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When Does Social Security Disability Convert To Retirement?
If you are disabled and collect Social Security disability benefits or intend to apply for them, have you given any thought to what may happen should your Social Security disability convert to retirement benefits? Whether or not your SSD converts to Social Security retirement depends on which of the two disability programs you applied to for benefits.
Benefits through Social Security Disability Insurance automatically convert to Social Security retirement at full retirement age, but disability benefits received through the Supplemental Security Income program do not. Your SSI benefits may not automatically convert, but if you are eligible for Social Security retirement benefits, you could be forced to apply for early retirement benefits.
Most articles about Social Security disability focus on how to apply and the criteria you need to meet to qualify. This article gives you information about the interaction between retirement and disability benefits along with tips to avoid a common mistake made by people applying for SSD make that ends up costing them money during their retirement.
Social Security Disability Programs
The Social Security Administration (SSA) programs exist to protect people against the financial hardships that accompany a loss of income due to being unable to work because of a disabling medical condition. Social Security Disability Insurance (SSDI) is for people who have earned a sufficient number of work credits at jobs or self-employment where they earned income that was subject to payment of Social Security payroll taxes.
Another option for someone who is disabled is the Supplemental Security Income (SSI) program. As with SSDI, a person who is blind or disabled and qualifies for benefits receives a monthly payment to help toward paying for basic needs, such as food, shelter, and clothing.
SSI is available regardless of whether or not a person has a work history, but there are strict limits on the amount of income and the value of financial resource limits available to a person applying for benefits. An advantage SSI offers over SSDI is its availability to children under 18 years of age who are blind or disabled. However, children and their parents or stepparents must meet the financial criteria to be eligible for benefits.
The Social Security retirement program that provides benefits to older people based on their work history may become a factor for people on SSI or SSDI either by conversion of benefits from disability to retirement or through a reduction of disability payments for people also receiving retirement benefits. A closer look at the two disability programs shows how a recipient may be affected upon reaching the age when they are eligible to receive either full or early retirement benefits.
Supplemental Security Income And Retirement
SSI is an income supplement program funded by the federal government through general tax revenues, which is why it can be made available to people who have not paid Social Security taxes on earnings from work or self-employment. It pays benefits to adults or children based on need.
The total value of assets a person owns may not exceed $2,000 for an individual and $3,000 for a couple, but some assets or resources do not count toward the resource total. For example, the value of a home or other type of dwelling and the land on which it is situated does not count as an available resource regardless of its value provided you occupy it as your principal residence.
SSI limits the amount of income a person may have each month and still qualify for benefits. For 2021, the monthly income limits are $794 for an individual and $1,191 for a couple. If you are 62 years of age and eligible to receive early retirement benefits through Social Security, you may continue to receive SSI.
As a matter of fact, you cannot refuse to apply or decide to wait until you are old enough to receive full retirement benefits. The retirement benefits do not result in an increase in your overall monthly income because payments from SSI are reduced by what you receive in retirement benefits.
Social Security Disability Insurance And Retirement
If you earned income subject to Social Security taxes through a job or self-employment, you may be eligible for SSDI benefits when a qualifying medical condition causes you to be disabled and unable to work. Whether or not your work history of sufficient duration to qualify for SSD under this program depends upon the work credits you earned.
You earn a work credit based on the amount you earn each year and may earn up to four credits a year. For 2021, you receive one work credit for each $1,470 in annual earnings.
Your monthly SSDI payment is funded by Social Security taxes and is based on your lifetime earnings. Your payments from disability convert to regular Social Security automatically when you reach the age when you are eligible for full retirement.
The age for full retirement depends on your year of birth. For example, someone born in 1955 became eligible to receive retirement benefits two months after reaching 66 years of age. Someone born in 1960 or later must wait until they are 67 years old.
Talk To A Disability Attorney Before Taking Early Retirement
If you are 62 years old and a medical condition prevents you from working, talk to a disability attorney at The Law Firm before taking early retirement benefits. Taking retirement benefits early reduces the amount you receive for the rest of your life.
An exception is when you apply for SSDI and Social Security determines that your disability began before you took early retirement benefits. In that case, there would not be a reduction to your SSDI. You would receive SSD retroactively to the date of the onset of the disability. The retirement benefits when the SSDI converts would be at the full amount you would have received had you waited.
However, if Social Security determines that your disability began after you accepted early retirement, your retirement benefits will be reduced for life. Get advice from a disability attorney before making a costly mistake.
If you receive long-term disability benefits because of an injury or illness, you have good reason to be concerned about who pays health insurance while you’re out of work. This article answers your questions about health insurance coverage when you have a long-term disability. It explains state and federal options available to keep you insured while
Long-Term Disability And Federal And State Laws
If you receive wage-replacement benefits through a long-term disability plan maintained by your employer or through a disability insurance policy you purchased, check the terms of the plan or policy. Some plans or insurance policies include continuing health insurance coverage for all or part of the time you’re out of work.
The Family Medical Leave Act, or FMLA, is a federal law that protects workers who must take a disability leave. Short-term leaves lasting less than 12 weeks require your employer’s continuation of medical coverage, provided the FMLA covers you.
To be eligible for protection under the FMLA, you and your employer must meet the following conditions:
- You work for a state, local, or federal agency or school district or in the private sector for an employer with at least 50 employees working at least 20 weeks per calendar year.
- You worked at least 12 months and clocked at least 1,250 work hours in the past 12 months.
- You have a severe health condition as defined under the FMLA that typically requires inpatient care at a medical facility or incapacity for more than three days while under the care of a medical professional.
The FMLA does not require employers to provide health insurance coverage beyond the first 12 weeks of disability. However, if you qualify for disability benefits through programs administered by the Social Security Administration, you may be eligible for medical coverage through Medicare or Medicaid.
Health Insurance Through Medicare With A Long-Term Disability
If you cannot work because of a disabling medical condition, you may qualify for disability benefits through Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). These are programs administered by the SSA that provide monthly cash payments. If you meet the eligibility guidelines, you could qualify for health insurance benefits through Medicare or Medicaid.
You may know of Medicare as a health insurance program through Social Security retirement for people at least age 65. It’s also available for workers who become disabled and cannot work before they are 65.
If you worked and contributed to the Social Security system by paying taxes on your earnings, you may be “insured” and eligible for SSDI benefits. You must be disabled with a medically determinable physical or mental impairment. This means a medical professional diagnosed you and can document your condition through medical records, including physical examinations and diagnostic test results.
The physical and mental impairments must be expected to last for at least 12 months or be expected to result in death. They also must be severe enough to prevent you from engaging in substantial gainful activity, which means you cannot do activities required to work at a job.
If you qualify for SSDI benefits, you become eligible for Medicare benefits after a 24-month waiting period. The waiting period does not apply if you are disabled with a diagnosis of ALS, also known as Lou Gehrig’s disease.
Medicaid Benefits Through SSI
You may be eligible for health insurance coverage through Medicaid if you qualify for SSI. SSI is a need-based program available to individuals with little or no income and assets of no more than $2,000 or $3,000 for eligible couples. If you meet the financial conditions, you also must be disabled or blind or be at least 65 years old.
Medicaid eligibility starts immediately for anyone who qualifies for SSI benefits. Some states require that SSI beneficiaries submit a separate application for Medicaid.
Learn More About Health Insurance and Long-Term Disability
A disability lawyer is an excellent source of information and legal representation. A consultation with a disabled lawyer can help you maintain health insurance coverage while unable to workbecause of a long-term disability.
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