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Updated February 20, 2020
Social Security Disability Insurance (SSDI)
Overview
In addition to providing benefits to disabled workers, SSDI
Social Security Disability Insurance (SSDI) is part of the
provides benefits to certain dependent family members.
Old-Age, Survivors, and Disability Insurance (OASDI)
Spouses of disabled workers qualify for benefits if they are
program, commonly known as Social Security. OASDI is a
(1) aged 62 or older or (2) any age and care for an eligible
federal social insurance program that provides monthly
child who is under age 16 or disabled. Children of disabled
cash benefits to insured workers and their family members
workers qualify for benefits if they are unmarried and (1)
in the event of the worker’s retirement, disability, or death.
under age 18, (2) aged 18-19 and a full-time student, or (3)
Workers obtain insurance protection by working for a
aged 18 or older and became disabled before age 22.
sufficient number of years in jobs covered by Social
Security. The program’s SSDI component provides benefits
Cash and Medical Benefits
to nonelderly insured workers who experience severe,
In January 2020, Social Security provided benefits to 9.9
work-limiting disabilities and to their eligible spouses and
million SSDI beneficiaries, including 8.4 million disabled
children. As with Old-Age and Survivors Insurance
workers, 112,000 spouses of disabled workers, and 1.4
(OASI)—Social Security’s retirement and survivors
million children of disabled workers (Table 1), whereas
component—benefits are based on a worker’s past earnings
Social Security provided benefits to 54.3 million OASI
in covered employment. The Social Security
beneficiaries, most of whom were retired workers.
Administration (SSA) administers OASDI.
Table 1. SSDI Beneficiaries, January 2020
Eligibility Requirements
To qualify for SSDI, workers must (1) be below Social
Total
Security’s full retirement age (FRA), (2) be insured in the
Average
Monthly
event of disability, and (3) meet the statutory definition of
Number
Monthly
Benefits
disability. FRA is the age at which unreduced Social
Beneficiary
(thousands)
Benefit
(millions)
Security retired-worker benefits are first payable, which is
Total
9,907
$1,122
$11,119
65-67, depending on year of birth. Workers who have
attained their FRA are ineligible for SSDI.
Disabled
8,360
$1,258
$10,516
Workers
To be insured in the event of disability, workers must have
Spouses
112
$362
$40
worked in jobs covered by Social Security for about a
quarter of their adult lives and for at least five of the 10
Children
1,435
$392
$562
years prior to the onset of disability. However, younger
Source: Social Security Administration (SSA), “Monthly Statistical
workers may qualify with less work experience based on
Snapshot, January 2020,” February 2020, Table 2.
their age. In 2019, SSDI provided disability insurance
coverage to 156 million workers; about 89% of covered
SSDI benefits begin five-full consecutive months after a
workers aged 21-64 were insured for SSDI that year.
worker’s disability onset date. This requirement is known
as the five-month waiting period. Initial benefits are based
To meet the statutory definition of disability, workers must
on a worker’s career-average earnings in covered
be unable to engage in any substantial gainful activity
employment, indexed to reflect changes in national wage
(SGA) due to any medically determinable physical or
levels. The benefit formula is progressive, replacing a
mental impairment that is expected to last for at least one
greater share of career-average earnings for low-wage
year or to result in death. SSA uses an earnings threshold to
workers than for high-wage workers. SSDI-entitled
determine whether an individual’s work activity constitutes
workers’ benefits are generally adjusted each year to
SGA, which the agency adjusts annually for average wage
account for inflation through cost-of-living adjustments.
growth. In 2020, the SGA earnings limit for most workers
is $1,260 per month. In general, workers must have a severe
Benefits for dependents are subject to family maximum
impairment (or combination of impairments) that prevents
provisions, which limit the total amount of benefits that can
them from doing any kind of substantial work that exists in
be paid on a worker’s earnings record. Disabled workers
significant numbers in the national economy, taking into
who also receive WC or certain other public disability
consideration their age, education, and work experience.
benefits may have their SSDI benefits (and those of their
The work need not exist in the immediate area in which the
dependents) offset. In January 2020, the average monthly
claimant lives, nor must a specific job vacancy exist for the
SSDI benefit for a disabled worker was $1,258, and the
individual. Unlike workers’ compensation (WC) or the
total amount paid to disabled workers and their dependents
Department of Veterans Affairs’(VA) programs, SSDI does
was $11.1 billion (Table 1).
not pay benefits for partial or short-term disabilities.
