Social Security Disability Insurance (SSDI) benefits are not based upon or affected by your other income or assets (means based). Disability benefits are determined by how much a taxpayer has paid into the program (payroll taxes).
There are four levels in the Social Security Administration's (SSA) review and award system for disability. There is an additional level that takes you out of the SSA system to Federal Court, although only a small percentage of applicants will pass through all five levels.
Level One - Application. Complete the initial Social Security disability application and in most instances, a detailed Activities of Daily Living Questionnaire. There is an extensive amount of paperwork to complete at this initial level. According to the SSA, it is necessary for a doctor to verify information in the application with pertinent medical information and confirm that the disabling condition will last 12 months or longer. Being vague about your work history and exaggerating the impact of your disability will contribute to your claim being denied.
The Disability Determination Services (DDS) in your home state makes the initial disability determination. They secure medical evidence and arrange for one or more consultative exams if there is not enough evidence to make a decision. DDS employees gather and evaluate all the information to arrive at a disability determination. The wait period at level One may take as little as three months, but the average is four to six months. Only about 33 percent of initial applications are approved.
There are 200+ rare diseases and cancers that may qualify someone for a quicker SSDI decision through the Social Security Administration's Compassionate Allowances program.
Level Two - Reconsideration*. If the initial disability application is denied, you have 60 days to ask for a reconsideration or first appeal. Your medical and vocational information will need to be reviewed and updated. At this level, a different individual within the Social Security Administration reviews the application. The SSA will send you a letter explaining how it made its decision. The average wait period at level Two is three to five months. Approximately 89 percent of first appeals are denied.
Level Three - Hearing. If the reconsideration is denied, you must again notify the SSA within 60 days that you will appeal the decision, which moves the application to the hearing level or second appeal. This level takes you from the SSA claims processors and into the hands of an administrative law judge (ALJ). The ALJ will make an independent decision based on the evidence (including all testimony at the hearing). About 20 days prior to your hearing, you will receive a notice indicating the date, time and place of your hearing. The ALJ usually holds the hearing within 75 miles of your home. If the ALJ schedules a hearing, you and your representative, if you have one, should make every attempt to attend.
It is important that you submit any additional evidence you want considered to the ALJ as soon as possible. At your hearing, the ALJ will explain the issues in your case and may question you and any witnesses. The ALJ may ask other witnesses, such as a doctor or vocational expert, to provide information at the hearing. You and any witnesses answer questions under oath. You and your SSDI representative, if you have one, may question any witnesses and submit evidence. After the hearing, the ALJ issues a written decision after reviewing all of the evidence. In some cases, your representative may ask for a decision on the record, which means the ALJ reviews your claim and makes a decision without a hearing. In all cases, the ALJ will send you and your representative a copy of the decision.
Approximately 48 percent of second appeals are awarded to the applicant. The SSA estimates the average time spent at this level was 382 days in 2013. If a disability hearing ends in another denial, the decision can be appealed again.
Level Four - Appeals Council. If the hearing ends in a denial, you have 60 days to ask for a review by the Appeals Council. At this level, the Appeals Council will review the disability hearing decision to determine if it was rendered properly according to the law. Only 1 percent of third appeals result in a favorable decision for the applicant. The SSA estimates the average time to receive a decision on this third appeal in 2013 was 364 days according to the SSA.
Level Five - Federal Court. There is also an additional appeal available which is pursued by less than one percent of claimants -- Federal District Court (FDC). Approximately 70 percent of these appeals are denied with a small amount receiving a decision in FDC that resulted in an award. The remainder of those are remanded (sent back) to the hearing level for an additional hearing.
Award: If your claim is awarded, the general guidelines regarding when to expect payment, including retroactive payments (if applicable), are two to four weeks for claims awarded at levels one and two, and one to three months for claims awarded at levels three and four. These time frames represent an average or general guideline - specific time frames may be shorter or longer.
How much you receive is determined by a complicated formula using the amount of your past earnings that have been subjected to FICA taxes. The average monthly benefit for an individual was $1,146 in 2014. However, your monthly award is dictated by your lifetime earnings so for many people their award could be much higher.
Continuing Disability Review: Your eligibility for SSDI benefits is subject to review at certain intervals after benefits are first awarded. These intervals are based on if your condition is expected to improve. These reviews are usually at one, three, five or seven years. For example, if medical improvement is expected, a "CDR" (Continuing Disability Review) date of one year is established at the time your benefits are awarded.
Check out our presentation on why you should choose Allsup for the Social Security disability process.
*Level two doesn't exist in Alabama, Alaska, Colorado, Louisiana, Michigan, Missouri, New Hampshire, New York, Pennsylvania and two offices (LA N 00057 and LA W 00056) in California.