SSDI: The Social Security Disability Insurance Program

Social Security Disability Insurance (SSDI) is one of the largest of several federal programs of the United States government that provides assistance to people with disabilities. It is often confused with Supplemental Security Income (SSI). Though both the programs are administered by the Social Security Administration and are meant for persons with disabilities, they are different in many ways. This article provides you details about Social Security Disability Insurance (SSDI).

What is SSDI Program?

The SSDI Program pays disability benefits to an insured person and certain family members. Being ‘insured’ in the SSDI program means that the individual has worked long enough (before becoming disabled), recently enough and has paid Social Security taxes on their earnings.

This clearly means that you are not eligible for SSDI benefits if you were not employed for a specified time period before acquiring a disability. Social Security Administration calculates Social Security Credits based on the earnings of a person to determine their earning eligibility for SSDI benefits.

SEE ALSO: How to Apply for SSDI

In general, the benefits are paid on monthly basis to individuals (and certain family members) who are unable to work for a year or more due to a disability or the disability results in death.

The payment under SSDI continues until the beneficiary is able to work again on a regular basis. There are some special rules called ‘work incentives’ to provide continued disability benefits and health coverage to help the beneficiary in a smooth transition back to work.

How do You Earn Social Security Credit?

Social Security Credits are based on the earning of an individual either through wages or through self-employment income. Since 1978, an individual can earn a maximum of four Social Security Credits in a year. The amount of earnings required for gaining credits is revised every year. Typically, the amount of earning required for credits slightly increases every year as it is based on the average earning level.

In 2021, for example, individuals will receive one Social Security Credit for every $1,470 of earnings.

Social Security Credits are based on total wages or self-employment income for the year. Thus, a person may require an entire year to earn four credits or may even earn the four credits in much lesser time. The income earned over and above the amount for four credits in a year has no significance in the credit calculation.

It must be noted that the number of Social Security Credits is calculated only for determining whether a person is eligible or not for Social Security Benefits. It does not affect the amount of benefit a person will receive. While one cannot be eligible without earning the minimum required credit, earning more than the minimum required credit has no extra benefit for an SSDI applicant.

[Bonus Info: Monthly payment of your SSDI benefit is calculated on the average of your earnings over your working years, not on social security credits.]

social security disability insurance ssdi claim

Work and Earning Requirements for being Eligible to Receive SSDI Benefits

As mentioned earlier, you need to be employed for a certain period before acquiring a disability to be eligible for SSDI benefits. You need to earn a specified number of Social Security Credits to fulfill the earning criteria.

In general, you need to fulfill two earning criteria aka ‘work test’

  1. Recent Work Test based on the age of acquiring a disability
  2. Duration Work Test to ascertain you have worked ‘long enough’

Calculation of both the ‘Work Tests’ are done based on Calendar Quarters

  1. First Quarter – 1st January to 31st March
  2. Second Quarter – 1st April to 30th June
  3. Third Quarter – 1st July to 30th September
  4. Fourth Quarter – 1st October to 31st December

Recent Work Test

The number of Social Security Credits required to meet the Recent Work Test depends on age. It is calculated as given in the following table.

Calculation of Recent Work Test
If someone becomes disabled Minimum required work credit
In or before the quarter of turning 24

E.g. If Mr. X acquires a disability on 20th May 2021 (first quarter) and he would be turning 24 on 5th April 2021 (second quarter), he became disabled a quarter before turning 24.

6 credits i.e. 1.5 years of work during 3 years period ending with the quarter of acquiring a disability.

E.g. In this case, Mr. X needs to have worked for at least 1.5 years (earned 6 credits) between the ‘first quarter of 2018 to the first quarter of 2021.

In the quarter after turning age 24 to the quarter before turning 31.

E.g. If Mr. X acquires a disability in the quarter of turning 27…

Half the period beginning with the quarter after turning 21 till the quarter of acquiring a disability.

E.g. He needs to have worked for 3 years (earned 12 credits) out of 6 years ending with the quarter of becoming disabled.

In the quarter of turning 31 or later.

E.g. If Mr. X became disabled after turning 31 (or in the quarter of turning 31)

5 years of work (20 credits) out of 10 years of the period ending with the quarter of becoming disabled.

E.g. He must have worked for 5 years out of 10 years preceding the quarter of attaining disability.

Duration Work Test

To ascertain that you have worked ‘long enough’ to be eligible for SSDI benefits, you need to meet the duration work test. For the duration of the work test, your work does not need to fall within a certain period. You just need to have minimum required years of work credit.

Certain blind workers need to meet only the Duration Work Test and not the Recent Work Test.

There’s a simple formula to calculate the minimum number of quarters of credit required for being eligible for SSDI benefits. Take the year of becoming disabled and subtract the year in which you attained 22 years of age. The result you get by doing this gives you the minimum required quarters. You can then convert the quarters into years by dividing them by 4.

E.g. Suppose Miss Y acquired a disability in 2021 and let her year of birth be 1991.

Year of acquiring Disability – Year of attaining 22 years of age = Minimum number of Quarters

2021 – 2013 = 8

8 Quarters = 2 Years

* Miss Y who became disabled at the age of 30 will thus require minimum 2 years of work credit or 8 Social Security Credits.

Here we are providing a table for your quick reference.

Minimum Number of Years of Work Required to Qualify for SSDI
If someone becomes disabled at Minimum number of years of work required
Before 28 years of age 1.5 years of work credit
30 years 2 years of work credit
34 years 3 years of work credit
38 years 4 years of work credit
42 years 5 years of work credit
44 years 5.5 years of work credit
46 years 6 years of work credit
48 years 6.5 years of work credit
50 years 7 years of work credit
52 years 7.5 years of work credit
54 years 8 years of work credit
56 years 8.5 years of work credit
58 years 9 years of work credit
60 years 9.5 years of work credit

Note: – Minimum of 6 quarters of coverage is mandatory for everyone. This minimum requirement is applicable to even those who have yet not attained 22 years of age but are applying for SSDI based on their own earnings.

Bonus Info:  People born after 1928 need 40 Social Security Credits to qualifying for retirement benefits. For family members to be eligible for survivors benefit need credits according to the age of death of the person… no one requires more than 40 credits.

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