Disabilities Guidebook: Social Security Disability Benefits (SSDI) and Supplemental Security Income (SSI)

Disabilities Guidebook: Social Security Disability Benefits (SSDI) and Supplemental Security Income (SSI)

Last updated: January 2014

(Chapter 7, Section 1 from Guidebook of Laws and Programs for People with Disabilities)

What Is It?
Social Security runs two programs for persons who are disabled and unable to work. Social Security Disability Insurance (SSDI or SSD) is an insurance program that provides monthly income to workers who become disabled and to certain family members. Supplemental Security Insurance (SSI) provides monthly income for people who are 65 or older, blind or disabled and who have very limited income and assets. SSI benefits are only paid to the eligible disabled person, not to dependants unless they also independently qualify for SSI. SSA has very helpful information about both these disability programs on its website.

Where to Apply?
You can apply for SSDI and SSI through the Social Security Administration (SSA). You can apply in person at an SSA office. You can start an application over the phone by calling 800-772-1213. You can apply for SSDI online. If you want to apply for SSI, you can start your application online, but you will need to complete the application at an SSA office.

Who May Be Eligible?
A worker who becomes disabled. In addition, certain family members may be eligible. These family members, with some limitations not fully described below, may include:
• The worker’s spouse, if the spouse is caring for their child who is younger than age 16 or who is disabled;
• The worker’s spouse, if the spouse is age 62 or older;
• The worker’s child if the child is younger than age 18. If the child is still in grade school or high school full time, the child can receive benefits up to age 19;
• The worker’s child who is age 18 or older, if this adult child is disabled and became disabled before age 22;
• The worker’s divorced spouse, if the divorced spouse is age 62 or older, was married to the worker for at least 10 years, and is not currently married; and
• The worker’s stepchild or grandchild, in limited circumstances.

SSI: U.S. citizens and certain legal immigrants who are financially needy and who are at least 65 years old, blind or disabled.

The Differences Between SSDI and SSI

The Social Security Administration

The Social Security Administration (SSA) is a federal government agency that administers benefits for people with disabilities. Although SSA also runs programs for people of retirement age, the focus of this section is on people with disabilities.

SSDI Is an Insurance Program

Most workers pay into Social Security while they are working. Your pay stub will show deductions for FICA, which stands for Federal Insurance Contributions Act. These deductions are payments into the Social Security fund. Your employer also makes a contribution on your behalf.

To become eligible for SSDI disability benefits, you must have insured status. To have this insured status, you must have worked long enough and recently enough before your disability. If you are age 31 or older, in general, you need to have worked for 5 of the last 10 years.

SSA counts work credits. The amount you need to earn to qualify for a work credit changes yearly. In 2012, for example, you earn one credit for each $1,130 of wages or self-employment income. SSA counts up to a maximum of four credits each year. So in 2012, once you earn $4,520, you've earned your maximum four credits for the year.

You need 20 credits earned in the 10 years prior to your disability to be insured for SSDI. So even if you worked for many years, if you have not worked for over 5 years before you become disabled, you may no longer have SSDI insured status.

Younger workers become insured for SSDI benefits with fewer work credits. See SSA’s chart for younger workers. In addition, if you become disabled before reaching age 22, you may be able to receive SSDI benefits even if you have never worked, based on the earnings record of your parent, stepparent, or adoptive parent, if they receive Social Security disability or retirement benefits or if they are deceased.

The amount of SSDI benefits you receive is based on the amount of the FICA contributions you and your employers have made on your behalf. In 2011 the average SSDI amount was about $1070. SSA has a benefit calculator online that can help you estimate your benefit amount.

If SSA finds you eligible for SSDI, you may be entitled to a retroactive benefit. In general, if you meet all the disability criteria, you are entitled to receive benefits going back to the first month following the end of a "waiting period."

The waiting period is the 5 month period starting with the first month in which you were both insured for disability and in which you meet all the disability criteria. However, the maximum retroactive benefit is 12 months of benefits before the date of application.

Supplemental Security Income (SSI) is a Financial Aid Program

You can receive SSI benefits even if you have never worked and regardless of your age when you became disabled. SSI is a financial assistance program for needy persons. For an individual, the maximum SSI benefit level is $721 per month as of January 2014, and $1082 for a couple if both spouses are eligible for SSI.

If you are entitled to SSDI benefits in an amount less than the current SSI benefit amount, you may receive an SSI payment for the difference between your SSDI benefit and the SSI benefit amount, plus $20. You may also qualify for SSI during the SSDI waiting period, described above.

Income and Asset Limits for SSI

Income Limits
To be eligible for SSI, your countable income must be less than the SSI benefit amount. Income includes money that you earn from employment and unearned income, like investment income, pensions or alimony. SSA also counts “in-kind” income related to food or shelter, like the value of room and board someone gives you free of charge.

In general, SSA does not count the first $20 per month of any kind of income. It also deducts the first $65 per month you earn from working and half the amount over $65. SSA does not count certain types of income, such as the value of SNAP/food stamps, energy assistance and federally subsidized housing assistance.

If you are working at the time you apply or at a time you claim you were disabled and unable to work, SSA may find that you do not meet the disability requirements. Returning to work after you are found disabled will impact your SSI benefits. See the section below concerning "Working While You Receive SSI or SSDI" for more information.

