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Webinar Transcript:
Good afternoon and welcome everyone! Happy Tuesday and thanks so much for joining us. We got some fall weather upon us which is probably a good change. I'm sure everyone would agree but yeah thanks so much for joining us. We have another really important topic-- SSDI or Social Security Disability Insurance.
I know quite a few of you were on our last webinar regarding SSI (Supplemental Security Income) and we always try to make it as clear as possible there are two Social Security benefits. They are drastically different so we thought that this time around we would separate the two talk about SSDI . I'm sure we could spend far more than an hour together but we'll leave time at the end for questions. So write those questions down and we will do our best to get to them. So like I mentioned we try to shoot for an hour in these webinars sometimes we go far over. Everything is recorded. We can send you a copy of the of the recording. Let's just jump into it! Oh, and again as we go, feel free to throw questions in the chat box and we'll get to them at the end.
If been on many of you nearly every webinar, you know there's always a disclosure. We do this webinar for our families in multiple states, all across the country and many different situations so obviously just make sure that you're coordinating with your planning team. Whether it's trustee, planner, attorney, you name it…. make sure that you're taking account your own specific situation into the overall plan.
Many of you are not new to these webinars but for the few people that are, I will just quickly go through who we are. I think it hopefully provides a little bit of context to why we're talking about SSDI. We've been around since since 2013 we work exclusively in the disability community work alongside families, guardians, trustees, you name it…. helping them build a plan for the future for a son or daughter or brother, sister that experiences a disability. So everything from the financial planning component, looking at things with a special needs planning lens to a family's own financial situation, do a lot of investment management, conservator, trust, retirement accounts, but again we probably use what ends up being you know not a great definition of our services but we do essentially all things special needs related! We can you know either find somebody that can help you execute that or help you walk you through and obviously the government benefits planning is one big part of it because nearly all the families that we work with, their child is receiving some type of government benefit. Whether it's SNAP, Medicaid, SSI, SSDI, Oregon K- Plan, we hang our hat on knowing the in’s and out’s to many different special needs planning components.
Everything that we do, we are taking a comprehensive approach. Because the parents financial situation and the individuals situation is connected at every turn. We always use the example you know a family member is planning for three retirements when you think about it! You know, first for both spouses and then for the child when we think about funding a special needs trust. The retirement account has to last not just through parents 30 year retirement but possibly another 30 or 40 years after that so when when we are starting to build out a plan, those are some important considerations that we think about.
Social Security Benefits 101
Now we'll spend again our entire time talking SSDI. Now, this is such an important part because it impacts when parents draw from Social Security. It impacts what the numbers look like for their own retirement plan. SSI, Supplemental Security Income, is a $794 month benefit (2021). SSDI could be upwards of $2,200 a month for the child so you could possibly see almost three times the benefit amount in the future for a child! Many times have parents weren't even expecting they even know about it so that's why everything is you know coordinated and that's why taking a comprehensive approach to how you think about things is really important. They're all interconnected in some way! First many of you who are on the the last SSI webinar you'll you'll you'll recognize this slide I like starting with it just to make sure we separate the two of helping you guys high level understand SSI and then set the stage for SSDI. So SSI, as we talked about, last time that's the needs based benefit. That's the benefit that an individual has to be low income and low in assets to qualify for.
Medicaid & SSI Relationship
What goes along with SSI eligibility is Medicaid. Medicaid, again, is and anyone who's ever you know spoken with us we always try to reiterate Medicaid is not just a health insurance program. It also covers really important things like vocational rehabilitation, which is essentially job training, it covers case management or personal agent support through the county or through brokerage. It funds the Oregon K-plan which provides personal support work hours. It funds group homes or foster care homes. There's lots of different funding sources that come from Medicaid-- we always use the example, if you don't know where the funding comes from, I will bet you it's been funded by Medicaid. From a Social Security perspective most individuals experiencing disability start on SSI first and they transition to SSDI possibly at some point in time down the road. We’ll spend our time today talking again about SSDI being the entitlement benefit. What we mean by entitlement is at some point somebody had paid for that benefit. At some point, somebody paid into the Social Security system to allow that individual to draw a Social Security Disability Insurance benefit. What goes goes along with SSDI eligibility is Medicare and we'll talk about when Medicare kicks in and at the end. We can summarize how do all these different programs come come together SSI, SSDI, Medicare, Medicaid because we've had we have seen individuals who actually receive all of these at the same time surprisingly! More often individuals on SSDI, they receive both Medicare and Medicaid.
