Red Tape Wraps Disability Benefits

Posted on June 28, 2009.

Author: KRISTEN GERENCHER

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.

Christoph Hitz

Applications for Social Security disability benefits rose more than 17% in the first quarter. There are 7.4 million people receiving disability benefits that average $1,063 a month.

Those numbers are expected to rise as baby boomers age, so it can pay to know the claims process. Here are seven common errors to avoid:

1 Misdefining disability

Many people erroneously think they can collect benefits as long as they are unable to do their regular job. A person must be unable to perform any substantial work and have a medical condition that has lasted or is expected to last at least a year or to result in death. "It's not only what you can do or have been doing but anything they think you're suited for," says attorney Frank Darras, whose Claremont, Calif., firm represents insurance policyholders.

2 Waiting too long

It takes 30 to 100 days from an initial application to receive either an award or initial denial, says 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 valuable health-care benefits as well, because Medicare coverage doesn't kick in until 24 months after disability entitlement.

You'll get a quicker ruling on Social Security disability if you have a diagnosis that qualifies you for a "compassionate allowance," a system to fast-track approval for people with 50 different disabling illnesses, including 25 kinds of cancer. Determinations for such cases are often made within 10 days.

3 Making financial mistakes

Prepare as much as possible for a long haul, says Paul Gada, personal financial planning director for Allsup, a private service that helps with disability claims. 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."

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, says Mr. Darras.

5 Not being persistent

Once you apply either online, over the phone or in person, don't be discouraged if you get rejected the first time. Many people have to appeal before being awarded benefits, says Mr. Darras.

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 decision means the process can take as long as two years.

6 Neglecting to get help

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

"This is not a process for the faint of heart," says Mr. Gada. "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, says Mr. Darras.

To make a correction, call the Social Security Administration toll free at 1-800-772-1213.

Write to Kristen Gerencher