People often have this defining moment when they realize their disability represents a permanent change in their life and their lifestyle
Belleville, IL (Vocus) July 15, 2008
Someone can become disabled in the blink of an eye when an accident happens or from a gradual onset of chronic illness. Then the financial blow hits—the instant someone realizes that he or she can no longer work. Successfully dealing with the financial impact of a permanent disability is a challenging but essential task , according to Allsup, which represents people nationwide for Social Security Disability Insurance benefits (SSDI).
“People often have this defining moment when they realize their disability represents a permanent change in their life and their lifestyle,” explained Paul Gada, a tax attorney and personal financial planning director for Allsup. “There’s no sugar-coating the fact that money is going to be in short supply, and they have to evaluate their financial options.”
Lost income can lead to many hardships, including bankruptcy or home foreclosure. “The most important step early in the process is to get a grip on your situation,” Gada said. “The goal is to remain financially independent for as long as possible.”
Early Step: Apply for SSDI
One early step is to apply for Social Security Disability Insurance benefits. SSDI can provide a person and his or her family with income and help offset lost income from the inability to continue working.
According to the Social Security Administration, to qualify for SSDI, a person must be unable to work because of a mental or physical impairment that has lasted, or is expected to last, for at least 12 months, or is expected to result in death. He or she also must have worked and paid into the program (payroll taxes) for five of the last 10 years, and additionally, has become disabled before reaching full-retirement age (65-67).
Allsup representatives have helped more than 100,000 people receive SSDI benefits, so they know that applying for and receiving an award is only a part of the solution to the difficulties that face people with disabilities and their families.
But applying is a crucial step. More information can be found in the online section, “Why You Want SSDI.”
Next Step: Evaluate Resources
Another important step for individuals who no longer can work is to pause and evaluate their financial circumstances with an eye on the long term.
“Keep in mind that the average SSDI recipient does not receive an award of benefits until many months after the initial application. For many people, the application, denial and appeals process can take two years or more to finally result in regular monthly SSDI benefits,” Gada said.
The following are resources that individuals can consider when assessing their financial situation and the potential to increase cash flow, helping offset lost income:
- Personal resources. Existing savings and other assets are known as someone’s financial net worth. To help identify all the immediate financial resources at someone’s disposal, Allsup offers an online net worth calculator. Some assets (such as cash, savings accounts and checking accounts) are available for immediate use. Other assets (such as stocks, a home, vehicles and similar assets) would need to be converted to cash for use in paying monthly expenses. Of course, a long-term disability insurance policy also can be a resource, typically providing about 60 percent of someone’s salary, according to the organization America’s Health Insurance Plans.
- A spouse’s income. Having a supportive spouse is a blessing, and having a spouse who works can significantly help in the long term. Sometimes an SSDI claimant’s spouse can return to work or increase worked hours to help offset lost income. Another benefit to keep in mind is access to medical insurance through a spouse’s employer. Allsup provides an online calculator that shows the financial impact of having additional income in a household.
- Financial assistance programs. There are many federal, state and local government programs available to help those with disabilities or low incomes. There also are many privately funded programs to turn to, including help with paying gas, electricity, telephone and water bills, property tax credits, food stamps, food pantries and more. Tracking them down takes time, but they can fill a big hole in basic monthly costs.
Vital Step: Don’t Lose Hope
People who find themselves with a mental or physical disability face many hardships, and they risk losing hope that their circumstances will ever improve. Usually, however, the situation is not as hopeless as it seems.
“Getting through tough financial times isn’t easy,” Gada said. “But careful planning and knowing about and using all the options available to you can definitely improve your financial circumstances. And Allsup is one of those resources.”
More information on economic resources and options for people with disabilities can be found in the Financial Matters section of Allsup.com
Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Founded in 1984, Allsup has helped more than 100,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 500 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.
For more information, visit http://www.Allsup.com.
Allsup - http://www.Allsup.com
(800) 854-1418, ext. 5065
Dan Allsup, ext. 5760