and
  • the condition is expected to last at least 12 months or result in death, and
  • they are under the age of 65, and
  • generally, they have accumulated 20 social security credits in the last 10 years prior to the onset of disability (normally four credits per full or partial year); one additional credit is required for every year by which the worker's age exceeds 42.[1][2]

The work requirement is waived for applicants who can prove that they became disabled at or before the age of 22, as these individuals may be allowed to collect on their parent's or parents' work credits. The parent(s) experience no loss of benefits.

Medical evidence is signs, symptoms and laboratory findings and is required to document the claim. Symptoms, such as pain, are considered but must be reasonably expected to come from a medically determinable impairment which the claimant is diagnosed to have. The decision is based on a sequential evaluation of medical evidence. The sequence for adults is: 1. Is the claimant performing a Substantial Gainful Activity? If yes, deny. If no, continue to next sequence. 2. Is the claimant's impairment severe? If no, deny. If yes, continue to next sequence. 3. Does the impairment meet or equal the severity of impairments in the Listing of Impairments? .[3] If yes, allow the claim. If no, continue to next sequence. 4. Is the claimant able to perform past work? If yes, deny. If no continue to next sequence. 5. Is the claimant able to perform any work in the economy? If yes, deny. If no allow the claim.

Medical evidence that demonstrates the applicant's inability to work is required. The DDS or ALJ may also require the applicant to visit a third-party physician for medical documentation, often to supplement the evidence treating sources do not supply. The applicant may meet a SSA medical listing for their condition. If their condition does not meet the requirements of a listing, their residual functional capacity is considered, along with their age, past relevant work, and education, in determining their ability to perform either their past work, or other work generally available in the national economy.

Determination of a residual functional capacity—made in the fourth step in the sequential evaluation process—often constitutes the bulk of the SSDI application and appeal process. A residual functional capacity is assessed in accordance with Title 20 of the Code of Federal Regulations, part 404, section 1545[4] by a disability determination service (DDS) or, on appeal, by an administrative law judge (ALJ), and is generally based upon the opinions of treating and examining physicians, if available.

Residual functional capacity (RFC) is classified according to the five exertional levels of work defined in the Dictionary of Occupational Titles, which are: Sedentary, Light, Medium, Heavy, and Very Heavy. If the residual funcational capacity of an individual equals the previous work performed, the claim is denied on the basis that the individual can return to former work. If the residual functional capacity is less than former work then the RFC is applied against a vocational grid that considers the individual's age, education and transferrability of formerly learned and used skills. The vocational grid directs an allowance or denial of benefits.

SSDI Representation

You may apply for SSDI benefits on your own, or you can hire a disability or SSDI representative to assist you in applying for or appealing a claim. Typically, there are two primary types of paid SSDI representation organizations. First, there are companies with trained specialists experienced in handling SSDI applications and appeals in some or any local community across the country. There also are law firms that usually specialize in disability related cases in a local community.

Most SSDI applicants—about 90 percent according to the SSA—have a disability representative for their appeal. An August 2010 report by the Office of Inspector General for the Social Security Administration indicated that many people submitting an initial disability application for SSDI might benefit from using a third-party disability representative when they first apply for benefits. It indicated that having a disability representative earlier in the process significantly improves the chances of those with four major types of disabilities getting approved for SSDI.[5]

The fee that a representative can charge for SSDI representation is set by law. Currently, under the SSA's fee agreement approval process, it is 25 percent of the retroactive dollar amount awarded, not to exceed $6,000. Some representatives may charge fees for costs related to the claim, such as photocopy and medical record collection expenses. If an SSDI applicant is approved quickly and does not receive a retroactive award, the SSA must review and approve the fee a representative will charge the individual. Disability representatives do not charge a fee if they are unsuccessful in obtaining a claimant’s disability benefit.

A representative may decline to represent you if, after reviewing your situation, they do not believe you are likely to meet the requirements for SSDI. Most representatives will provide this screening at no cost to you. Typical reasons individuals do not meet the requirements are: their disability is not severe enough or the applicant does not have a sufficient work history (and did not pay enough into FICA).

Wait time for applications

The amount of time it takes for an application to be approved or denied varies, depending on the level of the process at which the award is made. In 2009, there were 2,816,244 applications for SSDI.[6] As of March 31, 2007, the number of pending applications (or "backlog") was 1,463,153.[7] Experts have asserted that this backlog is being caused by the increase in applicants, the increase in retiring SSA workers, the inability of the SSA to replace the retiring workers and budget limitations.[8]

The Social Security Administration estimates that the initial benefits application will take 90 to 120 days, but in practice filings can take up to eight months to complete. The appeals process for denied filings can likewise take 90 days to well over a year to get a hearing, depending on caseloads.[9] At the initial application level the claim actually takes as long as it takes to get medical treating sources to respond with sufficient medical evidence to document the disability claim.

In an attempt to speed up the application process, beginning in August 2006, the SSA implemented changes to the application process in the six-state New England region, on a trial basis. On December 1, 2007, the SSA implemented the program nationwide.[10]


The SSA provided a table of average wait times which were current through the end of fiscal year 2009.[6] These times include awards and denials.