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Social Security Disability Insurance (SSDI)
In addition to cash benefits, disabled workers and certain
Social Security payroll tax rate is 12.4% of a worker’s
disabled dependents qualify for health care coverage under
earnings (6.2% for employers and employees, each). The
Medicare after 24 months of entitlement to SSDI (generally
payroll tax is levied on earnings up to an annual limit,
29 months after the onset of disability). This requirement is
which for 2020 is $137,700. The trust funds also receive
known as the 24-month waiting period. Disability
income from the taxation of a portion of some Social
beneficiaries with amyotrophic lateral sclerosis or end-stage
Security benefits and from interest earned on U.S. securities
renal disease are not subject to the 24-month waiting period
credited to the trust funds for years in which total income
requirement for Medicare.
exceeded total cost.
Termination of Benefits
In 2019, total income to the Social Security trust funds was
In general, SSDI benefits continue until a disabled worker
$1,062 billion, with $144 billion (or 14%) credited to the DI
(1) dies, (2) attains FRA, (3) medically improves, or (4)
Trust Fund. That same year, total cost for the trust funds
returns to work (i.e., earns above the monthly SGA limit).
was $1,059 billion, with $148 billion (or 14%) coming from
Most disabled workers who leave the rolls do so because
the DI Trust Fund. The trust funds held a combined $2.9
they attain FRA. Disabled workers who attain FRA are
trillion in asset reserves at the end of 2019, with $93 billion
transitioned automatically from SSDI to OASI; however,
(or 3%) credited to the DI Trust Fund.
this change generally does not affect the amount of Social
Security benefits paid to them or their dependents.
The Social Security trustees project that under current law
and under their 2019 intermediate assumptions, the trust
Working While on SSDI
funds on a hypothetical combined basis will be able to pay
Disabled workers are afforded a trial work period (TWP)
benefits in full and on time until 2035. Individually, the DI
during which time they may test their ability to work and
Trust Fund is projected to be depleted in 2052, and the
earn any amount for up to nine months (not necessarily
OASI Trust Fund is projected to be depleted in 2034. Upon
consecutive) within a 60-month rolling period without
depletion of the DI Trust Fund in 2052, continuing revenues
having their benefits suspended or terminated. In 2020, any
would be sufficient to pay about 91% of scheduled SSDI
month in which a disabled worker’s earnings exceed $910
benefits, declining to 87% by 2093.
is considered a month of services (i.e., work) and counts
toward the nine-month TWP.
Characteristics of Disabled Workers
SSDI provides benefits primarily to older workers; 77% of
Following the exhaustion of the TWP, disabled workers
disabled workers were aged 50 to FRA in December 2018.
enter an extended period of eligibility (EPE). During the
The most common types of impairments among disabled
first 36 months of the EPE—known as the reentitlement
workers aged 50 to FRA were musculoskeletal disorders
period—disabled workers receive benefits only for months
(i.e., conditions related to muscles, ligaments, tendons, and
in which their earnings are at or below the SGA limit. If
bones). The most common types of impairments among
their earnings exceed the SGA limit during this period, their
disabled workers under age 50 were mental disorders.
benefits are suspended. Disabled workers who earn above
the SGA limit in or after the 37th month of the EPE have
Figure 1. Disabled Workers, by Diagnostic Group and
their benefits terminated. Workers who are terminated due
Age, December 2018
to earnings above the SGA limit but who continue to have a
qualifying impairment retain Medicare coverage for at least
57 months following the end of the reentitlement period. In
2018, about 0.6% of disabled workers were terminated from
the SSDI program due to earnings above the SGA limit.
Program Integrity
SSA periodically reevaluates a worker’s medical status by
conducting a continuing disability review (CDR). The
frequency of a medical CDR depends on the beneficiary’s
likelihood of medical improvement; about half of disabled
workers are scheduled to be reviewed once every three
years. Under current law, SSA must find substantial
evidence of medical improvement during a medical CDR to
find a worker no longer disabled. About 0.5% of disabled
workers leave the SSDI rolls each year due to medical
improvement. SSA also performs work CDRs to determine
if a disabled worker is earning above the SGA limit and if
eligibility for benefits should continue.
Source: SSA, Annual Statistical Report on the Social Security Disability
Insurance Program, 2018, Table 24.
Financing
William R. Morton, Analyst in Income Security
Benefits and administrative costs for Social Security are
financed primarily by payroll taxes levied on covered
IF10506
workers’ earnings, which are credited to the Disability
Insurance (DI) and OASI Trust Funds. The combined
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Social Security Disability Insurance (SSDI)
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