Asset Limits
SSA calls assets resources. Resources are things you own like real estate, stocks, bonds, CD’s, savings accounts, checking accounts, and the like. To be eligible, an individual may have no more than $2,000 in countable resources. The resource limit is $3,000 in the case of a married couple where both are eligible for SSI.

SSA does not count some types of resources. Examples of exempt resources include your home, your household goods and personal effects (to the extent that their equity value is less than $2,000), and your car, if it is used for your transportation or for a member of your household. 

Income and Asset Limits for SSDI

There are no asset limits under the SSDI program. There also are no limits under the SSDI program on the amount of unearned income you may receive. However, employment earnings affect eligibility for SSDI. If you are working at the time you apply or at a time you claim you were disabled and unable to work, SSA may find that you do not meet the disability requirements. Returning to work after you are found disabled may also impact your ongoing eligibility for SSDI benefits, although SSA has incentives to encourage persons who received SSDI benefits to try to return to work. See the section below concerning "Working While You Receive SSI or SSDI" for more information.

What is the Standard for Disability?

Who is Considered "Disabled" for SSI or SSDI benefits?

To receive disability benefits under either program, you must meet the Social Security Administration's definition of disability.

The term disability under Social Security law means that you are unable to engage in “substantial gainful activity” (SGA) because of a medically determinable physical or mental impairment which has lasted or is expected to last for at least 12 months, or is expected to result in death. This standard for disability is described in the below paragraphs.

Disability for Adults

In deciding whether you meet the disability requirement, SSA uses a five-step analysis:

Step One: Are You working?
If you are working and performing substantial gainful activity, then you are considered able to work and therefore not disabled. In 2014, the SGA limit is $1070 (after taxes) per month. If you earn more than $1070 per month, you are probably not eligible, unless there are special circumstances, for example that you have intensive job coaching to help you work despite your disability or that you work at a sheltered workshop. If you are not earning significant income, proceed to step two.

Step Two: Do You Have a Severe Impairment?
This means that you must have a medical problem which significantly limits your physical or mental ability to perform basic work activities. The impairment must be expected to last for 12 months or end in death. If you have a severe impairment, proceed to step three.

Step Three: Does Your Medical Condition Match One of SSA’s Listed Impairments?
SSA has developed a list of medical conditions that describes medical conditions so severe that SSA considers people who have the conditions disabled. SSA includes these conditions in a part of their regulations called the "Listing of Impairments." The Listings are categorized into 14 body systems (e.g., the digestive system, the respiratory system, etc.).

Each listed medical condition includes medical findings, signs, and symptoms, that must be found for your condition in order for you to meet the listing. If your condition matches one or more of the Listings, you will meet the medical criteria necessary to establish disability.

If your condition is not on the Listings, or your condition doesn’t exactly match the description of a listed impairment, but the severity of your condition meets or equals the severity of a listed medical condition, you may be found disabled at Step Three.

SSA will look to medical evidence from your doctors, hospital records, and other health related records, to find out if your condition meets or equals one of the Listings. Doctors and other health professionals review the evidence. If your doctor reviews the Listing for the condition you have, and writes a letter to SSA explaining why and how your condition meets or equals that listing in severity, you will have a much greater chance of being approved for benefits. If your condition does not meet or equal one of the conditions in the Listings, proceed to step four.

Step Four: Despite Your Medical Condition, Are You Able to Do Work You Did in the Past?
At this step, SSA determines what you are able to do despite your medical condition. SSA calls this your Residual Functional Capacity (RFC). The RFC is an assessment of your physical and mental ability to do basic work activities, like how much weight you can lift and carry, your ability to stand, walk, sit, reach, see and hear, as well as your ability to concentrate, understand and follow instructions, accept supervision, work with co-workers, and the like. SSA must base your RFC on what you are able to do on a regular and sustained basis, not what you can do only once in a while.

At this step, SSA compares your RFC with the physical and mental demands of your past jobs. In general, SSA considers only those jobs which you held for more than a few months with earnings over the substantial gainful activity level. If you are physically and mentally able to do a job that you have held within the last fifteen years, then SSA considers you "not disabled." If you are not able to perform any of your past jobs, proceed to step five.

Step Five: Despite Your Medical Condition, Are You Able to Do Other Work?
If you cannot perform your past work, then SSA decides whether you are able to perform other types of work. At step five, SSA will consider your RFC as well as your age, education, and the type of work skills you have acquired. SSA has more rigorous standards for younger persons and persons who have more education and work skills because it assumes that they will have an easier time transitioning to new work. Persons who are older and who have less education and work experience are more likely to be found disabled than persons younger than 45.

Important Note: Disability and Alcoholism or Drug Addiction

Under current law, SSA will not find you disabled and will not award you benefits if “your drug addiction or alcoholism is a contributing factor material to the determination of disability.” What does this mean? If SSA finds evidence that you are an alcoholic or that you are addicted to illegal drugs, SSA must “evaluate which of your current physical and mental limitations would remain if you stopped using drugs or alcohol and then determine whether any or all of your remaining limitations would be disabling.” In other words, SSA must decide whether you still would be disabled if you stopped using alcohol or drugs. In some cases – such as an amputation – stopping use of alcohol or drugs will have no impact. The condition will not improve if you stop drinking or taking drugs. However, for many conditions alcohol or drug use can cause problems to be worse, for example by interfering with the action of medications. If you are thinking about applying for disability benefits, STOP using alcohol or drugs, and/or seek treatment to help you stop.

