Disabled? How to get benefits

Posted on February 26, 2009.

Author: MarketWatch

MarketWatch

Workers who contribute part of their earnings to Social Security often underestimate what it takes to tap the benefits if they become permanently disabled. The process can be tricky and more time-consuming than people expect, and the weak economy appears to be contributing to a surge in applications, experts say.

Some workers who've been laid off and who struggle with multiple debilitating health conditions may find their combined disabilities rise to the level of prohibiting them from working, said Paul Gada, personal financial planning director for Allsup, a Social Security disability claims-services company in Belleville, Ill.

"The realities of the harsh economy have forced them to come to grips with their conditions more," Gada said. "You have to do more introspection."

Applications for Social Security disability benefits rose more than 17% in the first quarter, according to Allsup, which collects a fee only when its clients receive benefits awards. There are 7.4 million people receiving disability benefits that average $1,063 a month, according to the Social Security Administration's most recent data.

The number of U.S. adults reporting a disability increased by 3.4 million between 1999 and 2005, according to a recent report from the Centers for Disease Control and Prevention. More than 47 million people, or an estimated one in five adults, report having a disability. The three most common causes are arthritis, back problems and heart disease.

Those numbers are expected to rise as baby boomers age, with many becoming disabled and being pushed out of the work force. So it can pay to know how to approach the claims process. Here are seven common errors to avoid:

1. Misdefining disability

The first mistake people often make is failing to understand the Social Security Administration's strict definition of disability. It requires that a person be unable to perform any substantial work and have a medical condition that's lasted or is expected to last at least a year or to result in death.

Many people erroneously think they can collect benefits as long as they are unable to do their regular job as opposed to any job, said Frank Darras, a Claremont, Calif., law firm that represents insurance policyholders.

"It's not only what you can do or have been doing but anything they think you're suited for," Darras said.

2. Waiting too long

For those who qualify, a common mistake is waiting too long to start the application process. It takes an average 30 to 100 days from initial application to receive either an award or initial denial, said Robert Pepper, a public affairs specialist for the Social Security Administration. Once a person is approved, there is a five-month wait after the onset of a disability before monthly checks start to arrive.

Delaying getting started means putting off much needed health care benefits as well because Medicare coverage doesn't kick in until 24 months after disability entitlement.

What's more, the earlier you start, the better your chances of freezing your wages for a more favorable retirement-benefits calculation in the future. Waiting too long, or worse, giving up completely can result in lower benefits as a retiree because Social Security factors in your total working years, Gada said. "You're doing yourself a huge disservice."

3. Making financial mistakes

Once you begin, prepare as much as possible for a long haul, both mentally and financially, he said. Use financial-planning basics "to kind of tread water until you get to the point where you get monthly awards and Medicare coverage for medical needs."

One possible exception is if you have a diagnosis that qualifies you for a "compassionate allowance," a system Social Security started last year to fast-track approval for people with 50 different disabling illnesses, including 25 kinds of cancer. Determinations for such cases are often made within seven to 10 days, Pepper said. See the list of compassionate allowances.

4. Being disorganized

In preparing your application, organization is key. Gather your medical records and be ready with lists of the doctors you've seen and medications you've taken. You'll also need documents stating your physician's objective view of your condition, restrictions and limitations, Darras said.

"Present a comprehensive package that Social Security will stand up and take notice of," he said. "You've got to be exceptional."

5. Not being persistent

Once you apply online, over the phone or in person, don't be discouraged if you get rejected the first time. Many people have to appeal and sometimes go before an administrative law judge before being awarded benefits, Darras said.

The good news is that nearly two-thirds of cases that go through a round or two of appeals end with benefits being awarded. The bad news: A backlog of 750,000 cases awaiting decisions at the hearing level and a shortage of administrative law judges mean the process can take as long as two years.

But people shouldn't give up, Darras said. "If you've got 60 days to appeal, appeal on the first day you get a bad decision. Don't pull the covers over your head and wait 50 days to get your appeal in. That will put you behind another million folks waiting for a hearing."

6. Neglecting to get help

Those having trouble getting their applications in order should seek help from an attorney or a nonprofit advocacy group, Gada said.

"This is not a process for the faint of heart," he said. "I can't tell you how many people I know who won't do the simplest tax return. Yet they'll jump in with both feet to the SSDI application process and, of course, get rejected the first time because they didn't know the trick question or weren't able to speak the language of the Social Security Administration."

7. Letting inaccurate information stand

Even people lucky enough not to need disability benefits are wise to compare their annual Social Security earnings statements against their W-2 tax forms for accuracy. Check not just the math that can affect a future claim but personal data, too, especially after a divorce or name change, Darras said. To make a correction, call the Social Security Administration at 800-772-1213.

This article was reported by Kristen Gerencher for MarketWatch.

Published July 9, 2009