by V. Kumar

Created on: September 12, 2008

SOCIAL SECURITY DISABILITY BENEFITS or SSDI have been a very effective system of insuring persons against unexpected disability as well as its financial consequences. However, they also face certain challenges that will need to be sorted out in future.

SOCIAL SECURITY DISABILITY BENEFITS AN OVERVIEW

SOCIAL SECURITY DISABILITY BENEFITS consists of two benefits - the SOCIAL SECURITY DISABLITY INSURANCE or SSDI, and SUPPLEMENTAL SECURITY INCOME or SSI. They form the Social Security cover in case of disability. They are provided selectively depending upon the fulfilment of eligibility criteria of disability prescribed by the Social Security Administration.

I. SOCIAL SECURITY DISABILITY INSURANCE (SSDI)

SSDI is a payroll funded insurance scheme administered by the Social Security Administration as per the mandate provided to it by the US Government. The aim of the program is to provide income during the period of disability that prevents the person from working, and guarantee an income for those who are unable to work again.

The SSA has formed certain criteria for granting the disability benefits to those suffering from disability. These include the presence of a medical condition that prevents the person from being 'gainfully employed'; a recognized medical condition lasting or expected to last beyond 12 months; age less than the age of retirement and the affected person must have worked for at least 5 out of the last 10 years. This is worked out by a complex formula.

II. SUPPLEMENTAL SECURITY INCOME (SSI) & ELIGIBILITY

Supplemental Security Income is an additional benefit that also requires the same disability criteria as in the SSDI. However, SSI is based upon the net income and wealth of the beneficiary, which must be below a prescribed limit for this purpose, indicating need for additional support. The criteria for children with disability are different for grant of SSI.

III. OTHERS

There are certain other benefits that are also dependent upon the grant of main benefits like SSDI. Irrespective of age, persons receiving SSDI for over 24 months become eligible for MEDICARE benefits, including Part A (hospital benefits), Part B (medical benefits), and Park D (drug benefits). A person receiving SSDI benefits also becomes eligible for receiving the COBRA benefits after 18 to 29 months. A dependent of a person receiving SSDI may also be eligible for the disability benefits. - The retirement benefits of a person eligible for disability benefits may be higher because of the freezing of the accounts during the period of disability.

CHALLENGES FACED BY SOCIAL SECURITY DISABILITY PROGRAM

There are three main apparent disability programs.

(i) Social Security Disability benefits are one of the most common reasons for administrative disputes and lead to maximum number of administrative appeals.

(ii) The period of waiting for grant of benefits is 90-120 days as per the SSA estimates. However, in practice it may take more than eight months to get the application for disability benefits disposed.

(iii) The third problem is related to rejections. Almost one third of the applications for SSDI are denied.

FUTURE OF THE SOCIAL SECURITY DISABILITY

The future of Social Security Disability benefits are important for insuring against disability affecting people adversely. Thus, there is definitely enough justification for continuing with the program. However, the issues pertaining to delay in disposing the applications for disability benefits as well as the large number of disputes indicate an urgent need for review of the administrative setup.

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