The Disability Criteria for Children's SSI

Financially needy children under age 18 who have serious medical conditions may be eligible for Children’s SSI. A child is disabled for SSI if the child is not working and earning more than the SGA level and has a medical condition or combination of conditions that cause "marked and severe functional limitations." Medical evidence documenting the child’s medical condition is essential.

In evaluating whether a child is disabled, SSA uses the following four step analysis:

Step One: Is the Child Working at the Substantial Gainful Activity Level?
If the child is working and performing SGA, then SSA considers the child to be "not disabled." SSA considers the child to be performing SGA if the child is earning at least $1010 after taxes per month. If the child is not earning at that level, proceed to step two.

Step Two: Does the Child Have a Severe Medical Condition?
The child must have a "severe impairment." This means that the child must have a medical condition or combination of conditions which cause more than minimal problems in the child's ability to perform basic physical or mental activities. The impairment must be expected to last for 12 months or end in death. If the child has a severe impairment, proceed to step three.

Step Three: Does the Child’s Medical Condition Meet or Equal a Listed Medical Condition?
As with adults, SSA has determined that certain medical conditions are automatically disabling and has identified them in the "Listing of Impairments for Children."

If a child’s medical condition matches one of the Listings (or one of the adult Listings), SSA will find the child to be disabled. SSA may find a child to be disabled if the child’s medical condition is "medically equal" in severity to a listed impairment.

If the child’s condition does not meet or is not medically equal a Listing, proceed to step four.

Step Four: Is the Child’s Medical Condition Functionally Equal to One of the Listings?
If the child's condition does not meet or is not medically equal one of the conditions in the Listings, SSA may find the child to be eligible if the child's condition is "functionally equal” to a Listing.

Functionally equal means that the child's impairment or combination of impairments causes "marked and severe" limitations in the child's level of functioning, in the child’s activities at home, at school, and in the community. Although medical evidence must show the child’s medical impairment, in examining the child’s activities and ability to function, SSA will look at information from those who have an opportunity to observe the child, including teachers, parents, caregivers, social workers, counselors, etc. Evaluations for special education services and early intervention programs are also very important.

In determining whether a child has a marked and severe limitation in functioning, SSA considers the child’s level of functioning in six different “domains”: (1) acquiring and using information (2) attending and completing tasks (3) interacting and relating with others (4) moving about and manipulating objects (5) caring for self, and (6) health and physical well-being. The child meets the functional equivalence test if SSA determines that the child has two marked or one extreme limitation in any of the domains.

SSA should examine how well the child functions, including what activities the child is able to do and whether the child is independently able to initiate, sustain, and complete activities. SSA asks four key questions: (1) How does the child function? (2) Which domains are involved in performing the activities in which the child has trouble in functioning? (3) Could the child’s medically documented conditions account for the limitations in the child’s activities? (4) To what degree does the impairment limit the child’s ability to function age-appropriately in each domain? Based on the answers to these questions, SSA rates the overall severity of limitation in each domain to determine whether the child is disabled.

Applying for Disability Benefits

You can call toll free 1-800-772-1213 to make an appointment to apply at your local Social Security office. You may apply for SSDI benefits online. You can also start an SSI application online, but you will need to go into a Social Security office to complete the application.

When you apply, you will need to give SSA information about your medical conditions and treatment and how your medical conditions affect your ability to function, as well as information about your past work and your education. SSA will ask you to complete a “Disability Report” form. It is very important to complete the form providing all the information requested, listing all your past and present medical treatment. Medical evidence is very important in a disability case. No matter how sick you are, you will need medical evidence of your condition to be awarded disability benefits. Therefore, it is important to seek and follow up with medical treatment if you are thinking about applying for either SSDI or SSI.

SSA’s disability determination process, for adults or children, can take quite a bit of time. SSA has a presumptive eligibility process for some serious situations. An example would be a person who has suffered a stroke and after three months has a great deal of difficulty walking.

Persons who are presumptively eligible can receive up to 6 months of benefits while SSA evaluates their cases and makes a determination on eligibility. SSA has developed a quick determination process for situations like a terminal illness. It has expanded the quick determination process in recent years, identifying over one hundred types of medical problems, including certain cancers and rare diseases that are so serious that anyone who has the diagnosis would meet SSA’s disability criteria. Persons with these conditions should be flagged for the quick determination process. A list of these conditions is on the SSA website.

When it makes a decision on your application, SSA will send you a notice telling you whether SSA has decided that you are disabled. The notice will explain whether you will receive benefits, and if so, in what amount.

If you disagree with the decision made by Social Security, you can appeal. See the below Appeals section.