We will talk about the end to kind of wrap things up but the other thing that I mention and once this last time but for the people who are new to this SSDI webinar, a big question we always get from families from individuals and professionals is how do I know what benefit my child is on? One way to know is when is the check deposited SSI! Supplemental Security Income (SSI) is deposited on the 1st of the month. SSDI is deposited it's based on your date of birth your birthdate. so or the day of the month in which you were born so if you were born typically the way it works is oops if you were born on the 1st of the month through the 10th of the month you get your check on the second Wednesday if you're born on the 11th through the 20th you get your check on the third Wednesday get your if you were born on the 21st to the 30th you get on the 4th Wednesday of that month so it makes it a little bit confusing but if you're getting your check on multiple it's not always on the same day it's it's it's coming at different points of the month the likelihood is you're probably on SSDI. The other way you can tell is SSI has a maximum benefit here in Oregon Washington of $794.00 a month. California has an additional supplement so if you're in California don't use this technique but if you have an individual who's receiving over $794, they're either not on SSI or they're receiving both SSI and SSDI. Hopefully that helps but most of the time you can identify it based on when is the check deposited!
Alright let's talk about Social Security! We will lay the foundation for Social Security first so about 86 years ago FDR, Franklin Delano Roosevelt, signed into the law the Social Security Act in 1935. Now, it doesn't matter your political party, I think most people, nearly everybody would say this is an extremely successful and effective program. The amount of individuals living on Social Security in some situations solely on Social Security becomes a large percentage of the retired population. 97% of Social Security beneficiaries are either retired workers, disabled workers or disabled adult dependents on SSDI. So it's a program that nearly everybody uses at some point in time in their life.
Earning Social Security Work Credits
How does one actually generate their own Social Security benefit? and this is unrelated to having a disability but over your working years, you as well as your employer, actually pay into the Social Security system through FICA tax-- Federal Insurance Contribution Act-- FICA and you'll see that it is a separate line item on anybody's paycheck. The contributions taken directly from your paycheck are put in the pot of money that funds both Social Security and Medicare because again, they are entitlement benefits that somebody has paid. To receive a benefit the FICA tax 6.2% goes in the Social Security tax fund 1.45% is the Medicare tax on your earnings and for some of the higher income earners, the way it works in 2021, is only the first $142,800 that you aren't is actually subject to that tax. Everything above that is actually not subject to Social Security tax.
SSDI is paid for by paying into Social Security system. SSI is totally different --that's funded by tax revenues so tax revenues being unrelated to FICA tax tax revenues being income tax, corporate tax, capital gains tax. The way in which one actually generates their their own Social Security amount is based on how many work credits have they earned and so in 2021, for every $1,470 of earnings per quarter or just under about $500 a month, you get one credit there's only a maximum of four (4) Social Security credits per year. and essentially, how the math works, is if you earn $5,880 in a year you earn 4 (four) Social Security credits. And so again, you know that's just under $500 a month so most likely if your child, say they're 25, they're working part time and they're earning $700.00 a month, they're earning their own Social Security credit. Many times you're projecting that maybe a child draws off of you, as a parent, but there could be a very good chance that with now more individuals experiencing and disability working than they did, you know 20 or 30 years ago, there's likely going to be more individuals who are drawing off of their own work record as opposed to a parent. We'll get to that here in a moment but again one earns over $5,880 in a year they get 4 credits. Now the important thing is to be eligible for a Social Security benefit you essentially need to work for ten years or earn 40 credits now this changes and we don't time to get to today but your credits are accelerated if you worked earlier in your life and you became disabled at an earlier age. So take an example of somebody who starts working at 22, they become disabled at 26 and they only were working for four years. You say well gosh, they didn't work the full 10, they're not eligible. The way Social Security works in those types of type situations is your work credits are actually accelerated and that that person most likely would actually be eligible for a Social Security Disability benefit so this is for most people who are disabled maybe later in life but again if you do have a family member or a client that only worked for a couple years and you're really interested in how they're drawing their own Social Security benefit it was probably because they got disabled earlier in life they had a short work period but because Social Security accelerates those benefits those those were credits earlier that's why they're eligible the big thing here the big summary is SSDI is an entitlement benefit that somebody paid for it yourself apparent that's not just coming because you qualify based on your disability or qualify based on some other factor it's literally somebody paid for this benefit so as I mentioned SSDI is financed by taxes collected directly from your paycheck FICA so it is paid for directly by you in 2020 about 15.9 about 16 million Americans there's slightly more now but they received just over $18 billion a year in Social Security and disability and survivor benefits so quite a large large number here's where the big concern about is this pot of money gonna run out and there was I think it was 2017 Congress basically put in place legislation to to put essentially a band aid on the system for lack of better term but in 2017 it was proposed to reduce all SSDI