Get What’s Yours: The Secrets to Maxing Out Your Social Security has a chapter on America’s favorite program: SSDI. Here are some excerpts:
Just as Social Security has become the dominant source of income for most older Americans, so has it become the nation’s default welfare program. Neither role was part of the agency’s founding mission, which envisioned Social Security as a modest source of income to augment people’s savings and pensions. Yet here the program finds itself, some 80 years later, paying out benefits under two programs to more than 20 million disabled Americans. That’s a huge number in its own right and even more so considering how many additional lives and livelihoods are affected by the $200 billion in annual benefits the disabled receive.
The rules for disability benefit eligibility are quite demanding. They are less strict if you are younger, however. For example, someone who is disabled prior to age 25 can collect disability benefits with only 6 quarters of covered earnings.
Another key point (which applies to the non-disabled as well): you can obtain up to 4 quarters of coverage in a given quarter simply by earning enough money in that quarter.
So perhaps the optimum SSDI strategy for a lot of Americans is to work for about 6 months at a reasonably high salary and then become disabled prior to age 25? Maybe not:
We’ve had several people with disabled children ask us how their child could collect child benefits while they themselves are still alive, and child survivor benefits after they die. Just as we were about to tell them they only needed to apply for their child to receive them if that child was disabled prior to age 22, they stopped us dead in our tracks. They did so by telling us either (1) their child was working or (2) their child was receiving disability benefits on the child’s own work record. In both cases, this meant the child may have disqualified himself or herself, forever , for both disabled child and child survivor benefits. The reason is that for disabled children to collect on their parents’ work records, they not only have to have been disabled before age 22, but they have to stay disabled. And if your child earns too much money in even one year, Social Security will view the child as not having remained disabled. For 2016, the limit was $13,560, with some adjustment for work expenses. That’s not a lot of money. In one case, a parent told us they had employed their disabled child themselves for one year to make the child feel he played a meaningful role in society. (In fact, the child had not earned his pay and had not been able to continue coming to work.) When we asked how much the child had been paid, we winced. It was about $1,000 more than the annual limit, meaning the parent may well have disqualified the child for the rest of the child’s life from collecting benefits on the parent’s work record.
Readers: Please read Get What’s Yours: The Secrets to Maxing Out Your Social Security and figure this out and then give us the answer in the comments section!
Related:
When dating after 40, SSDI is like a 5th member of the family, besides the stepkid, the ex husband, the disabled woman, & you.
Following statement is ridiculos: “… agency’s founding mission, which envisioned Social Security as a modest source of income to augment people’s savings and pensions. ”
Were parents of great generation sold cuddly old age perks tax? Why would they accept ‘movie tickets insurance’ tax? It is clear that the goal was complete funding of retirement years, and here social security does not perform well – if you take lifetime social security tax and invest it very conservatively, total payout will be same or greater than expected lifetime social security benefits payout, minus hundred of billin of federal debt..
NPR’s Planet Money did an extensive story on disability became the de-facto welfare program.