Working While You Receive SSI or SSDI Benefits

If you want to try to go back to work while you are on SSDI or SSI, it is important to try to plan ahead. You will not automatically lose your disability benefits if you go back to work. SSA has special rules called work incentives to allow you to keep all or part of your benefits while you try out your ability to work. SSA’s rules concerning work, however, are complex and can be confusing. There are agencies in Illinois that can help you plan and determine how work earnings may affect your benefits. For agencies that can help you, see the directory of agencies on SSA’s website.

Note: Be sure to let SSA know if you start a job or leave job. For SSI you must also report any changes in your monthly income, your assets, or your living situation. Changes can affect the amount of your benefit, and reporting right away will help you avoid any overpayment problems with SSA. Keep a record of any change that you report so that you can show that you made a timely report even if SSA later claims it never received it.

Working and SSDI Benefits

For SSDI, there is a “Trial Work Period” during which you can receive full benefits regardless of how much you earn, as long as you report your work activity and continue to have a disabling impairment.

The Trial Work Period is a total of nine months, not necessarily consecutive months, in a 5 year period. The term “Trial Work Period” can be confusing. SSA gives you the chance to try out your ability to work in a total of nine months without affecting your benefits; the months can be in a row or they can be spread out during the 5 year period. A month counts toward the nine month total if you earn more than a certain amount ($750 in 2014).

After the Trial Work Period ends, there is an additional 36 month period where you won’t be entitled to an SSDI monthly payment for any month in which you earn more than the SGA level ($1070/month in 2014). This period is called the "Extended Period of Eligibility" because during these 36 continuous months, you can receive your full SSDI check for any month that your earnings fall below $1070, or if you lose or become unable to continue to do your job.

If during this 36 month period, your average earnings have been at least $1070 per month on a sustained basis, SSA will continue your benefits for three more months and then will cut off all benefits. SSA can reinstate your benefits in full anytime during the 36 month period if your earnings go down below the $1070 level. If your average earnings have been less than $1070 per month on a sustained basis, your SSDI benefits will be unaffected. You will continue to receive your full SSDI payment in addition to your earnings.

After the 36 months end, if you work and your work is SGA, your benefits will end. You will not be entitled to receive benefits in months in which your earnings drop below SGA. However, you may be entitled to expedited reinstatement if you become unable to work again.

Be sure to report all work. Unreported earnings are one of the most common reasons for overpayment. Do not assume that SSA will know you are working just because you are paying FICA taxes. Your earnings record will eventually reach SSA; in fact, this is how SSA spots overpayments. However, the information will not reach SSA in time to adjust your monthly benefits when they are paid; that is why you must report your earnings to SSA.

Working and SSI

If you are receiving SSI, there is no trial work period or 36 month period of extended eligibility. If you are on SSI, your work may affect the amount of your check. However, SSA does not count the first $65/month of your earnings, plus one-half of the remainder. This means that SSA counts less than one-half of your earnings when figuring your SSI payment amount. This earned income disregard is in addition to the $20 disregard SSA allows for any type of income in figuring SSI benefits. 

  • If you receive SSI and earn $65 per month, you remain eligible for a full SSI benefit, without any reduction.
  • If you earn $317 per month and have no other income, SSA first deducts the $20 disregard that applies to any type of income ($317-20=$297). Then SSA deducts the first $65 of your earned income ($297-65=$232) and only $1 for every $2 of the remaining earnings ($232/2=$116). In this example, SSI benefits would be reduced by $116.

Keep in mind that SSA may review your eligibility for SSI benefits and decide that you are no longer disabled based on your ability to work.

If you lose your job or your wages are reduced, SSA can increase your SSI because of your reduced income. If SSA stops your SSI checks because of your earnings, but then you lose your job or your wages are reduced, you can ask SSA to start your SSI benefits again without a new application if it has been less than 12 months since you received your last SSI check. If it has been more that 12 months since your SSI stopped, you will need to file a new application for SSI and you may need to prove that you still meet the disability criteria.

Expedited Reinstatement for SSDI or SSI

If less than 5 years have passed since your benefits were stopped due to work, and you are no longer able to engage substantial gainful activity, you can ask for expedited reinstatement of your SSI or SSDI benefits. You can receive “provisional benefits” for up to six months while SSA determines whether you are eligible for benefits again.

Disability-Related Work Expenses

In figuring your work earnings for either SSI or SSDI, SSA will deduct from earnings any of your work expenses that are related to your disability. These deductions include any items or services that you pay for out of pocket that you need to work, even if the item or service is useful to you in your daily living. Be sure to keep receipts or other records of these expenses and report them to SSA.

Examples of disability-related expenses: Expenses for a service animal, prescription medicines, a wheelchair, specialized work equipment, a specialized desk, chair or computer, special transportation arrangements, a personal attendant or a job coach.

SSA Review of Continued Disability

When SSA finds you disabled, it also classifies your case according to whether your condition is likely to improve, is not expected to improve (that is, your condition is probably permanent), or it is possible that your condition will improve. Using this classification, SSA marks the case to be reviewed to determine whether you continue to be disabled.

SSA will plan to review your case in six months to 18 months if SSA expects your condition to improve; it will let you know that the case is scheduled for review in the same notice that tells you that you have been approved for benefits. An example of a case in which medical improvement is expected is a case in which disability is based on a serious bone fracture, but surgery is planned and could result in an ability to return to work.