benefits across the board by 19% Congress acted and they saved it but you're just kind of moving things down the road that's some point because we have 2.8 people paying in the Social Security system very person who's drawing off of it and it's starting to go down that in 2035 they project that 2.3 people are paying in when one person is paying out so that number dwindles down there's more people you know not enough money actually being being paid into the Social Security system so this is the one pot of money this is the one Social Security benefit that when people talk about is you're gonna be enough there this is when they're talking about not SSI SSI will always be there because it is paid for by other types of tax not not FICA tax not not money coming directly from your paycheck so so how does this all pertain to an individual with a disability that may not be earning their own work credits that it may not even be employed at all so one of the things that's really important is when when a parent files for their own Social Security whether they're disabled themselves whether they're retired and just started drawing their own Social Security benefit or deceased an adult child experiencing a disability can earn like I talked about their own SSDI benefit based on what a parent has paid in the system this is actually rolled out in September of 1960 this was John John F Kennedy is his administration I believe would have been Kennedy and Lyndon B Johnson was a big supporter of as well but Social Security was amended to allow a disabled dull child to earn a Social Security benefit based on what a parent had paid in the Social Security system and their philosophy on this was how would anybody ever earn a Social Security benefit if they're not gainfully employed for not earning their own work credits so they enacted this in 1960 and it was a fantastic idea for disabled adult child to qualify they have to meet two different tests the first one is they have to have a qualifying disability so they you know go through that here in a moment what Social Security is definition of disability is so they have to have a qualifying disability not only do they have to have a qualifying disability but the onset of that disability has to have occurred prior to age 22 so for example if an individual is disabled at 26 from a car accident a traumatic brain injury they unfortunately would not be eligible to draw off of a parents work record but again the answer of that individual disability has to have occurred prior to their 22nd birth date for them to draw a disabled adult child benefit off their parent What's really important is roughly about 10 to 12% of individuals in the Social Security system Social Security is a different date of the onset of disability than what the actual family thinks it is there's a study done I think I referenced it in scammer which which webinar a couple months ago but essentially they they did a study and it came out to about 10 to 12% of families so she has a totally different date of what the family actually thought the onset of disability was so it's really important I would say to double check next time you're on the phone with with with Social Security have to have a qualifying disability number one number 2 there has to be a sufficient work history so there has to be credits earned there has to be 40 credits earned in most situations like I mentioned previously certain situations there can be less credits and still receiving SSDI benefit but generally speaking sufficient work history these are the two tests to qualify now well what what we'll go through here next is drying off a parent and the coming slides drawing off of it individuals own work record it's like I mentioned previously it individuals own work record for credits every single year if you earn over that you know 5880 you're getting that that four credits you need 40 credits to actually qualify that's really important and you can earn both on on an individual's own work record as well as a parent there are individuals that that we work with that they're receiving both and SSDI benefit on their own work record as well as a parent as well couple things to keep in mind SSI SSDI is not an income or is is not an asset based benefit meaning there's no subject to the to the $2000 threshold theoretically Bill Gates could go on SSDI and he's got you know well over that $2000 number the really important thing is when you call Social Security you'll get off the phone with them they'll say your child is now on SSDI and it's not an asset based test and you're going to be very relieved and thinking you don't have to deal with the $2000 asset limit the unfortunate part is Medicaid still applies that most likely your child is receiving Medicaid and that's a far more important benefit in most instances so unfortunately though this is not an an asset based program don't let Social Security trick you if your child is on
Medicaid and the $2,000 Asset Limit
Medicaid you always have to abide by that $2000 asset limit we'll talk about this in a lot more detail in the coming slides but for a child to qualify so let's say they meet both the first two tests they have qualified disability that occurred prior to 22 you as a parent have drawn or drawn your own benefit or the child drawn off their own benefit the child must continue to earn under the substantial gainful activity amount which is $1310 a month this is the threshold in which if you're earning over that you're earning over this number they say you're not disabled enough to receive our benefit so SGA essentially if you're earning over that $1310 number Social Security says by definition your impairment does not prevent you from employment you're not longer any longer eligible we'll talk about some of the work incentive programs through Social Security but that just is important number to keep in the back of your mind that for your child to qualify for SSDI they have to be under the SGA limit for 2021 that's 1310 last year I believe it was 1280 so it's gonna increase with inflation but that's a really important component of this is the qualifying disability is really for the most part geared off of whether they earning an income and is it over the SGA limit the other really important thing is like I mentioned SSDI runs along with Medicare and after 24 months first check arrives on on September 1st.
