Social Security benefits are most commonly used to assist retirees in meeting their financial obligations. However, the Social Security Administration (SSA) offers disability benefits to those who meet certain strict criteria.
In this context, a disabled person is someone who has been medically unable to work for at least a year or has been diagnosed with a fatal medical condition. To be eligible for disability payments, you must have worked for a certain amount of time before being declared disabled. A medical provider must also certify the existence of your disability.
Let’s take a look at some of the most frequently asked questions about Social Security disability benefits.
What is the highest Social Security disability benefit available?
The maximum Social Security disability benefit you can receive in 2023 is $3,627 per month, up from $3,345 in 2022. This is the same as the maximum amount available to Social Security recipients at full retirement age.
In reality, most people who are approved for disability benefits receive monthly payments ranging from $1,000 to $1,500. While it is possible to receive more, you would have to have been a relatively high earner before becoming disabled because you would have paid more into the system in the first place.
Remember that the Social Security system functions similarly to an insurance company in that you pay into it through payroll taxes over the course of your working career. The benefits are then paid out at a later date, either when you retire or when you become disabled.
What are the definitions of disabilities?
Many medical conditions are considered disabilities if they prevent you from performing work-related tasks effectively and are expected to remain severe for the foreseeable future.
In other words, the Social Security Administration considers you disabled if your medical condition “significantly limits” your ability to perform work-related activities such as lifting, standing, walking, sitting, or remembering.
To qualify for disability payments, you’ll need to have worked for a specified period of time before being declared disabled(Photo: disabledperson.com)
Medical conditions that may be considered disabling include:
- Musculoskeletal disorders
- Sense and speech impairments
- Respiratory disorders
- Digestive disorders
- Genitourinary disorders
- Hematological disorders
- Skin disorders
- Endocrine disorders
- Congenital disorders affecting multiple body systems
- Neurological disorders
- Mental disorders
- Cancer
- Immune system disorders
While the SSA considers many different medical conditions to be disabling, your impairment must impact your ability to work productively and last for a period of time in order for your claim to be considered.
Is there anything else that comes with Social Security disability?
The main additional benefit of an approved Social Security disability claim is that you are automatically eligible for Medicare health care coverage after 24 months. Normally, you will not be eligible for Medicare until you reach the age of 65, but recipients of Social Security Disability Insurance (SSDI) are exempt from this requirement. If you became disabled prior to the approval of your SSDI claim, you may be eligible for retroactive credit toward the 24-month waiting period for Medicare eligibility.
The Social Security Administration will conduct periodic reviews to ensure that your disability is continuing and that all coverage and benefit payments are legitimate. If you are able to return to work in the future, your Medicare coverage will end; however, the SSA does provide several employment resources known as work incentives to those who have either recovered from their condition or are able to work in certain circumstances.
Is it possible to work while on disability?
Although it should be noted that people on SSDI are initially approved because they are truly unable to work for a variety of reasons, the SSA has specific rules regarding your ability to work while on disability.
Because many (if not most) people with disabilities prefer to work rather than receive benefits, the SSA will grant you a nine-month Trial Work Period to see if your earnings are substantial. A “trial work month” is defined as any month in 2023 in which earnings exceed $1,050, and the trial work period continues until you have nine cumulative trial work months within a 60-month period.
If your earnings are considered substantial by Social Security after your trial work period, your benefits will be terminated. If you earn more than $1,470 per month (or $2,460 if you’re blind) over the next 36 months, Social Security will consider your earnings substantial in 2023. At that income level, you are considered capable of gainful employment and will no longer receive cash payments. This is also known as “substantial gainful activity,” or SGA.
Remember that if you decide to return to work – or if your medical condition improves – you must notify the SSA. While you can work while receiving SSDI benefits, earning more than the $970 monthly threshold will result in a more thorough review of your situation.
Is Social Security disability income taxable?
Disability benefits from Social Security may be taxable. The rules are the same as for traditional Social Security retirement benefits. The answer is determined by your provisional (or “combined”) income, which is calculated as follows:
Provisional income = Adjusted Gross Income (AGI) + Tax-exempt interest + Half of SSDI benefits
If you are single and have a pre-tax income of less than $25,000, you will not be taxed on your SSDI benefits. If your pre-tax income is between $25,000 and $34,000, you will be taxed on half of your benefits (50%). Furthermore, if your provisional income exceeds $34,000, you will be taxed on up to 85% of your benefits.
If you file a joint return and your provisional income is less than $32,000, your SSDI benefits will be tax-free. If your pre-tax income is between $32,000 and $44,000, you will be taxed on half of your benefits (50%). Furthermore, if your provisional income exceeds $44,000, you will be taxed on up to 85% of your benefits.
While the SSA does not make this calculation easy, it is critical to understand where you stand when it comes to paying taxes after receiving any amount of disability income.
Read also: Biden’s Proposal To End Social Security And Medicare