In other cases, SSA will review the case at some point between three years and seven years after the initial decision, depending on the type of condition you have, and whether medical improvement is possible or SSA believes that your condition is likely to be permanent. SSA can also begin a disability review for other reasons, including that you return to work.

If SSA is reviewing your case to decide if you still are disabled, SSA will send you a letter letting you know that the review is taking place. You will have a chance to submit medical evidence to show that you still are disabled.

When SSA reviews your case, it starts by evaluating whether your condition has medically improved. Therefore the fact that you have done some work since being found disabled will not automatically mean that you are no longer disabled. On the other hand, SSA may consider your work and the tasks you perform in deciding whether you are still disabled.

The fact that SSA will be reviewing your case after you are found disabled is one important reason that, even after you are approved for disability, it is important to continue to get medical care, and to follow your doctors’ recommendations, unless there is a good reason not to follow those recommendations. This will help ensure that you have the medical evidence you need when your case is reviewed. In addition, failing to follow treatment prescribed by your doctor can be a basis for ending your benefits.

After the continuing disability review, if SSA decides that your disability has ended, you will have the right to file a request for reconsideration, and to keep receiving benefits while your appeal is pending. NOTE: Although you have 60 days to file an appeal in general, you only have 10 days to file an appeal and request that your benefits continue during your appeal. If you receive a notice terminating your benefits, act quickly to appeal. Benefits generally can continue through the appeals process through the date of an ALJ hearing decision, provided you request that benefits continue during your appeal. See the below Appeals section.

Plan for Achieving Self Support (PASS)

A Plan for Achieving Self Support (PASS) is a special program that allows SSI recipients to set aside income and assets needed to achieve a specific work goal. The money and assets set aside will not act to reduce your SSI payment. The goal of your plan may be to start a business or get a job.

To develop a plan, you first set a work goal. Figure out what you need to reach that goal, such as training, materials, car, tools, etc., and determine the cost of these items or services. Your plan to achieve your work goal may require vocational training or a college education. If so, be sure to include expenses for such training and education. When you have your plan and the expenses, you can complete the PASS application. See the SSA website for the form application.

You can get help with setting up the PASS plan from a vocational rehabilitation counselor, an organization that helps people with disabilities, or the local Social Security office. You submit the completed application to the local Social Security office.

An SSA representative trained in developing PASS plans will review the plan to determine if it is reasonable. SSA’s representative should work with you, discussing the plan and making changes if necessary. The completed plan must be in writing, state your work goal, contain a reasonable time frame for completion, and include the expenses that are necessary to achieve your work goal. If your plan is not approved, you can appeal that decision, or you can submit a new plan.

If your plan is approved, you can then set aside some of your income and/or assets to be used toward meeting your PASS goals. The funds set aside will not affect your eligibility for benefits. You should place the money in a separate bank account so that you will be able to easily account for the funds. You should always keep a receipt when you use the money for expenses allowed under your PASS plan. SSA may contact you from time to time to make sure that you are doing what the PASS plan says and that you are on track to reach your goal. If you need to change your PASS plan, you must tell the SSA office in writing about the changes and the reasons, and receive approval.

You should contact your local SSA office if you would like more information about creating a PASS plan.

How Working Affects Medicaid

If you are eligible for SSI benefits, you will usually also be eligible for Medicaid coverage. For information about Medicaid, see the section of this guidebook titled "Medicaid for Adults," in Chapter 9, Section 2. However, Medicaid is a "needs based" program, which means that you can lose your coverage or a have a "spend-down" if you have income other than SSI. There are several ways you can continue to get medical assistance even if you are working.

Under a special program called "1619(a)" you can continue to get Medicaid coverage without a spend-down, if you are working but your work earnings are not high enough to stop your SSI benefits. To be eligible for 1619(a) Medicaid coverage, your earnings must be more than $1010 per month and you must still be receiving some SSI benefits. The earned income disregards that apply in the SSI program may make this possible. When this happens, SSA should automatically put you in the 1619(a) program and should notify the Illinois Department of Human Services (DHS) of your participation. DHS should continue your Medicaid eligibility without a spend-down. You should seek legal help if DHS stops your Medicaid or tells you that you will have a spend-down.

If your earnings are too high to continue to qualify for SSI, you may still qualify for Medicaid under the special "1619(b)" program. Under this program, you can keep your Medicaid coverage without a spend-down if your earnings are less than a certain limit, currently $27,435 per year (2012 amount). To be eligible under 1619(b), you must:

• Have been eligible for SSI for at least one month before starting work
• Continue to be disabled
• Need Medicaid coverage to be able to work
• Earn less than a certain limit ($27,435 in 2012) and
• Continue to meet the SSI rules on assets

If you think you might be eligible for 1619(b) benefits, you should ask your SSA to perform an evaluation and to notify DHS if you are eligible. Your Medicaid benefits should not be terminated until SSA makes a 1619(b) determination. You should seek legal help if DHS stops your Medicaid or tells you that you will have a spend-down.

Health Benefits for Workers with Disabilities (HBWD)

Even if you are not eligible for these Medicaid programs, if you are working, but still have a disability, and you are under age 64, you may qualify for Health Benefits for Workers with Disabilities (HBWD). HBWD provides the comprehensive health coverage offered under the Medicaid program. Workers with countable income of up to 350% of the federal poverty guidelines (in 2012, $3,159 per month for a single person and $4,250 per month for a couple) may qualify for the program.