Important Medicare Considerations
24 months later that individual on SSDI will be eligible for Medicare and at that point in time Medicare will be the primary Medicaid will be the secondary there's lots of really really helpful insurance covers there and and most of the time just about everything is covered there has been discussion there has been bills that have been proposed in the Congress to basically wave that 24 month waiting period that's still yet to be determined but at this point Medicare will not kick in for anybody on SSDI until 24 months later as I previously mentioned you can be dual dual eligible SSI and SSDI we do see that one thing that's important is the reason why you don't see a lot of people dual eligible is SSDI is countable as unearned income towards SSI so if you remember last time from the SSI webinar is unearned income reduces an SSI check $1 for every $1 earned so sensually if your SSDI benefit is you know over $800 a month that's gonna reduce that SSI check down to zero which is the reason why when somebody transitions to SDI SSI basically goes away disable adult child SSDI benefits oh again like I mentioned you you can earn an SSDI benefit based on your own work record the individual with the disability zone work record they can also earn based on the parent so how does that work as I mentioned they have to be disabled prior to age 22 the parent must either be retired and receiving Social Security disabled themselves or have passed away so there's really only three ways in which an SSDI benefit for a child can kick in to draw off a parents work record it's parent has to be receiving their own Social Security benefit disabled themselves or have passed away now if the parent is retired or disabled themselves the amount in which the individual the disability receives is 50% of the parents Social Security benefit amount what happens when the parent passes away is that benefit actually jumps up to 75% so you'll see the 25% jump when you pass away as parent that your child will actually get an increase in the benefit in which they receive now the the 50% benefit I've gotten confirmation from Social Security that if a parent just decides to draw their own Social Security benefit at 62 and if you know about Social Security the earliest you can draw a 62 assuming no no no disability the latest you can draw a 70 the earlier that you draw the the smaller benefit you get the more that you wait the more that that that benefit increases by 8% a year but if you as a parent draw at age 62 and you receive say $1200 your child is actually eligible for SSDI benefit then but just 50% of that $1200 amount you could wait until full retirement age and your child could get an increase benefit depending on what that full retirement age benefit is it could be 16 or $1700 a month so there is some strategic thinking about when do you draw what does that mean for your child when do you need your child or want your child to maybe go on Medicare do you have a spouse that may also be earning a spousal benefit do you have a spouse that's also working that maybe one person files in the in your child goes on that benefit at that point the other spouse suspends their benefit you know or just waits to draw until age 70 to get the 8% increase a year so there's many different combinations of of how you can draw but here are the basics to it 50% when a when a parent is retired or disabled and drawing from Social Security 75% when they when they pass away one thing that I'll mention I won't spend a ton of time on it but how it the there's a lot of questions about how is Social Security taxed SSI is not taxable you'll never you'll never pay a dime of tax on that depending on the individual's income would dictate whether SSDI benefits or Social Security in general list is is taxable most of the time let's go through the simple numbers so for individuals in individuals with disability receiving SSDI benefit of their income is over 25,000 there could be a chance they're gonna start to pay slightly small percentage of tax on that benefit most individuals generally speaking are not over that threshold and so that's why in many situations there's no tax due on it but keep that in mind for an individual it's it's a threshold of 25,000 that everything north of that would be possibly subject to tax so here's the the book definition from from Social Security but you can read through it yourself I'll just give you the quick summary it's essentially does this person have a disability that prevents them from employment or prevents them from earning $1310 a month that disability has to last for a continuous 12 months but that's really what it comes down to is does does this disability prevent them from engaging in employment that allows them to earn over 1310 a month for planning purposes II I wanted to cover this because I think it's important when families are thinking about you have one income earner you know husband or wife and they're the one working and then you have possibly disabled child and you have a spouse who may not have enough credits in the Social Security system how does that work so as we as we talked about workers receive benefits basically what they paid in the Social Security system and members of their family whether it's disabled old child it's children underage 18 it's a spouse they could all actually receive a benefit based on them now the maximum family benefit is a mountain which is calculated by Social Security that says OK what is this person earnings how much do they pay in the Social Security system and what is the total amount that we could give to all the people that are eligible based on that person there are certain instances in which you have one income earner they have a former spouse they have a current spouse and they have two disabled children that could be possibly five people drawing off of that one Social Security taxpayer themselves former spouse spouse and two disabled child two simple children and that's where Congress established the household maximum of basically saying here's the maximum which somebody can draw for one taxpayer the way in which it works is you take that that that earners full Social Security benefit and you multiply it typically ends up being about 185% on the on the on the high end of what all those individuals can receive and that's the amount in which is the actual household maximum so say it's well let's go to an example actually so let's take Phil Phil retires he's drawing $3000 a month of his own Social Security benefit his wife and his disabled child are both eligible for Social Security benefits now the way in which it works without taking in account the
Social Security and the Family Maximum
