Because Social Security Disability Insurance benefits depend on an individual’s earnings history, amounts can vary considerably by age and gender
BELLEVILLE, Ill.--(BUSINESS WIRE)-- During the third quarter of 2010, unemployment rates for people with disabilities climbed to their highest quarterly rate in a year and continued to outpace the unemployment rate for other workers, according to a quarterly study by Allsup, a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare plan selection services.
The Allsup Disability Study: Income at Risk shows that for the third quarter of 2010, people with disabilities experienced an unemployment rate 67.7 percent higher than people with no disabilities. Specifically, the unemployment rate for the third quarter averaged 15.6 percent for people with disabilities, compared to 9.3 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Bureau of Labor Statistics.
The Allsup Disability Study: Income at Risk also shows that during the third quarter of 2010, the number of people with disabilities unable to work and applying for SSDI climbed to 764,902, an increase of 4.3 percent compared to third quarter 2009. Year-to-date, more than 2.25 million people have filed disability claims. Nearly 1.8 million SSDI claims are pending with an average cumulative wait time of more than 850 days, based on Allsup’s analysis of the Social Security disability backlog.
“The number of people filing for disability claims has doubled compared to 2001,” said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. “Contributing factors include both the aging population and the high unemployment rate. Some people with disabilities are never able to return to work after a layoff.”
According to Gada, people applying for SSDI need to understand the importance of acting quickly to secure benefits. “Someone who is qualified needs to apply as soon as possible given the backlog and to ensure they meet certain qualification restrictions,” Gada said. “They also need to plan financially for what likely will be a significantly reduced income.”
Understanding SSDI Benefits
People unable to work due to a severe disability need to understand the specific financial resources available to them – and their families – under the SSDI program. SSDI is a mandatory, tax-funded, federal insurance program designed to provide individuals with income if they are unable to work for 12 months or longer because of a severe disability, or if they have a terminal condition.
Individuals must have paid FICA taxes to be eligible. As a result, people’s SSDI benefits are calculated using their earnings history. Because someone’s work history varies depending on age and life experiences—benefits can vary widely by age and gender.
Allsup outlines the following considerations when planning for the financial future:
- Regular monthly income: SSDI is a regular monthly payment and usually provides annual cost-of-living adjustment (COLA) increases (though none for 2010 or 2011).
In September, the average monthly benefit for a person qualifying for SSDI was approximately $1,066. But specific benefit amounts can vary greatly. For example, the average September monthly benefit for men was above average at $1,190, while women’s monthly benefit was $929. Age also plays a significant factor as the chart shows below:
|*Figures rounded to the nearest dollar.|
Source: Social Security Administration, as of June 30, 2010
- Spouse and dependent benefits: A spouse and dependents of someone receiving SSDI benefits also may be eligible for benefits. The average monthly benefit for a spouse in September was $287, with men receiving $239 on average, and women receiving $289 on average. To be eligible, the spouse (or former spouse if the marriage lasted at least 10 years) must have a child under age 16 or a child with disabilities, or be at least 62 years old. With regard to children, there are different categories of dependents and the payment amount varies. According to the SSA, the average September monthly benefit to a dependent child was $318.
Keep in mind that individuals can find an estimate of their benefits by examining their Social Security statement, which the Social Security Administration (SSA) mails out on an annual basis.
The SSA recently announced there will not be a COLA for a second consecutive year, so benefit amounts will continue to hold steady in 2011. “There has been little fluctuation in the average monthly benefits since the start of 2009,” Gada said.
In addition to monthly income and dependent benefits, SSDI also includes provisions for protecting future retirement benefits, the opportunity for extended COBRA benefits, eligibility for Medicare 24 months after a person’s date of entitlement to SSDI cash benefits, as well as prescription drug coverage.
“It’s important that people apply as soon as they are eligible and make certain they are receiving all the benefits that apply in their circumstances,” Gada emphasized.
If you have questions about SSDI eligibility for you or someone you know, please contact the Allsup Disability Evaluation Center at (800) 279-4357 for a free evaluation of your situation.
Allsup also provides free financial planning tools to help people better manage their finances while awaiting SSDI benefits at http://www.allsup.com/personal-finance. Medicare plan selection services also are available through the Allsup Medicare Advisor®.
Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs nearly 700 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis. For more information, visit www.Allsup.com.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.
Editor’s Note: Details on the Allsup Disability Study: Income at Risk are available at http://www.allsup.com/Portals/4/allsup-study-income-at-risk-q3-10.pdf.
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