Unlike other Medicaid programs, under HBWD you can have up to $25,000 in assets. You will need to pay a monthly premium. The amount depends on your income. For example of the monthly premium, if your earned income is $2200/month, and you have no unearned income, your monthly HBWD premium in 2012 would be $50.

HBWD is often used by persons with disabilities to avoid a Medicaid spend-down. If you are working and have Medicaid spend-down, you should explore applying for HBWD. In most cases, the premium you would pay for HBWD will be less than your spend-down amount.

How Working Affects Medicare

If you have been eligible for SSDI benefits for 24 months or more, you will usually also be eligible for Medicare coverage. For more information about the Medicare program, see the section of this guidebook titled "The Medicare Program," in Chapter 9, Section 4.

After the initial 24 months waiting period, you will remain eligible for Medicare as long as you receive an SSDI check. If you work and never earn enough money to stop receiving an SSDI check, your Medicare will continue along with your SSDI checks. Even if you return to work and earn enough to stop your SSDI checks, Medicare will continue for several years. You will remain eligible for Medicare during the 9 month Trial Work Period and your 36 month Extended Period of Eligibility. After the Extended Period of Eligibility, even if you lose your SSDI benefits, you will be eligible for Medicare for at least a total of 93 months after the completion of the Trial Work Period. This is called “Extended Medicare.” The local SSA office can tell you the exact time period of your “Extended Medicare” coverage.

After the Extended Medicare period ends, if you are still "disabled" but not yet age 65, you may buy Medicare Part A and Part B coverage. This will cost the same as the amount paid by uninsured, eligible, retired beneficiaries.

Representative Payee

In certain situations, SSA will send the benefit payments to a "Representative Payee" instead of to you. For children under 18 (unless emancipated) and for adults who are unable to manage their own benefits, SSA requires that benefits be paid to a representative payee. For adults, SSA should base its decision to require a representative payee on medical evidence or on another sound basis, like a court finding that the recipient is unable to manage his own funds.

Payee Responsibilities

A representative payee is required to use your monthly benefit to pay your expenses each month, including rent, utilities, telephone, food, clothing, transportation costs, medical co-pays, etc. If the benefit payments exceed your needs, the payee is required to save the extra money in a safe manner, like savings bonds or a savings account, separate from the payee’s own funds. SSA requires payees to file periodic reports explaining how the money has been spent or invested, and can require receipts or other proof.

A payee must notify SSA about any facts that may affect your eligibility for benefits or the amount of benefits. This includes such things as other sources of income you receive, changes in address, work activity, death, marriage, or if you move to or from a hospital, nursing home or other institution. You need to report these changes yourself if the payee does not do so. SSA can hold a payee personally responsible for benefits that are overpaid due the payee's failure to provide such notice to SSA.

Selecting the Representative Payee

If you are under age 18: For a child with a disability, the natural or adoptive parent or legal guardian caring for the child is the preferred payee. If that person is not appropriate, SSA may consider a parent or adoptive parent who is not living with the child but who is helping support the child or is otherwise strongly involved with the child. SSA may also consider another relative or stepparent who is caring for the child or is concerned with the child's well being. If no such person is available, SSA may appoint a social agency or institution as payee.

If you are over age 18: You have the right to request that a person you choose be appointed as your representative payee. Although there are no specific qualifications that a representative payee must have, the payee cannot have been convicted of a felony. The payee should be someone who sees you on a regular basis and someone you can easily contact if you need something. SSA has guidelines ranking the potential payees and generally prefers a spouse or other relative who lives with or who has a strong concern for the person's welfare. If no such person is available, SSA will consider making a close friend the payee. If no such person is available, SSA may appoint an agency or institution as payee.

Compensating the Representative Payee

It is sometimes difficult for SSI or SSDI recipients to find someone who is willing and able to be their payee. When that happens, a social service agency may be available to be the payee. In order to encourage these agencies to serve as payee, the SSA will allow them to charge a fee of up to $25 per month. The agency must get written approval from the SSA before the agency can collect any fee.

The SSA rules do not allow any type of payee other than an approved social service agency to collect any fee for their services as payee.

Objecting to Representative Payment

If SSA plans to make representative payment, they will send you a written notice telling you. If you feel that you do not need a payee, or if you object to the proposed payee, you may request a personal conference with staff at your local SSA office to present more information. You will then receive a written determination. If you disagree with the determination, you may request Reconsideration, and pursue an appeal through all of the stages of appeal, see the Appeals section described below.

Ending Representative Payment

At any time, you can ask the SSA to terminate representative payment if you can show that you are physically and mentally capable of handling your own funds. You will be required to present a statement from your doctor or other proof. If you have a legal guardian, SSA cannot stop representative payment unless you obtain a court order restoring your legal right to handle your funds.

Changing the Representative Payee

SSA may appoint a new payee if the payee dies, is unable to serve, or simply no longer wishes to be the payee. Also, SSA may remove the payee at any time that the payee fails to properly serve your interests, or if a more appropriate person to serve as payee becomes available. You should notify your local SSA office if you feel the payee should be changed. Your benefits may be interrupted if your payee is removed and a new one is not immediately available to take his or her place.

