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What You Need to Know Now About Social Security Disability

September 16, 2016

In recent years, even more so in election years, much has been written and said about the Social Security disability program, yet much of it has been false and inflammatory. Those receiving Social Security disability payments have been unfairly criticized and often maligned. Let’s set the record straight with some facts (not misguided opinions) about Social Security disability that you, your friends, your neighbors—every American—should know.

Social Security Disability Insurance (SSDI) covers nearly all American workers and their families with essential protection. More than 90 percent of American workers are protected by the umbrella of SSDI in case they are disabled due to an injury or illness and are unable to work. In all more than 160 million people are covered by SSDI. About 8.9 million disabled workers—including 1 million veterans—are currently receiving SSDI benefits.

Only a minority of workers are covered by private disability insurance.
The private disability insurance market has failed workers. Only one in three persons in the workforce has employer-provided disability coverage (and less than seven percent of low wage employees are covered by their employers). The cost of buying private disability insurance is prohibitively expensive for most working families.

Workers pay for Social Security Disability Insurance coverage.
By law, the federal government requires workers to contribute 6.2 percent of the first $117,000 of their wages in FICA (Federal Insurance Contributions Act) taxes. Employers must match this with an equal 6.2 percent contribution. Of these contributions, 5.3 percent goes to the Old Age and Survivors Insurance (OASI) trust and 0.9 percent goes toward SSDI. Thus, SSDI is like any insurance: You pay for a policy and hope you never have to use it.

Benefits are modest but critically important.
The average 2016 SSDI payment is $1,166 a month or $13,992 annually—barely above the Federal Poverty Level (FPL) for an individual ($11,880) and well below the FPL for a family of four ($24,300). And the average Supplemental Security Income (SSI) benefit is only $541 a month. Even so, according to the American Center for Progress, for more than 80 percent of beneficiaries, SSDI is their principal source of income, and for one-third of them, it is their only source of income.

It is very difficult to qualify for benefits. Most applicants are denied benefits. More than two out of three initial applications for Social Security disability benefits are denied and fewer than four in ten are approved after all levels of appeal.