People who are qualified need to understand the SSDI process, apply as soon as possible and prepare themselves and their families for the likelihood of living on a significantly reduced income.
Belleville, Ill. (PRWEB) October 20, 2011
The unemployment rate for people with disabilities has climbed for the fourth consecutive quarter to reach the highest rate since tracking began in 2008, according to a study by Allsup, a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare plan selection services.
The Allsup Disability Study: Income at Risk shows that people with disabilities experienced an unemployment rate more than 85 percent higher than the rate for people with no disabilities for the third quarter of 2011. Specifically, the unemployment rate averaged 16.3 percent for people with disabilities, compared with 8.8 percent for people with no disabilities. These figures are based on non-seasonally adjusted data from the U.S. Bureau of Labor Statistics. The quarterly rate hasn’t been this high since reporting of the disability unemployment rate began in the fourth quarter of 2008.
The Allsup Disability Study: Income at Risk shows that 737,468 people with disabilities applied for SSDI during the third quarter of 2011, down 3 percent from the previous quarter. Year-to-date, nearly 2.22 million people have filed disability claims, compared with nearly 2.23 million applicants by the same time last year. Since the fourth quarter of 2007, when the recession began, more than 10.8 million people have applied for SSDI. Nearly 1.8 million SSDI claims are pending with an average cumulative wait time of more than 800 days, based on Allsup’s analysis of the Social Security disability backlog.
“Disability applications have increased significantly over the past few years,” said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. “The economy is one factor, with some people with disabilities never able to return to work after a layoff. Another factor is the aging population, with most baby boomers now in their late 40s to early 60s,” Gada said. The average SSDI applicant is nearly 53 years old.
Some people with disabilities who are unable to work may put off applying for SSDI, and older individuals may simply wait to age into Social Security retirement benefits. Either of these actions, however, can result in a serious financial impact, both now and in the future.
“People who are qualified need to understand the SSDI process, apply as soon as possible and prepare themselves and their families for the likelihood of living on a significantly reduced income,” Gada cautioned.
Understanding Social Security Disability Benefits
SSDI is a mandatory, tax-funded federal insurance program providing individuals with financial resources if they are unable to work for 12 months or longer because of a severe disability, or if they have a terminal condition. Individuals must have paid FICA taxes to be eligible. Social Security disability benefits are calculated using the person’s earnings history.
Allsup outlines several financial benefits to those who qualify for SSDI:
- Regular monthly income. In September, there were nearly 8.5 million workers with disabilities receiving SSDI benefits, with an average monthly benefit of $1,070.40. SSDI recipients can expect their benefit amounts to increase next year. The Social Security Administration (SSA) recently announced that there will be a cost-of-living adjustment (COLA) increase of 3.6 percent for 2012, the first increase since 2009.
- Spouse and dependent benefits. As of September 2011, there were 163,627 spouses and 1.83 million children of disabled workers receiving benefits. The average monthly benefit for a spouse was $288.53. To be eligible, the spouse must have a child under age 16 or a child with disabilities, or be at least 62 years old. A former spouse also may be eligible if the marriage lasted at least 10 years. The average monthly benefit for a dependent child was $318.11 in September 2011.
- Protected retirement benefits. Social Security disability entitlement “freezes” Social Security earnings records while a person is receiving SSDI benefits. Because these years are not counted when computing future benefits, beneficiaries’ Social Security retirement benefits may be higher than if their earnings were averaged over a greater number of years.
In the past, individuals received an annual statement from Social Security with an estimate of their benefits. The SSA no longer mails statements because of budget shortfalls. Individuals can determine their Social Security benefits using Allsup’s free online Social Security benefits calculator.
In addition to cash benefits, SSDI includes provisions to help people with their healthcare needs. These include potentially extending COBRA benefits and Medicare eligibility, 24 months after their date of entitlement to cash disability benefits.
“SSDI offers a baseline safety net for people who have paid for this coverage. If they face a disabling condition, it’s important they apply as soon as possible,” Gada said.
If you have questions about whether you or someone you know is eligible for SSDI, please contact the Allsup Disability Evaluation Center at (800) 678-3276 for a free evaluation.
Allsup also provides free financial planning tools to help people better manage their finances while awaiting SSDI benefits. You can find these tools at http://www.allsup.com/personal-finance. Medicare plan selection services also are available through the Allsup Medicare Advisor® at http://ama.allsup.com.
Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs nearly 800 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis. For more information, visit http://www.Allsup.com.
The information provided is not intended as a substitute for legal or other professional services. Legal or other expert assistance should be sought before making any decision that may affect your situation.
Editor’s Note: Details on the Allsup Disability Study: Income at Risk are available at http://www.allsup.com/Portals/4/allsup-study-income-at-risk-q3-11.pdf.
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