Special Rules for the Representative Payee of a Child Receiving SSI

A representative payee caring for a child who receives SSI has the responsibility to make sure that the child receives medically necessary care for the disabling condition. SSA can remove the payee if he or she fails to seek this care without good cause.

Dedicated Accounts for Retroactive SSI Benefits of Disabled Children

When a child's claim for SSI is approved, SSA must determine whether the child is eligible for retroactive SSI benefits – benefits for the time from the application for SSI to the time the claim is approved. If the child is entitled to a lump sum back benefit award that equals six times the maximum benefit amount ($698 in 2012), those benefits must be placed into a special separate bank account. This special account is called a "dedicated account." Any interest earned must remain in the account.

The parent or payee may use the money in the account only for items or services directly related to the child's disability. This includes medical care, education and job skills training, modifications to a home, personal needs assistance, special equipment, therapy or rehabilitation care. It is not a good idea for the parent/payee to deposit other money, like their own money, into the account, since any money in the account is subject to SSA’s limits on use.

A parent or payee should get pre-approval from SSA before taking any money from the account for an item or service other than those listed above. The parent or payee can be required to repay from their own money, any money used from a child’s dedicated account that SSA determines is not related to the child's disability.

Overpayment of Benefits

It is fairly common for SSI and SSDI recipients to receive a notice that they have received benefits to which they were not entitled. This is called an "overpayment." Usually, SSA will require you to pay back any overpaid benefits, and SSA will reduce your current benefits until the money is paid back. SSA has other ways to collect overpayments too. For example, if you file taxes and expect a refund, the government may take that refund to recover the overpayment. Overpayments commonly occur when recipients have new sources of income and their benefits are not promptly reduced. If you don’t promptly report changes in your circumstances that affect your benefits, like your income, work status, marital status, assets or living arrangements, you may also receive an overpayment.

If you receive a notice of overpayment, you have the right to appeal. You should file an appeal if you believe that SSA is wrong in saying that you received an overpayment, or if you believe that the amount of the overpayment is less than SSA claims. The deadline for filing an appeal is 65 days from the date on the notice of overpayment. See the below Appeals section.

Even if you agree that you received an overpayment, you can ask that you not be required to pay the money back. This is called a "Request for Waiver of Recovery of Overpayment," commonly called a "waiver." You may request a waiver at any time, by completing a written form available at your local SSA office.

In order to qualify for a waiver, you must prove that you were not responsible for causing the overpayment. In other words, you must show that you did your best to properly report all necessary information to SSA, and that you did not accept benefits that you knew you were not entitled to receive. In addition, you must also show that it would be unfair to make you pay back the money, either because you cannot afford to do so, or because you have taken certain actions thinking that you were entitled to the overpaid benefits.

You should clearly explain your side of the story when you file a request for a waiver. Staff at the SSA office can help you complete the form. You are entitled to file an appeal if your request for a waiver is denied. SSA must stop collection action while your appeal is pending, even if SSA has already started to collect the overpayment.

How to Protect or Enforce Your Rights: Appeals

Decisions That You Can Appeal

SSA denies many applications for disability benefits, even for people who truly have disabilities and are eligible for benefits. Denials often occur only because there was not enough medical evidence to prove that the applicant had a disabling problem. More than 50% of appeals are successful. If SSA denies your claim, strongly consider filing an appeal. Many people give up, wait a period of time, and reapply. In most cases, it is a better decision to file an appeal rather than to wait and to reapply.

You should also consider appeals in other circumstances. You can appeal if you believe that SSA wrongly reduced or terminated your benefits or if SSA takes other wrongful actions against you, such as finding that you owe an overpayment or requiring that you have a representative payee.

If you are already receiving disability benefits, and SSA sends you a notice to reduce or terminate your benefits, you may be able to keep your benefits while you appeal. You will need to act quickly to appeal, usually within ten days of receipt of the notice, and indicate on the appeal form that you wish to continue to receive your benefits during the appeal. For example, if SSA decides you are no longer disabled, and sends you a notice to discontinue your benefits, you may choose to keep your benefits until an ALJ issues a decision.

There levels of the Appeal Process are as follows:

Requests for Reconsideration

Whenever SSA decides to deny your application, or to reduce or terminate your benefits, the agency will send you a notice. You have 65 days from the date on the notice in which to make a written "Request for Reconsideration." At the reconsideration stage, SSA will then review your claim again and may ask you to submit to further medical examination. At this stage, be sure to let SSA know about any treatment or doctor’s visits you had since you applied. Also, look at the notice SSA sent you, and its description of the sources of medical information it considered in making its decision. If information from some of your treating doctors or some hospital records are not listed, but would help show your disability, be sure to let SSA know so that it will get the missing records and consider them at this stage of appeal.

Request for an ALJ Hearing

If you are denied after Reconsideration, SSA will send you another notice. You have 65 days from the date on that notice to make a written request for a hearing before an Administrative Law Judge (ALJ). ALJs are administrative judges hired by SSA to conduct hearings.

