Social Security Disability Insurance (SSDI) is an arrangement where workers who are no longer able to work receive monthly benefits as a result of a significant impairment or illness expected to last for at least one year. SSDI is also the same program that pays retirement benefits to a majority of American citizens.
The benefits are determined by the past earnings of a disabled worker before the injury or illness. They are paid to the disabled person or their family members.
Disability insurance form with glasses and ballpoint pen.
How Much is the Disability Benefit?
Disability earnings are calculated according to the earnings of a worker before he or she was declared to be disabled. For example, is a worker used to earn an annual income of $120, he or she will get 61% of the earnings.
A person who used to earn $40,000 will earn 47% of his or her total earnings while someone who used to earn $60,000 will receive 42%.
Who Pays for Disability Insurance?
Both an employer and employee contribute to the disability insurance program. They contribute a total of 6.2% of the employees’ total earnings as of 2017. However, the amount is adjusted annually to factor in changes in the minimum wage.
Out of the 6.2 percent, 5.015 is meant for survivor benefits as well as for social security retirement. 1.185 percent goes to paying disability insurance.
The total tax contributed by both the employee and the employer is 2.37% of the total earnings. On the other hand, the total amount contributed to survivor benefits and retirement is 10.03 to a total of 12.4 percent.
How to Apply for Social Security Disability Insurance
Any American citizen working and paying social security taxes earns what is referred to as social security “work credits”. A person may earn up to four credits every year depending on their income.
For one to become eligible for social security disability insurance, they must have a certain number of work credits. The amount of work credits needed is tied on your age at the time you stopped working as a result of a disability.
Benefits for Family Members
When you start receiving the SSDI benefits, your spouse and children can also be considered for the benefits. In order to request social security disability benefits, you must do the following:
- You can apply for your DI earnings in person, through the phone or online. The most important thing is to ensure that you have met all the requirements.
- If the application goes through, you will have to with for five months before you can start receiving your benefits. You will be paid the for six months from the date you placed your request.
- You will also be enrolled in Medicare two years after you start getting your disability insurance earnings. You can appeal in case your application is rejected
In a nutshell, Social Security Disability Insurance is an important cover that everyone should have. It acts as a form of financial protection in case you get injured and unable to work. This means you will continue to earn a certain percentage of your salary as you recuperate.