SSDI stands for Social Security Disability Insurance. If you are paid via W2 then the money to pay for SSDI is taken out of every paycheck. If you are self-employed you pay SSDI with your taxes, and tax returns are due April 15, so I figure April 16 should be SSDI Day.
Did you miss SSDI Day this year? Me too. That's because I just made it up.
But the problem that SSDI Day addresses is real. Millions of Americans who are disabled to the point where they cannot work are denied the disability pay for which they had been paying premiums. That means you can pay the mandatory disability insurance to the government for 25 years, get sick, become disabled, yet fail to get a single penny in disability payments.
How could that happen? Because you have to keep earning to stay qualified for SSDI. If you work less than 5 out of the 10 years leading up to your claim you do not qualify. In a recent unscientific poll of random friends and neighbors I got the strong impression that a lot of Americans don't know this.
This is not just a problem for people of a certain age. Studies show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age.
That's why I thought it would be a great idea to create a Disability Insurance Awareness Day on the day after you pay your taxes. So, each year, on April 16, you should point out the problems discussed here to anyone you know who is not earning any money because they are too sick to work.
- Some disability happens quickly but other disability comes on gradually.
- Many Americans struggle on with their lives despite sickness.
- Too many Americans fail to observe the 5/10 SSDI rule.
- They try to get by or depend on friends and relatives.
- When they finally apply for SSDI they are not eligible.
How do I know this? Because it happened to someone I know: My wife. She became too sick to hold down a regular office job around 2001. She turned to writing to generate income. After taking expenses into account the writing did not generate net income, partly because she was too sick to carry through with the promotion of her books. So she turned to art. She produced some great paintings and photography, but again, ran out of steam before generating any net income from this avenue.
And she got sicker. Concentration was a challenge. Episodes of aphasia complicated communication (technically dysphasia but not dysphagia). Mobility became limited and I would say she is now about 6.0 on the EDSS scale. Clearly she is unable to do anything to earn money. But her claim for disability was denied. Despite spending over 25 years in the workforce and paying into the disability fund, she had not earned enough in the years preceding her application for disability. Ironically it was her efforts to try and make money and avoid becoming a burden on the state that sank her claim.
There are many ways to avoid this problem of being simultaneously unable to work and unable to collect disability, but they all require planning. Hence the need for awareness. Here's some helpful planning advice that I found in "Multiple Sclerosis: Your Legal Rights" By Lanny E. Perkins, Sara Perkins:
If it appears that you do not have enough work credits to qualify for SSDI benefits. perhaps because you took time out for childrearing, for education, or to deal u~th your illness. you may want to consider ways to continue working, at least long enough to meet the disability requirements. This might involve continuing your present job or finding an alternate, for example. part-time work that will allow you to go on earning the relatively small amounts required to accrue coverage credits. In some situations, it may be possible to engage in self-employment, possibly in a home-based business or in conjunction with your spouse, so that you can acquire the needed credits as soon as possible. You must be sure to pay your self-employment taxes to receive the credits!
So, there you have it. Whatever your age, whatever you current financial situation, you should be aware of these things. And one more thing. Do not assume Supplemental Security Income (SSI) will help you out. This is a government program that helps people who have a disability and very few resources. If your spouse has a good job there is very little chance you qualify for SSI.
(Disclaimer: I am not a lawyer or an expert on federal benefits. I believe the above statements about eligibility to be correct, but feel free to correct me in a comment to this post if you think I have something wrong.)