Social Security disability benefits

Getting What’s Yours — The Revised Secrets to Maxing Out  Your Social Security, covered the nuances of disability benefits.

Social Security Disability Insurance (SSDI) offers claiming options that can be superior to Social Security retirement benefits.  Being approved as disabled can be an extensive process involving doctors, medical opinions, and administrative hearings. It is even harder these days because there is a year-long backlog in processing SSDI requests.

Qualifying as disabled begins with satisfying work rules that you are entitled to benefits. These are different than for nondisabled workers, who need 40 quarters of covered earnings to qualify for retirement benefits. Covered earnings are defined as wages at jobs where payroll taxes are deducted from your pay.

The amount of required covered earnings is less if you are younger. For example, someone who is disabled prior to age 25 can collect disability benefits with only 6 quarters of covered earnings. For middle-aged workers, the requirement for full SSDI benefits is 20 quarters of covered work out of the prior 40 quarters of work, ending with the quarter in which you become disabled.

Another key point: you can obtain more than 1 quarter (indeed, as many as 4 quarters) of coverage in a given quarter simply by earning enough money. “In 2024,” the agency says, “you receive 1 credit for each $1,730 of earnings, up to the maximum of 4 credits per year.” So, if you made $6,920 during the first week of January, you would have earned an entire year of credits.

When a person on SSDI reaches their full retirement age, their SSDI benefits automatically convert to regular retirement benefits. However, the full amount of the FRA benefit can be claimed as soon as age 62 if a person is disabled.

Disabled workers collecting their benefits before their FRA aren’t assumed by Social Security — the word the agency uses is “deemed” — to also be filing for their spousal benefit even if their spouse has already filed for retirement benefits. This exemption carries over to divorced disabled workers. Disabled workers thus aren’t forced to take the larger of their disability and spousal (or divorced spousal) benefits prior to reaching full retirement.

In some cases, it may be advantageous for a disabled beneficiary to withdraw from Social Security to trigger deferred retirement credits, and later re-enroll and receive higher benefits. Call Social Security to review this option.

The conditions under which spouses, ex-spouses, and children of disabled workers can collect auxiliary benefits based on the work record of the disabled worker are the same as in the case of retired workers, with one exception: the spouse or ex-spouse who is at least 62 can collect a spousal or divorced spousal benefit regardless of the age of the disabled worker.

Those on disability can take their excess spousal benefit early and then, when they reach their own FRA, withdraw their retirement benefit. But here’s the advantage: they don’t have to pay back the excess spousal benefit because it’s a “disability” benefit, not a “retirement” benefit.

If you’re receiving a disability benefit and your spouse (or ex-spouse of 10 or more years) has passed away, you can collect reduced widow(er) or divorced widow(er) benefits 10 years earlier — at age 50, not 60 — than if you aren’t disabled. Furthermore, there is no additional reduction for taking the widow(er) survivor benefit starting at age 50 or at any other age before age 60.