Social Security Disability Insurance

Social Security Disability Insurance (SSD or SSDI) is a payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide income supplements to people who are physically restricted in their ability to be employed because of a notable disability (usually physical). SSD can be supplied on either a temporary or permanent basis, usually directly correlated to whether the person's disability is temporary or permanent.
People frequently confuse Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Unlike SSDI (as well as retirement benefits) where payment is based on contribution credits earned through previous work and therefore treated as an insurance benefit without reference to other income or assets, SSI is a means-tested program for people (either disabled, blind, or 65+) whose have not accrued enough credits to provide a sufficient monthly amount to live on through SSD or retirement benefits. A legitimately disabled person (a finding based on legal and medical justification) of any income level can receive SSD. ('Disability' under SSDI is measured by a different standard than under the Americans with Disabilities Act.) Most SSI recipients are below an administratively mandated income threshold, and these individuals must stay below that threshold to continue receiving SSI, unlike with SSD.
Informal names for SSDI include Disability Insurance Benefits (DIB) and Title II benefits. These names come from the chapter title of the governing section of the Social Security Act, which came into law in August 1935. In July 1956, after two decades bouncing around Congress, the Social Security Disability Insurance program was put into effect.
Usage.
At the end of 2011, there were 10.6 million Americans collecting SSDI, up from 7.2 million in 2002. The share of the U.S. population receiving SSDI benefits has risen rapidly over the past two decades, from 2.2 percent of adults age 25 to 64 in 1985 to 4.1 percent in 2005. According to David Autor and Mark Duggan, aging and changes to the overall health of the U.S. population have had a small effect at most on SSDI usage.
In a 2006 analysis, Autor and Duggan state that the most significant factor in the growth of SSDI usage has been the loosening of the screening process that took place in 1984 following the signing of an SSDI reform act into law; this directed the Social Security Administration to relax screening of mental illness, place more weight on applicants' reported pain and discomfort, consider multiple non-severe ailments to be disabling, and give more credence to medical evidence provided by the applicant's doctor. These changes had the effect of increasing the number of new SSDI awards and shifting their composition towards claimants with low-mortality disorders such as mental illness and back pain.
According to Autor and Duggan, a second factor in increased SSDI usage was the rising value of SSDI benefits relative to what recipients would have earned from employment. According to this report, a low-income older male SSDI recipient in 1984 would have received from benefits about 68% of the income he would have earned by working; by 2004, due to increasing income inequality, the same man would have received from SSDI benefits 86% of what he would have earned through employment.
Autor and Duggan argue that because the definition of disability adopted in 1984 is quite broad, the SSDI program often functions in practice as an insurance program for unemployable people. Other researchers, however, do not agree with Autor and Duggan's explanation for the increase in Americans getting social security disability. The Center on Budget and Policy Priorities has found demographic factors such as population growth, aging of the baby boom generation, growth in women's labor force participation, and the increase in Social Security's full retirement age from 65 to 66 to be the primary factors in higher rates of SSDI program usage.
In December 2014, the SSDI program insured approximately 10.9 million beneficiaries including disabled workers and their spouses and children.
In April 2019, the Social Security Trustees reported that under current law, "the DI Trust Fund reserves [will] become depleted in 2052 and the OASI Trust Fund reserves [will] become depleted in 2034".
Treating physician rule.
The usage has been affected by the "treating physician rule" which gives "controlling weight" to determinations of the treating physicians. The rule was established in 1991 by the Social Security Administration (SSA) under the influence of federal courts and a law passed by Congress after the SSA was scrutinized in the 1980s for controversially relying largely on its own medical examiners. Prior to the codified rule, federal courts had imposed a similar rule through a common law, but it was inconsistent.
On January 18, 2017, the security administration published final rules titled "Revisions to Rules Regarding the Evaluation of Medical Evidence" regarding the "treating physician rule". These new rules regarding the assessment of medical opinions in a social security disability case apply to cases filed after March 27, 2017. While these new rules expand the definition of what social security considers to be an "acceptable medical source" for disability claim medical opinions to include nurse practitioners, physician assistants, and others, they also have effectively abolished the "treating physician rule" by eliminating the requirement that a treating physician opinion be granted "controlling weight".
Payment amount.
The amount that each recipient receives monthly is based upon an average of past earnings. The calculation is based on the average indexed monthly earnings (AIME) which is used to calculate the primary insurance amount (PIA). In 2017, the average monthly disability payment was $1171, and the maximum monthly benefit was $2,687.
Qualification.
According to the Social Security Administration (SSA)
The work requirement is waived for applicants who can prove that they became disabled at or before the age of 22, as these individuals may be allowed to collect on their parent's or parents' work credits. The parent(s) experience no loss of benefits.
Medical evidence is signs, symptoms and laboratory findings and is required to document the claim. Symptoms, such as pain, are considered but must be reasonably expected to come from a medically determinable impairment which the claimant is diagnosed to have. The decision is based on a sequential evaluation of medical evidence. The sequence for adults is:
Medical evidence that demonstrates the applicant's inability to work is required. The DDS or ALJ may also require the applicant to visit a third-party physician for medical documentation, often to supplement the evidence treating sources do not supply. The applicant may meet a SSA medical listing for their condition. If their condition does not meet the requirements of a listing, their residual functional capacity is considered, along with their age, past relevant work, and education, in determining their ability to perform either their past work, or other work generally available in the national economy.
Determination of a residual functional capacity—made in the fourth step in the sequential evaluation process—often constitutes the bulk of the SSDI application and appeal process. A residual functional capacity is assessed in accordance with Title 20 of the Code of Federal Regulations, part 404, section 1545 by a disability determination service (DDS) or, on appeal, by an administrative law judge (ALJ), and is generally based upon the opinions of treating and examining physicians, if available.
