Monday, October 12, 2009

Social Security Disability: FYI

We've all heard the horror stories of how difficult it is to apply, and ultimately qualify, for Social Security disability benefits. First, there's the rather onerous definition of what it means to be disabled:

■ You cannot do work that you did before;
■ We decide that you cannot adjust to other work because of your medical condition(s); and
■ Your disability has lasted or is expected to last for at least one year or to result in death.

What you may not have known is what happens after you've been approved. My understanding has always been that once one's claim is approved, the gummint sends a check for what should have been paid for the preceding months (years?) while the claim was under review, back to the date that Social Security has determined one first became disabled.

This is incorrect.

Recently, a very good friend was helping out a cousin who had become disabled (medically, if not by SSA's definition). He obtained all the necessary documentation (POA, HCPOA, etc) and filed the claim. During the porocess, he also made at least one trip to the Columbus (OH) SSA office to drop off even more paperwork and answer even more questions. Eventually, his cousin's claim was approved.

But that's just the beginning.

On September 22nd (less than a month ago), he received the approval letter from Social Security. It informed him that his cousin "became disabled under our rules on August 4, 2008" (he had filed the claim with a 2007 date of disability, this was pushed forward by the folks at Social Security). It also informed him that:

"(Y)ou have to be disabled for 5 full calendar months in a row before you can be entitled to benefits ... your first month of entitlement to benefits is February 2009"

That means that, instead of a check representing a year of benefits (August of 2008 through August of this year), she would receive a check for only 7 months (February through August). In her case, this is almost $8,000 that won't be paid out.

And the hits keep coming:

"You will receive $[redacted] around September 18, 2009" (remember, the letter is dated September 22nd). He received similar letter on the 30th, promising his cousin's check a week later.

Then on October 7th, he was told that "the check is in the mail," but that seems to be inoperative, as well.

There are a number of important lessons here:

First, contrary to popular belief, the "lump sum payment" is not based on the date of disability, but rather 5 months later, amounting to a 5 month "waiting period" (similar to personal disability policies). One could easily lose the house and everything else waiting for that.

Second, it shows how vitally important it is for folks to own their own disability policies (or at least take advantage of group plans at one's workplace). If you're counting on Social Security disability, it could be even longer than you believed to actually receive a check.
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