family maximum is the spouse is eligible for 50% or $1500 a month you have to disable adult child eligible 50% as well another 1500 well if you take Phil's $3000 benefit you take the spouse at 1500 take the disabled adult child benefit at 1500 that's $6000 that's over 185% so when was she at work is what happens is the spouse and the disabled child actually split that 85% amount so they both essentially get 42 1/2% or $1275 each so again wait generally it works is if you have four people drawn up one Social Security tax payer they're likely all gonna split that amount evenly another important consideration is a divorced spouse may be eligible to to collect benefits on a former spouses work record if they were married for 10 years so it's important thing just to know overall planning you were married for for 10 years you over 62 years of your years of age you're likely eligible to draw off of that former former spouse and again as we talked about that would obviously impact the family maximum going back to an individual on SSDI benefit who's also employed is like I mentioned that $1310 month is really important if your child on SSDI and they're venturing into employment or they're in employment currently we're seeing really across the country especially here in Oregon in Multnomah County minimum wage is going up hours may be going up do you have businesses there's you know you know help want it on you know pretty much every business out there right now that they're offering significant wages keep in mind that as hours go up as wages go up many situations because this 1310 this substantial gainful activity amount is a federal number that does not increase or has not increased historically as quickly as wages are are are going up especially here you know in Portland in Seattle and San Francisco so one of the basic requirements of SSDI eligibility is that the medical condition like
Understanding Substantial Gainful Activity (SGA)
I talked about must be serious enough from preventing that person from doing a certain level of work and what that certain level of work is is that SGA amount is if you earn over that $1310 month per month and work you are not eligible your impairment does not prevent you from employment you're not eligible again we'll talk here in a moment about some of the work incentive programs I will mention that SG is different for an individual who is blind in that number 2190 so keep that in mind is that visual impairments have have a different threshold the one thing that is again really really important which makes it different from SSI so SSDI is a is an all or nothing benefit so if your child is earning $1500 a month take fills you know son for example he's earning 50% of his benefit He's earning under SGA he's gonna get that full 1500 if he goes over goes $1 over that $1310 amount he will earn 0 he's not eligible for a dime of it there's no graded you know gradual you know reduction of benefits it's literally all or nothing that's why that SGA number is really really important what's also really important is and this is the reason why in many instances applying for SSI at age 18 is so important is not only do you get your SSI check but you also have Social Security determine your disability and actually have it saved in the Social Security system prior to your 22nd birth date.
cause if you remember to be eligible for SSDI basically parent you have to be disabled prior to 22 it makes things significantly cleaner is so security has already reviewed the file clearly they made it determination prior to 22 it's pretty easy at that point and there's really no grey area as you get later on in life and you didn't apply for SSI until you know 33 makes it a little bit more difficult to actually prove your onset of disability so and you know SSI in comparison SSI is it it gradually decreases as as you will earn more income so again SSDI it's not all or nothing benefit one thing I think that I've never actually seen implemented but I want to mention anyway is technically Social Security does have the ability to conclude that volunteering is actually SGA that if you are volunteering or you work somewhere and you decided to forgo wages completely for some reason that technically security reserves the right to actually make a determination whether that is counted towards SGA so for the people who want to get hurt think about getting getting creative and and say well let's just volunteer just to retain that SSDI benefit keep that in mind so very very clearly as she is important is because it allows SSDI eligibility to give your child a larger monthly benefit and also be on that on that 24 month waiting list for Medicare benefits because SSI is usually significant less let's talk about some employment supports I know a lot of families you know mentioned us that it feels like Social Security does not incentivize work it's always about you know they're not making work easy every time or child earns an income their check is reduced and they make it very very difficult it is true to a certain extent they they they do make it somewhat difficult on the reporting requirements but many of the programs if you really understand them actually do a really good job of providing supports to employment keeping somebody on their benefit only until they find consistent employment do they then remove them from it so now goes out here in a moment vocational rehabilitation they have some some some good you know job training counselors or or benefits counselors I should say because there are 19 different SSA Social Security employment support programs some of them are SSDI summer SSI but again there's programs inside the system to allow for somebody to be employed and still receive their benefit let's go through an example of or let's talk more about the nine month trial work period so this is just this is just a employment support program applicable to SSDI so this is called the 9 month trial work period so let's take an individual who finds employment and they're now earning over that 1310 a month they have the ability to continue to receive their full SSDI check for nine months and not reduce or receive their full wages receive their full SSDI check and have it have them not lose their benefit it basically gives them a nine month period to venture into employment to test it to make sure that they have consistent income coming in before the remove from it so it's called the the nine month trial work. That they can earn during that 9 to month. They can earn over that SJ limit and still receive their SSDI check so let's go through an example well'cause I got more bullet points here the point of the program is you can unlimited amount during that nine months still receive their SSDI check but at the end of those nine months if you've shown consistent employment nine consecutive months over that 1310 then that's when your benefits technically will stop one of the things that's important is if your monthly income is under $940 you actually do not use up one of your nine month trial work period months and you end up getting actually nine months every every every five years so I think that the point here is I don't wanna overwhelm me with all these numbers you have to remember I think the the big thing is to know that these employment supports are out there understand vaguely kind of how they work in the premise behind them and then to lean on you know people that know some details actually walk you through some of the numbers and actually