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Are you Getting the Most Out of Social Security Benefits?

Social Security Disability is a federally run Disability Insurance program. This program provides an individual health and monthly monetary benefits if they are unable to work due to physical and/or mental conditions. This program is mandatory, and funded from the taxes you have paid into the Social Security system. Not everyone has Disability Insurance coverage. Only individuals who have paid Social Security taxes from their earned income will be eligible for this program. Generally, you must have paid taxes into Social Security for the past 5 out of 10 years to be eligible for this coverage. Also, you must prove you became disabled within 5 years of the last date you paid Social Security taxes.

If you meet Social Security’s definition of disability benefits (not an easy task), then you will be provided not only a monthly benefit but also Medicare health insurance.

How is your Monthly Benefit Calculated?

Do you remember receiving fliers from the Social Security Administration in the mail stating if you became disabled now you would receive X amount? Well that amount that is listed on the form is pretty much accurate as to what you can expect every month. The Social Security Administration determines this amount based upon your average lifetime earnings before your disability began. This amount is unique to every individual. Social Security uses a complex calculation weighted formula to calculate your benefits. To estimate your monthly disability benefits you may visit Social Security’s quick calculator website at, or, you may call your local office to inquire as to your benefit amount. Most individuals receive benefits anywhere from $700-$1,700 per month with the average being approximately $1,200. The maximum benefit you could receive in the year 2016 is $2,639 per month.

When does Medicare coverage begin?

Medicare coverage does not always begin as soon as you are approved benefits. Generally, Medicare goes into effect two years from the date you are eligible to receive disability benefits or your payment effective date. Your payment effective date is determined first by using your disability date. For example January 1, 2016. Once you have your disability date, Social Security imposes a 5 monthly processing fee in which you are unable to receive benefits. So the date you would be eligible to receive benefits is June 1, 2016, which is your payment effective date as well as the date you are eligible for Medicare benefits. An easy way to remember this is your Medicare coverage will go into effect 29 months from your disability date.

Here are some tips you may want to follow so as to obtain the most from your disability benefits.

  1. Apply for the disability program as soon as you stop working due to a medical condition. You are eligible to receive disability benefits 12 months prior to your filing date. People get into trouble with this rule when they wait a few years before applying.
  2. If you are self-employed, remember to pay your Social Security taxes if you want Disability Insurance coverage.
  3. A little-known fact is you may work part-time and still receive your monthly Social Security disability benefits. As long as you do not earn over substantial gainful activity “SGA” (which changes every year), you may receive your salary in addition to disability benefits.
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