Disability

Source: SSA.gov.

This article was updated on March 8th, 2016

The feeling of invincibility starts to wane as we age. But even if you avoid roller coasters, obey speed limits, and religiously eat your leafy greens, accidents happen. Illnesses occur. And getting sidelined by some malady or another that takes you out of the workforce for a while is much more common than you might think.

The U.S. Census Bureau reports that more than 37 million Americans -- about 12% of the total population -- are classified as disabled. If you think it won't happen to you, well, you've got company: A disability awareness study done by the people who care most about disability awareness -- the Council for Disability Awareness -- found that 64% of wage earners believe that there's just a 2% or less chance that they'll be disabled for three months or more during their careers.

Sadly, the actual odds are much higher: The chances of a 20-year-old worker becoming disabled before retirement are -- wait for it -- one in four. That's a whopping 25%.

The financial side effects of becoming disabled
As long as we're on this cheerful topic, let's review the ways that a long-lasting condition or disability can clobber your financial well-being.

While disability insurance through your work or purchased on your own may help keep your head above water, those benefits can run out more quickly than you think. After that, the disabled often turn to the Social Security Administration for help by applying for benefits from the Social Security Administration disability insurance program (SSDI). It’s important to know your eligibility and whether you qualify for these disability benefits based on impairment so you can understand how to apply for Social Security disability.

How the Social Security Administration decides if you are disabled
You may look like the poster child for disability pay in your full-body cast, but before you can collect a dime, the Social Security Administration needs to determine whether you meet eligibility requirements.

Meeting the SSA's strict criteria is not a slam dunk. Nearly two-thirds of all applications for Social Security disability are rejected. However, you can increase the odds of getting approved if you know the rules and are armed with the right information to make your case.

You can apply online for disability benefits via the SSA website where there's a five-step screening process to determine whether you are disabled and should even bother applying for benefits. Here's what they want to see:

1. You must have enough "working credits to qualify," and you can't earn too much.
There's a minimum amount of time you have to have worked in the past to even qualify for Social Security disability benefits. The older you are and the more consistently you've been pulling in paychecks in recent years, the better likelihood you have of getting approved.

The SSA makes two calculations to figure out if you've paid enough into the system to qualify.

  • First, there's the "recent work test," which is based on your age at the time you became disabled.So, for example, if you become disabled during or before the quarter you turn 24, you'll need to have worked at least 1.5 years during the three-year period leading up to your disability. If you're age 31, then you'll have to have worked five years out of the previous 10. (Hey, we're talking about a government program here, people. Did you think this would be easy?)
  • And then there's the "duration of work test" to see if you've worked long enough in general (not during any particular period of time) to qualify for benefits. That information can be conveyed in an easy-to-follow table. (Note that the minimum level of work required gradually increases based on your age.)

Examples of work needed for the duration of work test

If you become disabled...

Then, you generally need:

Before age 28

1.5 years of work

Age 30

2 years

Age 34

3 years

Age 38

4 years

Age 42

5 years

Age 44

5.5 years

Age 46

6 years

Age 48

6.5 years

Age 50

7 years

Age 52

7.5 years

Age 54

8 years

Age 56

8.5 years

Age 58

9 years

Age 60

9.5 years

Source: SSA.gov.

Besides the years worked, the SSA will look at your current income to make a call. In order to be in the running to receive benefits, your earnings in 2015 must average less than $1,090 a month ($1,820 a month if you are blind).

2. Your condition must be considered "severe."
You've got to be pretty bad off to qualify for disability benefits, as in really bad off. The SSA guidelines for disability eligibility state that your malady must be found to interfere with all work-related activities. On top of that, the impairment must have lasted or be expected to last for at least 12 months or be expected to result in your death (e.g., the kind of situation you wouldn't wish on your worst enemy). Short-term (less than one year) or partial disability (meaning you can do some work still) does not meet the SSA's requirement of being a "severe" condition.

3. Your condition must be in the official list of disabling conditions.
The SSA maintains a listing of impairments that it deems severe enough to prevent a person from "completing substantial gainful activity."

That said, if you have a condition that is not on the impairment listing, you're not automatically disqualified from receiving disability benefits. It just means that the SSA will need to take additional steps to assess how your impairment limits your ability to work and see what work-related activities, if any, that you are still able to do, which brings us to...

4. You must be unable to do the work you did previously.
Here, the SSA will take a closer look to see if your medical impairment is severe enough that you are unable to perform the duties required in your past work. And if your disability is not on the official list they'll take a closer look at your current physical/mental state and assess your "residual functional capacity" (RFC) -- your remaining ability to do basic work-related activities. For example, they'll look at:

  • How you respond to physical exertion (e.g., sitting, standing, walking, lifting) and manipulative and postural activities (e.g., reaching, using your fingers, stooping, balancing, climbing stairs);
  • Your ability to tolerate environmental conditions such as extreme temperatures, wetness, humidity, noise, fumes, vibrations;
  • If you can you understand, remember and carry out instructions; maintain concentration and attention; respond appropriately to supervisor and co-workers in typical work situations.

They'll also look at how you actually did the work you did and how that job in your particular field is done in general.

5. You must be unable to do any other type of work, too.
The final formal requirement for qualifying for Social Security disability is your ability to do a different, but related job. It doesn't matter if employers aren't hiring or there are no job listings for something you are able to do. What matters is whether you are physically capable of doing the work.

The SSA will make a judgment call on this based on your medical conditions, your age, education, past work experience, any transferable skills you have, and any recent training/education that you've completed that might qualify you to do some kind of work. They'll compare you to others with the same medical-vocational profile and evaluate your remaining capacity for work.

In general, the older you are (the disability area on the SSA.gov website describes those age 50 to 54 as "closely approaching advanced age" and age 55-plus as "advanced" and acknowledge that people in these categories (especially with severe impairments and limited work experience) will have a harder time adjusting to other work.

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