had to implement it to the questions asked to Social Security but again this is one that probably does not get utilized enough and it's as everyone if you dealt with Social Security you probably know they're not consultants they're not planters you know some people you could get lucky and find somebody who's who's who's helpful but for the most part it's they're just Social Security reps are just servicing they're not helping you kind of think through some of the underlying benefits let's talk about Martha Martha 33 let's say she earns $1109 a month in SSDI she just got a job at the Oregon Zoo she's now going to start earning $1350 just over that SGA limit because it's over that limit her PA her parents are concerned about how this impacts her benefit now Martha is not use any of her trial 9 month trial work months over the last five years so she has all nine that that she can use in this situation she can earn anything over that 13 that 1310 she can earn her full $1350 a month and and every single month in which she does will count towards that nine month trial work. But her SSDI check will not be impacted so for literally nine months she could be earning what is the math 2600 and and $60 received both both benefits find consistent employment and not have it impact or benefit let's say unfortunately 9-4 months later the the job doesn't workout and she's gonna go back to you know searching for employment she still has five months left within the next five years of those trial work period months the goal behind this like I talked about previously is to help individuals find employment and only remove them from their disability benefit once it is proven that it's consistent it's there they're comfortable with it and it's a good fit so those things I'll walk you through is the extended period of eligibility this is a benefit actually comes after the nine month trial work period that if you earn more than substantial gainful activity for nine months your trial work period as we talked about ends but there's actually this 36 month period or this extended period of eligibility that kicks in so this work period will last for 36 months after last month of your child work period and during this time you actually had the ability to earn over that $1310 a month and it won't receive won't produce your SSDI benefit if you earn under that benefit amount you'll get the full benefits so it basically it's really easy to move back and forth between being on your benefit being off you're never completely terminated from SDI you're typically adjusted you know a suspended mode let's say after 36 months you have one month where you go over the SJ limit the way in which this extended period of eligibility works is if you go over one month your SSDI benefit actually stops so again the big thing is keep us in mind that there's work incentive programs that that that's so she is not trying to terminate you the moment that you go over that amount but rather trying to kind of usher you into consistent employment so and the other cool thing is again you're not terminated terminated suspended are two totally different terms and how they're handled by Social Security but for the next five years even if you're off of SSDI you are eligible for expedited reinstatement it means you can basically stop working and then restart your benefits without going back through the entire process so it makes it a bit bit easier the last thing I'll mention is erwee's or impairment related work expenses essentially what these are is many individuals who are experienced in employment have a cost associated with riding the bus training specific uniform forever job they're at different expenses that that that they need to pay for to allow them to be employed or to work that job those are expenses that are essentially deductible from what Social Security counts towards either SGA for SSDI or as income for SSI and this again is is a program that one can receive through on both SSI and SSDI so socially what happens is Social Security deducts the cost of those impairment related work expenses from you're accountable income will actually determining your your actual benefit amount or whether you're eligible or not here a couple of examples of criterion which you would have to hit to to count this as an apparent related work expense the item or the service allows you to work you need the item or service because of a physical or mental impairment you pay for the item or service yourself you are not reimbursed by your employer or another source Medicare Medicaid private insurance carrier and the cost obviously is reasonable so I think that's another really important one that not enough people on SSI or SSDI take advantage of is if there are expenses associated with it take advantage communicate with Social Security communicate with your caseworker or personal agent and make sure that these things are being documented and actually submitted two Social Security in some way I think many people on this on this on this webinar on the last one but I'll just quickly run through briefly on the role that represented payee I think the big thing with SSDI is I always say though if you call secure and you say does an individual on SSDI have to report wages you're likely gonna get two different answers you'll probably get three different answers if you call three different people at Social Security but what I would say is transparency is most important that it's fairly easy to report wages I would recommend doing so because I think it's easier in the end if you don't have a break of you know two or three or so years of no wages reported that the more that that that you can be transparent I think it minimizes the underpayments or the overpayments because I will tell you that Social Security does have access to balance is enable accounts obviously because everything runs through a Social Security number when you fire taxes like that type of information can't find his way to basically meet at some point and catch you if you're not reporting that's that's a big I think role of the
Serving as Social Security Representative Payee
