People with Disabilities May Underestimate Benefits of SSDI

Editor: The folks at Allsup point out that people with disabilities often are very misinformed about SSDI, and that lack of understanding can cost them!

~~~~~~~~~~~~~~~~~

June 2008

Qualifying for Social Security Disability Insurance Affects More than Monthly Income; Allsup Outlines Eight Benefits of SSDI

Individuals who become disabled regularly encounter a number of choices and new challenges, including treatment for their injury or chronic illness. Allsup, which represents tens of thousands of people in the Social Security Disability Insurance (SSDI) process each year, finds people often underestimate and lack information about the benefits of SSDI.

One example is that many people think SSDI benefits are means based, or only available to individuals with little or no income.

"Allsup often gets calls from people who have been forced to quit working because of a disability," said Paul Gada, a tax attorney and personal financial planning director for Allsup. "They end up using all their retirement or pension for living expenses. They don't realize that because of their long-term and chronic condition, they should have applied for SSDI some time ago."

Mr. Gada pointed out that SSDI is a payroll tax-funded, federal insurance program. "This means that you paid for these benefits when a portion of your FICA taxes were set aside for SSDI, along with Social Security retirement and Medicare," he explained. SSDI, which was established in 1954, is designed to provide individuals with income if they are unable to work because of a disability that has lasted or is expected to last for 12 months or results in death.

While many adults with disabilities have some form of health insurance, Allsup has found in its research that 25 percent of those in the SSDI process do not have health insurance.

"Many people are going without regular doctor's visits, postponing their care and skipping their medications," said Mr. Gada. Thousands of people who may qualify for SSDI may not realize that 24 months after being awarded SSDI, they become eligible for Medicare.

"While their disabilities alone are cause for anxiety, people are enduring more distress because of their lack of knowledge about SSDI and this secondary benefit that is available to them," he said.

To help educate and explain the options for people with disabilities, Allsup has outlined eight benefits of SSDI.

Why You Want Social Security Disability Insurance
1. Regular monthly income: SSDI is a regular monthly payment and provides annual cost-of-living increases. A portion of these disability benefits may be tax free.
2. Medical benefits: Regardless of your age, 24 months after your date of entitlement to SSDI benefits, you are eligible for Medicare, including Part A (hospital benefits) and Part B (medical benefits). A variety of Medicare Advantage plans are also available to you.
3. Prescription drug coverage: Once you are entitled to Medicare, you are also eligible for Medicare Part D, the prescription drug plan.
4. COBRA extension: If you receive SSDI benefits, the length of your COBRA benefits could be extended an additional 11 months.
5. Long-term disability (LTD) benefits: If you have private long-term disability insurance, your provider may require you to seek SSDI. Complying with this requirement could help protect your ability to receive LTD income.
6. Protected retirement benefits: When you reach retirement age, SSDI ends and you transition to Social Security retirement benefits. Social Security disability entitlement "freezes" Social Security earnings records during your period of disability. Because the years in which you collect SSDI benefits are not counted when computing future benefits, your Social Security retirement benefits may be higher than if your earnings were averaged over a greater number of years.
7. Dependent benefits: If you receive SSDI benefits and you have a dependent under age 18, he or she also may be eligible for benefits.
8. Return-to-work incentives: Social Security will provide you opportunities to return to work while still paying you disability benefits.

ABOUT ALLSUP

Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Founded in 1984, Allsup has helped more than 100,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs approximately 500 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.