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Does Social Security cover disability?

Disability Insurance
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Maybe, but only if you have enough work history to qualify, if your absence from work lasts a year or more, and if the disability is so serious that you can't hold any job at all. The disability will have to be concrete and well-documented by medical records. Denied claims are common, but can be appealed.

If you can be re-trained to do any other job, you will be expected to work. (So, don't delete all those "You Can Earn $100,000 a Month!!!!" emails quite yet!) Also, no partial claims are allowed. If you take a job paying more than $700 a month, according to current rules, you will no longer be eligible for Social Security checks.

The older you are and the more consistently you have worked in recent years, the more likely you are to be eligible. According to the Social Security factbook, 72% of men and 60% of women over age 20 are currently insured for disability. More detailed rules can be found online in the Social Security Administration's Disability Benefits publication (9/99).

Social Security also provides an online calculator if you want to guesstimate what kind of disability benefits you could expect (be sure to scroll down to the bottom of the results page). When planning for future disability needs, be careful about adding together multiple sources. For example, disability insurance payments may only make up the difference between Social Security benefits and the income level covered by the policy. On the flip side, Social Security will reduce payments by any amounts received from other government programs.

In short, when it comes to disability payments, Social Security acts as a true "safety net." It will help to keep your family off the street, but certainly doesn't guarantee the standard of living you enjoyed before the onset of hard times.