Rep payee is just reporting wages reporting different events I think is also really important if you move if if you're the representative payee which I should have actually started with this the Rep payee is the essentially the person that overseas one Social Security benefit for the trustee of that person Social Security benefit they're the ones who are paying for expenses reporting changes to Social Security those changes could be changes in income changes in and where they live where they got married whether their name changes on those types of things now we have quite a few questions so I'll just move through a couple of different things reporting events we talked about that if a change happens on August 17th you have the requirement to report to Social Security at the latest by the 10th of September so you have 10 days into the following month to report changes back back to Social Security and that's important this is what keeps people kind of out of you know out of the weeds with Social Security as they are not very organized it's not their job to keep things organized they'll always look at you you know yeah it's a they don't they don't email it's only facts and you know in person appointments and phone calls and I think the more which you can dictate and more that you can record I think keeps you I'm at it at it you know at a possible issues down the road I was recommend families establish a my Social Security account I think this is something that makes life easier because getting Social Security information is not easily accessible this is really the only portal in which one can sign into and check in the status of an application report wages update address update banking information you know those types of things so we know how long it takes to actually sit on hold with Social Security so I always recommend use this makes life a little bit easier here's how you establish it ssa.gov/myaccount and pretty easy Social Security number name just basically your banking info or your bread and butter basic information we always say before I get to the questions all this coming this slide really quickly but we always say don't Co mingle funds especially with size they don't commingle funds I think it's it's it's more OK for lack of better term to commingled SSDI funds because those are benefits that someone is paid for for you so there are a little bit more lackadaisical for lack of better term because again that's your benefit you've paid for SSDI SSI to taxpayer funded benefit it's a it's a needs based program they're more stringent on what that money is being used for that's why there's a rent requirement for SSI and there's not for SSDI that's why there's a need based threshold for SSI at 2000 and there's not one for SSDI so but we always say kind of best practices not to Co mingle funds if at all possible and to establish a representative payee account specific for that Social Security benefit to actually get paid into and keep those employment you know employment checks keep the birthday checks keep all the all that money distribution from you know I don't know enable account keep it separate so if you need to you know furnish accounting records to Social Security for whatever reason it's it's pretty clean and easy that you don't have a lot of inflows and outflows so alright 1256 we'll jump into some questions I'm sure we have quite a few which is great and let's see here daughter went from SSI to SSDI six months ago I understand that Oregon her Medicaid is not cancelled if she is already on it she says 2000 correct her Medicaid will not be cancelled if she's already on it what I would say is make sure you're communicating with her personal agent or caseworker that's most important thing there are some situations in primarily other states because state of Washington for example snow is a 1634 state which basically means if one is SSI eligible they're automatically eligible for Medicaid so Medicaid necessary tide at the moment that somebody loses their SSI benefit the concern in those 1634 states is will they lose their Medicaid as well 'cause there's no communication between well the only communication is so security to medication this person is not eligible any longer in Washington takes that person off their benefit so make sure you're communicating with your caseworker personal agent to make sure that that does not get you know so we get removed from the system so that's why I think communication is the most important thing daughter has been waiting for over six months for backpay on SSDI after being converted over nobody knows in the Eugene OR Social Security office how long it will take to get the back pay on yeah it's about 5 or 6000 you know it I guess Social Security probably has the best answer on that the good thing is there is back pay on the timing of that usually it comes in in a couple different installments so I would probably say they're probably best to answer that question on the timing of it but yeah backpay is awarded how much money is in reserve in this fund or is it borrowed money from the government to pay for these benefits I don't know the exact amount though every every year the the Social Security Administration trustee that came out the exact term but they do issue report every year if you do want it I could I could find it then And then email it to you so if you want to see that report email me and we could get you over its tends to be 70 or 80 pages of their findings their their financial findings on the Social Security general fund if the funding is pulled from STI will we be able to revert back to SSDI I would guess so I would guess at that point that your child will go back on on on a needs based benefit I don't see that happening I don't see SSDI going away completely when it will say there's a good chance of is they'll continue to implement things in which you know full retirement age is not 66 in you know three months for someone who's 62 it's you know it's now 72 years old is full of time and age or they're just gonna start pushing that out or a spousal benefits not 50% it's 45% so they could they can do things like that that can start to save some of the funds so they're going to be around you know in decades and decades and decades to come is yes the amount a gross wage amount it is a gross wage really good question good clarifying questions gross amount gross amount so before tax but again you know the impairment related work expenses you know you may factor that as a net wage or a net amount but yes it's before tax but don't forget about the impairment related work expenses can the SSDI benefit itself which could be greater than 2000 disqualify the child from Medicaid do the $2000 limit there no so what I would say again is make sure that you that you communicate with a personal agent or a caseworker most of the time it's going to be somewhere in the maximum of maybe $2200 a month let's say now even though it's over $2000 it's over the income threshold technically the only issue that you would run into is you'd have to get that money spent down before the first of the next month so they're saying that that you know that SSDI benefit is $2000 it was deposited today on August 17th that family that individual that Rep payee would have to move the money out of the individuals name prior to the first because theoretically Social Security only counts assets on the first moment of the first day of the first month so basically September 1st if you're over 2000 you're not eligible if you're under 2000 you're good to go for that month so just make sure it's spent down below 2000 before the first month do you still need to file a tax return no income but getting SSDI I would say anybody who's employed any individual whether earning $100 a month or $1000 a month should be filing a tax return because there are savers credits there's the able contribution credit you know the way in which you get tax refund is really only you know if you file a return so I would say anybody that's employed should be filing a tax return if you're just receiving SSDI I think generally