Residual functional capacity (RFC) is classified according to the five exertional levels of work defined in the Dictionary of Occupational Titles, which are: Sedentary, Light, Medium, Heavy, and Very Heavy. If the residual functional capacity of an individual equals the previous work performed, the claim is denied on the basis that the individual can return to former work. If the residual functional capacity is less than former work then the RFC is applied against a vocational grid that considers the individual's age, education and transferability of formerly learned and used skills. The vocational grid directs an allowance or denial of benefits.
Legal representation.
Applicants may hire a lawyer or non-attorney representative to help them apply or appeal. There are two primary types of organizations: companies with trained specialists experienced in handling SSDI applications and appeals in some or any local community across the country and law firms which specialize in disability-related cases.
Most SSDI applicants—about 90 percent according to the SSA—have a disability representative for their appeal. An August 2010 report by the Office of Inspector General for the Social Security Administration indicated that many people submitting an initial disability application for SSDI might benefit from using a third-party disability representative when they first apply for benefits. It indicated that having a disability representative earlier in the process significantly improves the chances of those with four major types of disabilities getting approved for SSDI.
The fee that a representative can charge for SSDI representation is set by law and is limited to 25 percent of the retroactive SSDI benefits awarded. While some representatives may charge fees for costs related to the claim, such as photocopy and medical record collection expenses, the vast majority of disability attorneys and representatives do not charge a fee unless they win the case. Prior to 1991, social security administration regulations required attorneys and representatives to submit a "Fee Petition" itemizing time spent on the matter. The SSDI applicant had the opportunity to agree or object to the fee requested, and the social security decision-maker often approved less than the full fee amount requested by the attorney/representative.
In 1991 the social security administration implemented the "Fee Agreement" process. If the attorney/representative contract limited the fee to no more than $4000, a detailed review and approval of time spent on the case via the "Fee Petition" process was no longer required. Social security regulations require that the fee agreement conform to specific standards. This attorney fee cap for the "Fee Agreement" process was increased to $6000 effective June 22, 2009. Because of the reduced administrative burden afforded by the "fee Agreement" process, and the time delay for approving and disbursing fees under the "Fee Petition" process, the majority of disability lawyers and representative primarily use the "Fee Agreement" process.
If an SSDI applicant is approved quickly and does not receive a retroactive award, the SSA must review and approve the fee a representative will charge the individual. Disability representatives do not charge a fee if they are unsuccessful in obtaining a claimant's disability benefit.
Representatives may decline to represent you if, after reviewing your situation, they do not believe you are likely to meet the requirements for SSDI. Most representatives will provide this screening at no cost to you. Typical reasons individuals do not meet the requirements are: their disability is not severe enough or the applicant does not have a sufficient work history (and did not pay enough into FICA - the Federal Insurance Contributions Act).
Wait time for applications.
The amount of time it takes for an application to be approved or denied varies, depending on the level of the process at which the award is made. In 2009, there were 2,816,244 applications for SSDI. As of March 31, 2007, the number of pending applications (or "backlog") was 1,463,153.
The Social Security Administration estimates that the initial benefits application will take 90 to 120 days, but in practice filings can take up to eight months to complete. The appeals process for denied filings can likewise take 90 days to well over a year to get a hearing, depending on caseloads. At the initial application level the claim actually takes as long as it takes to get medical treating sources to respond with sufficient medical evidence to document the disability claim.
In an attempt to speed up the application process, beginning in August 2006, the SSA implemented changes to the application process in the six-state New England region, on a trial basis. On December 1, 2007, the SSA implemented the program nationwide.
Timetable.
The SSA provided a table of average wait times which were current through the end of fiscal year 2009. These times include awards and denials.
Military service members can receive expedited processing of disability claims from Social Security. Benefits available through Social Security are different from those from the Department of Veterans Affairs and require a separate application. The SSA also has an expedited processing program for certain conditions designated as receiving compassionate allowances.
The expedited process is used for military service members who become disabled while on active military service on or after October 1, 2001, regardless of where the disability occurs.
Likelihood of receiving benefits.
Nationwide statistics provided by the SSA in 2005 stated that 39 percent of all SSDI applications are approved at the state level by Disability Determination Services (DDS) (including determinations made at both the initial and, in non-prototype states, reconsideration steps).
For each step, the approval and appeal rates appear to be the following:
Payee assignment.
Generally, the person qualifying for benefits is determined to be capable of managing their own financial affairs, and the benefits are disbursed directly to them. In the case of persons who have a diagnosed mental impairment which interferes with their ability to manage their own finances, the Social Security Administration may require that the person assign someone to be their representative payee. This person will receive the benefits on behalf of the disabled individual, and disburse them directly to payers such as landlords, or to the disabled person, while providing money management assistance (help with purchasing items, limiting spending money, etc.). The representative payee often does not charge a fee for this service, especially if it's a friend or relative. Social service agencies who are assigned as payee are NOT prohibited from charging a fee, although the maximum fee is set by Social Security. The fee is the same for ALL recipients, except it can be larger for those with severe substance abuse problems (Social Security determines when a higher fee can be charged, not the representative payee.) Some states and counties have representative payee agencies (also called substitute payee programs) which receive the benefits on behalf of the disabled person's social worker, and disburse the benefits per the social worker's instructions. A payee can be very helpful in the instance of homeless individuals who need assistance paying down debts (like utility bills) and saving for housing.
Impact.
According to a 2021 study, which used variation induced by an age-based eligibility rule as a way to draw causal inferences, SSDI substantially reduced the financial disstress of disabled individuals. The study finds that SSDI "reduces the likelihood of bankruptcy by 20 percent, foreclosure by 33 percent, and home sale by 15 percent."