Submitted by Ram on Tue, 04/19/2011 - 10:55 The amount of Social Security Disability Insurance (SSDI) benefits you are entitled to if you are found to be completely disabled by the Social Security Administration (SSA) is based on the full amount of retirement benefits you are eligible for. You can not receive both disability benefits and retirement
benefits at the same time. If you qualify for disability benefits, your benefits will automatically be changed to retirement benefits when you are old enough for full retirement. In some cases, however, you can apply for Social Security Disability benefits and simultaneously take an early retirement, if you’re old enough. While this works out well for those who are eventually approved for
Social Security disability benefits, it can have long term negative effects on your income if you are not ultimately approved for disability benefits. Here’s how it works: You need to apply for Social Security disability benefits first. This establishes your protected filing date and an alleged date of onset for your disabling condition. As with anyone else who applies for Social Security disability benefits, you must have a disabling condition which has lasted or is expected to
last a year or longer (or to result in your death). After you have applied for Social Security disability benefits, you apply for early retirement. The SSA will accept your application for early retirement as long as you have sufficient credits to retire. When your application is processed, you will begin receiving Social Security retirement benefits at a reduced rate. Opting for early retirement costs you 25% of your full retirement benefit amount. For instance, if your full retirement
amount would be $1,000, your reduced retirement benefit is $750. If your disability claim is eventually approved, you will be entitled to start receiving your full retirement amount immediately (albeit in the form of Social Security disability benefits). You will also be entitled to back pay for the entire time you were eligible for Social Security disability benefits. This
means you would be paid your full retirement/disability amount for any months during which you didn’t receive retirement payments and the other 25% of your retirement amount for the months in which you received a reduced payment. Additionally, your retirement benefits would be adjusted so that you would receive full retirement benefits when you reach full retirement age. Before making the decision to apply simultaneously for early retirement and Social Security disability benefits,
however, you should consider the effects it could have on your retirement benefits. If, for example, you are ultimately denied Social Security Disability benefits, your retirement benefits would be kept at the reduced rate permanently. Before making any decisions, consider consulting an experienced Social Security disability lawyer to make sure that you have a solid case for Social Security disability benefits. Consulting a
Social Security disability lawyer won’t cost you anything unless he or she takes your case and your disability claim is approved. Even then, he will only charge you a percentage of the back pay to which you are entitled. Your ongoing benefits will be unaffected. Since the decision to apply for both disability and retirement benefits could have permanent effects on your retirement, you don’t want
to make the decision without the advice of a qualified Social Security Disability attorney. < Previous Section Table of Contents Next Section > Example of concurrent benefits with Employment SupportsMany individuals are eligible for benefits under both the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs at the same time. We use the term “concurrent” when individuals are eligible for benefits under both programs. Below we describe how a return to work may affect an individual’s concurrent benefits. Armando files applications for SSDI benefits and SSI on February 27, 2017. His medical condition caused him to stop work beginning February 14, 2014. We call this date his “alleged onset date” of disability. Armando was approved for disability benefits. Armando receives an award letter on June 7, 2017, stating he is approved for disability benefits with his alleged onset date of February 14, 2017.
Armando qualifies for Medicare.
Armando wants to work.
Armando returns to work.
How Armando’s work affects his SSDI benefits.
Is Armando performing SGA? We know from Armando’s pay stubs that he receives $2,000 a month in wages. Armando tells us that he is able to complete only four car repairs a day, compared to his co-workers who complete an average of 6-8 car repairs a day. Armando believes he is paid the same salary as his fellow co-workers. If this is the case, Armando’s employer may be subsidizing his wages. We contact the employer and learn that the employer is paying Armando $2,000 a month, the same rate as experienced employees who complete 6-8 repairs a day. The employer pays Armando the same rate as the experienced employees because he knows about Armando’s disability and understands it takes him longer to complete tasks. The employer calculates that the actual worth of Armando’s services is $1,800 a month. This means that Armando has a monthly subsidy of $200, which is the difference between what he is paid ($2,000) and what his employer says his services are worth ($1,800). Armando takes a taxi to and from work and provides receipts showing this cost is $350 per month. Armando’s treating physician confirms that his condition prevents him from driving. He cannot take public transportation because crowded situations aggravate his condition. Since Armando pays for his work transportation and there is a medical need for him to take a taxi, we can deduct the cost of his transportation expenses as impairment-related work expenses (IRWE). We use Armando’s subsidy and IRWE to determine if his earnings are SGA as follows: $2,000 wages - $200 employer subsidy - $350 IRWE = $1,450 monthly earnings $1,450 is over the monthly SGA level, so Armando is engaging in SGA in the first month of his EPE, October 2022. (Note: We usually adjust these amounts every year based on increases in the national average wage index.) Armando’s SGA level work activity affects his benefits in the EPE.
Will Armando’s entitlement to SSDI terminate?
How does Armando’s work activity affect his SSI benefit? SGA rules are different for SSI. For SSI disability benefits, we only consider SGA when the initial claim is filed (unless the disability is blindness, then we do not consider SGA at all). We do not consider SGA after a person becomes eligible for SSI. However, we must determine whether the person continues to meet the non-disability requirements, including income and resources. We determine the effect of Armando’s earnings on his SSI eligibility and payment amount on a month-by-month basis.
Will Armando continue to have Medicaid? Medicaid will continue as long as Armando’s earnings are below his state’s threshold amount, he needs the Medicaid coverage, and he continues to be eligible for SSI except for his earnings. During this time, he is eligible for an SSI payment for any month that his countable income is under the FBR amount. When Armando’s earnings exceed the state threshold amount, his Medicaid will end. However, he may then be eligible to buy into Medicaid if he resides in a state that has the optional Medicaid buy-in program. Will Armando continue to have Medicare? Armando will no longer receive SSDI payments, but his Medicare coverage will continue for at least 93 months after his TWP (which ended September 2022) as long as he continues to have a disabling impairment (has not medically improved). Armando’s Medicare coverage will terminate on July 1, 2030. Armando could then choose to purchase Premium Medicare Hospital Insurance coverage (Part A). If he purchases Part A, he can purchase Part B. He can qualify for the Part A reduced rate since he has earned at least 30 quarters of coverage. We will base Armando’s Medicare Insurance (Parts A and B) premiums on the rates in 2030, the year his premium-free coverage ends. Armando will have to file an application with Social Security if he decides to purchase Medicare coverage in 2030. He will also have to undergo a medical continuing disability review. Armando can purchase Medicare coverage if we determine that his medical condition has not improved after conducting this review. If Armando still has Medicare when he turns age 65, it will automatically convert to Medicare under the Aged provisions. Summary of Example with Concurrent Benefits
How does retirement work with disability?Disability & Industrial Disability Retirement
If your disability or industrial disability retirement is approved, you'll receive a monthly retirement payment for the rest of your life or until you recover from your injury or illness. Generally, you must have at least five years of service credit to be eligible.
What happens if you are on disability and reach retirement age?your disability benefits automatically convert to retirement benefits, but the amount remains the same. If you also receive a reduced widow(er)'s benefit, be sure to contact Social Security when you reach full retirement age, so that we can make any necessary adjustment in your benefits.
Does Social Security disability pay more than Social Security retirement?If you're comparing these two types of Social Security benefits, then you should know that typically the SSDI benefits pay more. In fact, disability in this scenario is, on average, more than double the benefits you would receive from SSI benefits.
Is it better to go on disability or retire?In most cases, it is better to receive disability benefits until you reach full retirement age. If you collect early retirement, your benefits are permanently reduced. If you receive SSDI payments until you reach full retirement age, there is no permanent reduction in your retirement benefits.
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