is generally your your your CPA probably would say no but when in doubt file a return and and with with the return question is the IRS on their website does have free reporting free free tax filing software for people that make I believe it's under 65,000 if you hit three $1310 a month are they out of SSDI forever just for that month typically just for that month that's why reporting wages is is really important as you can go back and forth between being on the benefit being off benefit person makes a $1310 a month and loses SSDI can that be reinstated the person stops earning over the limit what happens to Medicare um Medicare typically stops typically stops if you if you are over that benefit amount and um you're over the benefit amount and you're not not receiving SSDI any longer Medicare typically stops so that's a very good question I'm trying to think about situation I've run into email me let me think about that think about that longer I believe it stops but I just want to double check and yes it it can be reinstated as well how does Medicare coverage work during the trial work. Add coachworks and trial work period after if you were successful Medicare Medicare is gonna continue there's I took out a couple slides just in this for the sake of time on the extended eligibility for Medicare during that time and there's Medicare will continue I believe it's it's almost eight years I can try think it's 64 months Medicare will continue for the individual that's not on SSDI any longer that is from a March webinar we did which was government benefits for employed individuals so if you wanna see that we we cover that in a lot of detail about what exactly happens to Medicare long after the individual is no longer on SSDI benefit the limits to what to what you can do with SSI money for instance could an individual totally Yep you could save s s SSDI or SSI money you know typically our general recommendation is with SSI being a needs based benefit we tend to recommend families to exhaust the benefit every month charge your child rent use the remaining portion for you know for you know a new pair of shoes summer camp whatever SD has a bit more lenient where because it's an entitlement benefit that that they don't they're not stringent on what the money is being used for but generally speaking both could be saved into an able account for family maximum to spouse his own benefit reduce what is counted as part of 185% it does not so if the spouse is receiving her own benefit it does not count towards the 185% parent is applying for Social Security benefits to start how then how to then also apply for disabled adult child SSDI benefit separate independent applications so typically that's one of the first couple of questions in which Social Security will ask is they'll say do you have me adult disabled children and that's what kind of starts that though there is a button there there's a page on the Social Security website I can send you that actually allows you to apply for for SSDI benefits so typically it's Social Security actually ask you to kind of get that process started when you as a parent apply but there's also a a separate application that that can be done online do you recommend the SSDI benefit to be put into an able account or personal savings I always say able account you wanna be careful obviously on making sure you're staying under the $15,000 allowable contribution limit for one who's not employed but because of the $2000 threshold for Medicaid is the stress of having money into in an accountable account that could very well go over that $2000 threshold without you knowing it's probably a bit more stress than what most you know support you know family members want to take on so I'd say thrown in table and just let it grow tax free 'cause not only is it not accountable resource enable count you get tax credit on the contributions you get tax free growth does the benefit does the family benefit increase if the primary earner waits until it does until four terminates Yep the family benefit increases just because yeah the full retirement age increases for the household as well so that will all increase as it goes up but um couple more questions what happens to SSDI SSI SSDI Medicare if the beneficiary leaves the country for say a year so our daughter lives outside the country and we were considering moving there so SSDI or SSI if you're outside the country for over 30 days will stop Medicaid will not in most situations will not pay outside the country SSDI will continue to pay Medicare in most countries continues to be a support program many many countries let's say it's Canada for example I can't remember exactly what it's called but there's some reciprocal you know health insurance program that allows somebody to be covered overseas or even just in Canada for example um Adams St and parents retirement are too high for Medicaid what are these limits so for an individual household of one for them to be eligible for K plan it's three times the federal benefit rate or three times the SSI amount which I believe is $2380 somewhere in that range but they should be looking at at Adam as a household of one and say what is his income and if he's under that would give you the exact amount 794 * 3 it's yeah $2382 that's the that's the income threshold for K plan so yeah all really good questions alright well everyone thank you so much for joining us hopefully that was helpful and if you guys have any questions don't don't hesitate to reach out we're always here to help but it's always good to hang out with everyone again and everyone enjoy your Tuesday and again let us know how we can help and you guys have a really good rest of the week and a good last couple of weeks to summer we'll talk soon see ya.
Summary:
Now that you're a Social Security Income (SSI) pro, let's turn the magnifying glass to another often misunderstood, but equally powerful social security benefit that is crucial to your family's special needs financial plan.
Social Security Disability Insurance (SSDI) pays an important benefit to your loved one experiencing disability given that you have worked and paid into social security long enough. For as much as SSI and SSDI have in common, they have equally as many differences when it comes to application process, eligibility requirements, impact of employment on benefits, and reporting requirements.
On Tuesday, August 17th at 12:00pm PST we examined the key fundamentals of SSDI and how to best maintain and utilize this benefit as a component of your loved one's overall life care plan.
Topics of Discussion:
SSDI eligibility criteria - financial and disability requirements
Social Security work incentive programs
Earning Social Security work credits-- how does it work
What is Substantial Gainful Activity (SGA) and why it is EXTREMELY important
How does a parents Social Security benefit impact a disabled child benefit?
Medicare eligibility & benefits
SSDI reporting requirements
Representative payee: Roles, responsibilities, duties
How does employment and income impact and affect SSDI benefits?
Handling Social Security denials