Social Security Disability Benefits

Social Security disability benefits provide monthly income replacement for disabled individuals who can no longer work due to their condition. According to the World Health Organization, one in six people worldwide develop a serious disability in their lifetime. As of December 2022, 11.5% of Social Security beneficiaries are disabled workers.

The average Social Security disability benefit was $1,483 in December of 2022. Disability benefits receive a cost-of-living adjustment (COLA) each year to account for inflation. In 2023, the COLA increased to 8.7%. The Social Security Administration projects average disability benefits to increase by at least $140 in 2023, due to the COLA.

Adding $140 to the average disability benefit from December 2022 can give you the projected average disability benefit amount in 2023 — which would be $1,623 a month.

There are two main types of Social Security Benefits — Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). SSI is for older adults or children with a disability or blindness, who also have lower incomes and resources. SSDI is for disabled individuals who have a qualifying work history and are unable to continue working due to their disability.

There are several key factors to keep in mind when comparing SSI and SSDI.

*These are the maximum monthly Federal amounts for SSI in 2023, and your monthly benefit amount can vary.

While SSI and SSDI are different programs, the medical requirements to be considered disabled to qualify are the same. The Social Security Administration has a definition of disability that must be met if you want to qualify for SSI or SSDI (due to a disability).

Each Social Security disability program is funded through different sources. The SSI program is funded through general tax revenues — not your Social Security taxes.

The SSDI program is funded through your payroll taxes. To receive SSDI benefits, you must have worked for a specific number of years and have contributed to the Social Security trust fund in the form of Social Security taxes.

In 2023, when you work, about 15 cents goes to a trust fund that covers SSDI benefits to people with disabilities and their families.

SSI provides low-income individuals that are either aged, blind or disabled with a monthly benefit to offer financial stability. You must be a U.S. citizen and not confined to an institution to qualify. As of 2023, SSI provides benefits to over 7 million individuals.

“SSI does not have a waiting period, but your earliest cash benefit date is the date that you applied. This is known as your Protective Filing Date,” Travis Price, a Disability Case Consultant told RetireGuide.

When considering income, SSI separates income limits into two categories — earned and unearned. Earned income is your wages and net earnings from self-employment.

Unearned income refers to money from your Social Security benefits, workers compensation, unemployment, rent and other income that isn’t earned. Your limit for unearned income for an individual is less than $934 a month, or $1,391 for a couple, in 2023.

It’s also noteworthy to mention that SSI can provide financial aid if you’re experiencing homelessness. SSI can help you get housing by providing you monthly payments, even if you don’t currently have a residence.

SSDI provides monthly benefits to disabled workers who have paid taxes long enough to earn enough credits to qualify. You earn credits by working. In 2023, you earn one credit for each $1,640 in wages or self-employment income. You can earn up to four credits in one year.

Generally, you need 40 credits to qualify. However, you can qualify for SSDI with less credits if you’re younger.

Unlike SSI, there is a waiting period to receive your benefits for SSDI. “The standard waiting period for SSDI approval cash benefits is 5 full months. For example, if you are approved on July 13, 2022, you would not receive benefits until Jan. 1, 2023. July 2022 is not a full month, so your waiting period starts in August,” Travis Price, a Disability Case Consultant told RetireGuide.

You should also refer to the Social Security’s disability evaluation list to see if your disability qualifies. The list consists of musculoskeletal disorders, respiratory disorders, mental disorders and more. Even if you don’t see your condition listed, it is still possible to be approved for SSDI benefits, though it will likely be a lengthier process.

According to the U.S. Chamber of Commerce, short-term disability insurance commonly covers around 80% of your income, while long-term benefits cover closer to 60%.

The Social Security Administration does not provide benefits for those with a short-term disability. They only provide benefits for long-term disabilities that meet their strict definition of disability.

However, this does not mean you’re out of luck if you have a temporary disability. There are state programs and insurers who can provide you with benefits if needed. For example, the State of California’s Department of Industrial Relations has a temporary disability benefit that will cover two-thirds of your gross pre-tax wages you lost or will lose while recovering from a job injury.

However, not all states have short-term disability benefits. Only New York, California and Rhode Island are legally required to offer all employees short-term disability coverage.

You can apply for Social Security benefits in one of three ways — apply online, call the Social Security office or find a local Social Security office near you and apply in person. Make sure you apply as soon as possible to avoid delays in benefits.

Before applying, make sure you have all needed documents. The Social Security Administration has a checklist you should review before starting your disability application.

Travis Price, a Disability Case Consultant, spoke to RetireGuide about possible scenarios that could hinder your application process. “Sometimes people give too much information that does not help their case but has to be developed. For example, they may go to the doctor for a standard follow-up, but no new treatment or conditions arise from that visit. Reporting that information to Social Security requires that the Disability Examiner request that information. On average, requesting additional medical records can add an additional 30-90 days of processing time to your claim,” Price told RetireGuide.

Generally, it should take three to five months to get a response back from Social Security to see if your disability application was approved or not.