If a time comes when your arthritis makes working too difficult, you may decide to apply for disability benefits from the government. 

The Social Security Administration (SSA) has two programs that may provide a monthly income to you: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). 

What is the difference between Social Security Disability Insurance and SSI?

• Supplemental Security Income (SSI) is for people who are unable to work and who have very little income and few assets. There are no prior-work requirements. If you qualify, SSI pays you a monthly income. As of 2001, the maximum amount was $530 for an individual and $796 for a couple. In addition, some states supplement the federal payment. SSI benefits are not taxable. If you are eligible for SSI, you usually qualify for Medicaid, the government health insurance program for low-income individuals. The costs of the Medicaid program are shared by federal and state governments. The SSA will tell you if you need to apply separately for Medicaid in your state. 
   
• Social Security Disability Insurance is for people who have worked, have paid FICA taxes, and then have become disabled. The formula that determines what you qualify for is based on how much you've earned, the number of years you've worked, your age, and when you became disabled. (Unlike SSI benefits, your assets are not part of the determination.) In 2001, the average cash benefit paid to individuals was $786 a month, but someone qualifying for the maximum benefit would receive $1,310 a month. A percentage of your benefits may be taxable depending on your other income. If you qualify for Social Security Disability Insurance, you may also be covered by Medicare, the federal government's health-care program, but the wait is two years after you are eligible for benefits. (At age 65, you automatically qualify for Medicare.) If your income and assets are limited, your state may provide help with the costs of Medicare premiums. 

I've heard that the Social Security Administration has a very narrow definition of disability. Will I qualify?

To qualify for either program you must meet the SSA's definition of disability. The definition is: The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The impairment must be expected to result in death or to last for at least 12 months. "Substantial gainful activity" is defined as the ability to work and earn at least $740 per month gross (as of 2001). This means that to qualify for Social Security disability payments, you must be unable to perform any job that could pay more than $740 per month.

How do I apply for disability benefits?

To determine if you qualify for SSI or Social Security Disability Insurance, file an application with your local SSA office by calling 800-772-1213. A Social Security representative will help you determine if you qualify for SSI or Social Security Disability Insurance. Work with your doctor to ensure the application has detailed medical information, including the treatments you have tried, where these treatments were administered, and the medical reasons why you are unable to work. It's helpful if you have had a relationship with one doctor over several years, so the doctor can describe the progression of the disease to the SSA office. Expect to wait anywhere from four to six months to learn if you are approved. If your initial claim is denied, you can request an appeal. You may want to hire a lawyer or advocate who specializes in Social Security disability law to help you with this process. Under federal law, the lawyer or professional advocate must charge no more than $4,000 or 25 percent of the back pay you may receive from the SSA (whichever is lower). Your SSA office can also give you a list of legal advocates who either do not charge or charge a reduced fee.

How soon will I begin receiving benefits?

If you are eligible for SSI benefits, you will begin receiving them as soon as your application is approved. Medical coverage under Medicaid can begin at the same time. If you are eligible for Social Security Disability Insurance benefits, you must wait five full months after the month of disability onset before you can receive cash benefits. You generally will not receive payments during these five months. You must wait another two years before you can receive Medicare benefits. To fill in this 29-month gap before Medicare coverage begins, try to keep your current health insurance plan in force. Take advantage of COBRA benefits until they run out. If you have COBRA coverage as a result of a disability, and have provided your employer with all the documentation they require as proof of your disability, you will have 29 months of health insurance coverage. In this instance, Medicare will begin just as COBRA ends.

If you are receiving COBRA benefits for a reason other than disability, and will therefore not qualify for Medicare, you can get a "Certificate of Creditable Coverage" from your last employer when COBRA ends. This will help you get new coverage without having to satisfy a pre-existing condition exclusion period. You will not have to satisfy another pre-existing condition exclusion period as long as you have had medical coverage for 18 months, you have satisfied the pre-existing condition exclusion period under your previous employer's plan, and you have not been without health coverage for more than 62 days. 

If I get better, I may want to go back to work. What will happen to my benefits?

Both programs have special rules called "work incentives" that can help you earn money and still keep your disability benefits. 

• SSI. In most cases, if you have a job and receive SSI benefits, half of your monthly earnings over $85 will be deducted from your SSI check. In general, your Medicaid coverage will continue, even if your SSI payments stop, until your income reaches a certain level. 
   
• Social Security Disability Insurance. In general, to keep your Social Security disability benefits, your earned income must stay under $740 a month (as of 2001). For example, you could have a part-time job and still receive benefits.

If you think you might want to go back to work full time, or if you want to earn more than $740 a month, you can take advantage of a "trial work period" of nine months without losing your monthly benefits. In addition, your benefits can be reinstated any time during the next 36 months if you are still disabled and decide you can no longer work. If you must quit working due to the disability after the 36-month time limit, an "easy back on" provision will let you receive benefits for six months while your disability status is reviewed. Your Medicare coverage also can be extended if you decide to go back to work.

As you can see, the rules governing these programs are complicated and change from time to time. To learn more, visit your local Social Security office or go to the SSA's Web site at www.ssa.gov/work. 

What if I also have private disability insurance?

Apply for these benefits immediately if you believe you are eligible to receive them. These benefits typically kick in sooner than Social Security. However, what you will be paid depends on the terms of the plan or policy.

In addition, employer-provided policies may state that benefits will be reduced by the amount you get from Social Security. When you purchase an individual policy, the benefits are generally not reduced by Social Security. In fact, because it is difficult to qualify for Social Security benefits, you can buy a rider for your individual disability policy that provides an enhanced benefit if you do not qualify for Social Security Disability Insurance.

Can workers' compensation help?

Most U.S. workers are protected by state workers' compensation laws. These laws provide financial security to the worker and his or her family by making periodic payments for disabilities that are job-related. Instead of suing an employer for job-related injuries, you must file a claim with the state workers' compensation board. However, you cannot recover workers' compensation benefits for arthritis unless you can show that your condition was caused by your job activities.

©2001. National Endowment for Financial Education. All rights reserved.

Note: Certain content areas in this material are current as of the publishing, but legislative and regulatory changes as well as new developments may date this material over time. This content is meant to provide general financial information; it is not meant to be a substitute for or to supersede specific professional or legal advice.