Social Security and Medicare

Chapter 5Disability Income Benefits

Learning objectives

• Recall the relationship between Social Security disability income benefits and retirement benefits.
• Identify how claims for Social Security disability income benefits are made.
• Recognize the relationship between Social Security disability income benefits and Medicare.
• Recall how Supplemental Security Income (SSI) operates.

Overview

An individual’s chances of becoming disabled are greater than most people think. Studies conducted by the Social Security Administration (SSA) show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching his or her full retirement age.

Social Security disability insurance, or SSDI, is a federally operated and regulated disability insurance program. Workers pay for this federal insurance through Federal Insurance Contribution Acts (FICA) taxes. SSDI is distinct from Medicare, Medicaid, and the needs-based SSI programs. SSDI provides monthly benefits to eligible workers who have not attained their full or normal retirement ages (65–67) and can no longer work because of a significant disability that is expected to last 12 months or more, or is expected to be terminal. As in the case of other types of Social Security benefits, the SSDI benefit is based on the recipient’s FICA-covered earnings history. However, benefit limits are substantially lower.

Among the numerous and rigorous requirements for disability income benefit eligibility, the impairment or combination ...