If you request an ALJ hearing, you can appear with witnesses and testify about your problems and how they affect you. The ALJ may arrange for a medical expert or a vocational expert to attend the hearing and offer testimony relevant to your case. After the hearing, the ALJ will notify you in writing of the hearing decision and explain the reasons for the decision. You may not receive the decision for several months.

Establishing disability under SSA’s rules is a complex process. It is important to give the ALJ all the medical and other information that shows you meet the disability criteria. You do not need to have a lawyer, but it can be very helpful to have a lawyer represent you at the hearing to show how you meet the criteria.

A large percentage of cases are approved at the ALJ hearing stage of the appeal process.

Request for Review by the Appeals Council

If the ALJ decision is not favorable, you can appeal again to the Appeals Council. You have 65 days from the date of the ALJ's notice to make a written request for review by the Council.

At this level, review is somewhat limited. The Appeals Council will review the ALJ hearing record and the ALJ decision to see if the ALJ made an error of law, his decision was not supported by substantial evidence, or there was an abuse of discretion. You can explain all the reasons you want the Appeals Council to consider when you submit your request for review, or in your request for review you can ask the Appeals Council for additional time to submit a written argument in support of your appeal. You may also submit new evidence for the period up to the date of the ALJ's decision. You will need to explain that the evidence was not available to you earlier.

The Appeals Council can say that the ALJ was correct in his decision, can approve your claim, or can send your case back to the ALJ with instructions on how the ALJ should handle your case. In some cases it may make more sense to reapply rather than appeal to the Appeals Council. It would be helpful to consult a lawyer to review the best option for you in this situation.

Lawsuits in U.S. District Court

If the Appeals Council upholds the ALJ's denial of your claim, you have 60 days to file a lawsuit. You may file a civil action in U.S. District Court where you live within 60 days after you receive notice of the Appeals Council's decision. Filing a federal lawsuit is a big task, and consulting an attorney is highly recommended. Some federal courts have programs to provide general information to persons who want to file a lawsuit but don’t have a lawyer.

This level of appeal is also very limited. The judge will review your case to see if the Appeals Council fairly considered all of the evidence and properly applied the law. In general, you cannot introduce new evidence at this point. You may file a written argument in support of the case.
The judge can approve your claim, deny your claim, or remand your case to the ALJ to be evaluated in accordance with the judge's instructions.

How to File an Appeal with SSA

To file a request for reconsideration, request an ALJ hearing or request review by the Appeals Council, you can call SSA’s toll-free number, 800-772-1213, or go to your local SSA office. Tell the representative you want to appeal the decision made on your case, and explain what the decision was. Have the decision in front of you when you call. If you go to the SSA office, take the notice of decision you are appealing with you.

SSA also offers an option to appeal a disability denial on line, including a request for reconsideration or a request for a hearing before an ALJ online. Currently, you cannot request Appeals Council Review online.

Missing an Appeal Deadline

At each stage of the appeal process described above there is a time limit within which you must file an appeal. If you miss that deadline, SSA will consider your appeal only if you show that you had "good cause" for the delay.

Good cause includes such things as serious illness which prevents you from attending to your business, a death in the family, or a fire or other emergency which disrupts your home. Good cause also includes situations where you do not understand or know about the need to file an appeal because of your physical or mental condition, or because of your inability to read or communicate.

If you realize that you have missed an appeal deadline, you should file your appeal in writing as soon as possible. You should include with your appeal a written explanation of the reason why the appeal was not filed in time and a request for an extension of time in which to file the appeal.

Representation in the Appeal Process

You may be represented by a lawyer, a paralegal, or a friend or relative in the appeal proceedings. Only a lawyer can represent you in proceedings in federal court.

Fees for Legal Representatives

Your representative may charge you a fee for services. The representative must file a written request with SSA seeking approval for the amount of the fee. The representative cannot collect a fee in an amount greater than the amount approved. SSA will consider the complexity of the case, the amount of time involved, and your representative's skill when deciding the amount of the fee.

If you are represented by a lawyer who helps you obtain benefits and you are awarded retroactive benefits, SSA can pay your lawyer directly out of your retroactive benefits. The amount withheld for your lawyer's fee will be no more than 25% of your retroactive benefits.
Example: If in January 2012, SSA decides that you were eligible for SSDI payments as of October 2010, in the amount $750 per month, you will be entitled to $12,000 in retroactive benefits. SSA can pay your lawyer up to $3,000 directly out of your retroactive benefits.

Many lawyers are willing to represent people in disability cases. For further information about resources for legal assistance, see the section of this guidebook titled "Legal Advocacy for People with Disabilities," in Chapter 16, Section 5.

Where to Go for More Information

Statutes and Regulations

The federal statute relating to the Social Security Disability Insurance (SSDI) program can be found at 42 USC § § 405, 423. The federal regulations for that program can be found at 20 CFR Part 404.

The federal statute relating to the Supplemental Security Income (SSI) program can be found at 42 USC § 1381. The federal regulations for that program can be found at 20 CFR Part 416.

Other Information

To apply for benefits or to file an appeal, contact your local Social Security office, or call (800) 772-1213(v) or (800) 335-0778 (TTY) for information and assistance.

More information can be found at the Social Security Administration's website.

Helpful Organizations
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