Level Name Wait time
1 Initial application 101
2 Reconsideration no data
3 Hearing 491
4 Appeals Council 261
5 Federal district court no data

The 10 states with the longest wait time are Ohio, Michigan, Minnesota, Wisconsin, Indiana, Nebraska, Illinois, Missouri, the District of Columbia (D.C.) and Alabama.[11]

Likelihood of receiving benefits

Nationwide statistics provided by the SSA in 2005 stated that 39 percent of all SSDI applications are approved at the state level by Disability Determination Services (DDS) (including determinations made at both the initial and, in non-prototype states, reconsideration steps).[12][13]

For each step, the approval and appeal rates appear to be the following:

Level Approval %  % of denials appealed
Initial Determinations 36 33
Reconsideration Determinations 14 > 90
Hearing Decisions 63 43
Appeals Council 33 no further appeals, claimant may elect to pursue claim in Federal district court

Payee assignment

Generally, the person qualifying for benefits is determined to be capable of managing their own financial affairs, and the benefits be disbursed directly to them. In the case of persons who have a diagnosed mental impairment which interferes with their ability to manage their own finances, the Social Security Administration may require that the person assign someone to be their representative payee. This person will receive the benefits on behalf of the disabled individual, and disburse them directly to payors such as landlords, or to the disabled person, while providing money management assistance (help with purchasing items, limiting spending money, etc). The representative payee generally does not charge a fee for this service, especially if its a friend or relative. Social service agencies who are assigned as payee are prohibited from charging a fee, though some private payee agencies do provide the service for a small fee. Some states and counties have representative payee agencies (also called substitute payee programs) which receive the benefits on behalf of the disabled person's social worker, and disburse the benefits per the social worker's instructions.

Differences between SSDI and Long Term Disability Insurance

  • Social Security provides a regular monthly payment that supplements any current disability benefits already received.[citation needed] It also provides annual cost of living increases. A portion of these benefits may be tax free.
  • Regardless of a person's age, after receiving SSDI benefits for 24 months, they are eligible for Medicare, including Part A (hospital benefits), Part B (medical benefits), and Part D (drug benefits). The date of Medicare eligibility is measured from the date of eligibility for SSDI (generally 6 months after the start of disability), not the date when the first SSDI payment was received.
  • If a person receives Social Security disability benefits, any COBRA benefits may also be extended from 18 to 29 months.[citation needed]
  • Social Security disability entitlement "freezes" Social Security earnings records during a person's period of disability so that reduced earnings during a period of disability will not have an adverse effect on retirement benefits. The resulting benefits computation may raise, but will not lower, future Social Security retirement benefits.[citation needed]
  • A person receiving Social Security Disability Insurance may have a dependent (child, adopted child, or, in some cases, a stepchild or grandchild) eligible for Social Security benefits. This child must be under age 18 or under age 19 if in elementary or secondary school full time.
  • A person receiving Social Security Disability Insurance may have a spouse eligible for Social Security benefits. The spouse must be 62 or older or caring for a child of the wage earner who is younger than age 16 or disabled.
  • Benefits can be paid on the record of a disabled, retired or deceased parent to an unmarried child of any age if the child became disabled before the age of 22.
  • Social Security will provide a person opportunities to return to work while still paying them disability benefits.


  1. ^ Social Security Administration [1]
  2. ^ Barbara C. Wallace. Toward Equity in Health. Springer Publishing Company. Retrieved 2008-09-11. 
  3. ^ "Listing of Impairments - Adult Listings". Social Security Administration. Retrieved 2008-02-07. 
  4. ^ "20 CFR § 404.1545, Your Residual Functional Capacity". Social Security Administration. Retrieved 2008-12-19. 
  5. ^ "Office of the Inspector General – Social Security Administration: Disability Impairments on Cases Most Frequently Denied by Disability Determination Services and Subsequently Allowed by Administrative Law Judges (August 2010)". SSA. Retrieved 2010-11-23. 
  6. ^ a b SSA (March 31, 2010). "Disabled-worker stats". Retrieved 2010-04-14. 
  7. ^ Sylvester J. Schieber, Chairman, Social Security Advisory Board (February 14, 2007). "Testimony Before the Subcommittee on Social Security of the House Committee on Ways and Means". Retrieved 2008-02-07. 
  8. ^ "AAPD and Allsup Release State Rankings for Disability Backlogs". PRWeb. Retrieved 2008-02-07. 
  9. ^ "Navigating Statement of Sylvester J. Schieber, Chairman, Social Security Advisory Board". Committee on Ways and Means, U.S. House of Representatives. 2008-04-23. Retrieved 2008-09-11. 
  10. ^ "Commissioner Astrue Extends Social Security’s Quick Disability Determination Nationwide: Final Rule Will Accelerate Benefits to Those Deemed Clearly Disabled". Press release. Social Security Administration. September 5, 2007. Retrieved 2008-02-07. 
  11. ^ "Allsup State-by-State Backlog Analysis". Press release. Allsup. April 6, 2010. Retrieved 2010-04-14. 
  12. ^ "Social Security Disability Insurance: Participation Trends and Their Fiscal Implications". policy paper. CBO. July 22, 2010. Retrieved October 11, 2010. 
  13. ^ "Improving the Social Security Disability Decision Process". book. Board on Military and Veterans Health. 2007. Retrieved October 11, 2010. 

Further reading

External links

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