Social Security Administration Issues Final Rule to Simplify Disability Evaluation Process

The Social Security Administration offers two programs that provide financial assistance to seniors and other persons living with disabilities: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). SSI determination is based on age/disability and limited income and resources, while SSDI is based on disability and work credits.

Last year, more than 1.8 million people applied for disability benefits through both SSDI and SSI. In response to President Biden’s Executive Order on Transforming Federal Customer Experience and Service Delivery to Rebuild Trust in Government, the Social Security Administration recently issued a final rule to simplify the application process for both programs. The goal is to reduce administrative burdens for applicants and help more people with disabilities receive government benefits and services if they are eligible.

What Is Social Security Disability Insurance, and How Do You Qualify?

According to the Centers for Disease Control and Prevention (CDC), as many as 27 percent of adults in the US live with some form of disability. More than 12 percent of these people report serious mobility challenges that prevent them from walking or climbing stairs. This makes it difficult for many to return to work and perform their jobs.

Social Security Disability Insurance (SSDI) pays monthly benefits to permanently disabled adults age 18–64 who are unable to return to work and to certain family members. Specific eligibility criteria apply:

• To be eligible for Social Security Disability Insurance, you must be living with what Social Security defines as a permanent and total disability.
• A permanent and total disability is one that “significantly limits your ability to do basic work-related activities, such as lifting, standing, walking, sitting, or remembering” for at least 12 months.
  • It prevents you from engaging in any other “substantial gainful activity.”
  • It inhibits you from doing the work you used to do.
  • It hinders your ability to adjust to a new type of work.
  • It is likely either to last a year or more or result in death.
• There are special rules for people who are blind or have low vision, and for surviving spouses, divorced spouses, and children of deceased SSDI beneficiaries. Certain members of your family may be eligible for benefits based on your work history. They include:
  • Your spouse, if your spouse is age 62 or older.
  • Your spouse at any age, if your spouse is caring for a child of yours who is younger than age 16 or who is disabled.
  • Your unmarried child, including an adopted child, or, in some cases, a stepchild or grandchild. The child must be younger than age 18 (or younger than 19 if still in high school).
  • Your unmarried child, age 18 or older, if your child has a disability that started before age 22. The child’s disability must also meet the definition of disability for adults.
  • The disabled person must be “insured,” meaning that person worked long enough and recently enough and paid Social Security taxes on those earnings.
• The number of work credits you need to qualify for disability benefits depends on your age when your disability begins. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year your disability began. Younger workers may qualify with fewer credits. Social Security determines work credits based on your annual earnings or self-employment income, provided that you and your employer properly pay part of your earnings toward Social Security. You may earn a maximum of four credits per year (in 2024, you earn one work credit for every $1,730 in wages you make, up to a maximum of $6,920).
• You must already have been disabled for five consecutive months to qualify. Once you fulfill this “waiting period,” Social Security will begin paying your benefits. These benefits will continue up to the time that you can resume work and may be retroactive for up to 12 months in certain cases.
  • There is one exception to this requirement, often called the Social Security disability 5-year rule, which applies if you are able to return to work following a period of disability but need to reapply for SSDI. In this instance, the waiting period is waived as long as you previously were entitled to benefits “any time within five years of the month you again became disabled.”

Please note that many adults with disabilities qualify for SSDI based on their parent’s work record through the Disabled Adult Child (DAC) Program, and often these same adults were receiving SSI until one of their parents retired or died, thus entitling the adult child to receive the DAC monthly income benefit, which is typically higher than SSI.

According to the Kaiser Family Foundation, more than 8.3 million adults received SSDI benefits in 2021 — representing 4.1 percent of the US population age 18-64. The new final rule, which I will describe below, makes it easier for those with disabilities to qualify for SSDI by lessening the work history required to apply.

Recent Change Due to the New Final Rule Affects Social Security Disability Insurance and Supplemental Security Income

Social Security recently published a new rule that reduces the period it considers when determining whether a person has past relevant work. Beginning June 22, 2024, when determining past relevant work, the agency will review only five years of past work. The previous policy required people to provide detailed information about 15 years of work history, which was difficult for many individuals to remember and/or provide, and often led to incomplete or inaccurate reporting. In addition, work at a specific job is no longer relevant if that job lasted less than 30 calendar days.

The new rule makes it easier for people applying for benefits by focusing on their most recent relevant work activity while still providing enough information to continue making accurate determinations. It will significantly reduce the time it takes for applicants to fill out Social Security’s work history forms, making it much easier and quicker to apply for benefits.

How is Social Security Disability Insurance Different than Supplemental Security Income?

Social Security Disability Insurance is different from Supplemental Security Income because SSDI is for people who are disabled and have a qualifying work history. SSI is for people who are over 65 or disabled and have a very low income (qualifying work history is not required). For more details on the differences between SSI and SSDI, please read “FAQ: SSI vs. SSDI — What’s the Difference?” on our website.

The Supplemental Security Income (SSI) program was created to provide financial support to older adults and people with disabilities (regardless of age) with limited income and resources. In December 2023, there were more than 2.4 million SSI recipients over the age of 65, representing 32.4 percent of all people receiving SSI. To be eligible for SSI, you must meet the following criteria:

• You are at least age 65 or blind or disabled.
• You have limited income from a pension, wages, or other sources.
  • Your income must fall below a monthly maximum before this calculation is done. The more income you have, the lower your SSI benefit will be. Monthly maximum income to receive SSI benefits is:
    • $1,971 for individuals whose income is only from wages.
    • $963 for individuals whose income is not from wages.
    • $2,915 for couples whose income is only from wages.
    • $1,435 for couples whose income is not from wages.
  • Income is defined as “any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter.” The SSA disregards some income, including some earned income. What remains is called your countable income. Countable income is then subtracted from the monthly federal benefit to determine your payment.
• You have limited resources (items you own).
  • If you are 65 or older and are not disabled or blind, your eligibility for SSI benefits is determined by how much money you have coming in and the value of other resources you may have.
  • Resources are any nonexempt assets, which can include cash, vehicles, stocks, bonds, cash value life insurance, etc. Individuals can have up to $2,000 in resources, and couples can have up to $3,000.
  • Not all resources and income sources count when applying.
• You are a US citizen or national or noncitizen who meets certain criteria.
• You live in one of the 50 states or the District of Columbia.
• There are other SSI eligibility requirements to meet if you are disabled or blind.

Your maximum SSI benefit amount increases with federal cost-of-living adjustments (COLAs). Please see our Key Elder Law Dollar Amounts resource for details on the 2024 maximum SSI benefit amounts. The Social Security Administration (SSA) has an SSI tool that can help you see if you are eligible. However, to receive a formal determination of eligibility, you must apply for benefits. Please note that if you qualify for SSI, you can usually qualify for benefits from the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. Medicaid is incredibly complicated, so it’s best to get the assistance of an experienced Elder Law attorney, such as myself.

Does the Final Rule Impact Supplemental Security Income in Other Ways?

As part of the final rule, Social Security announced it will reduce other barriers to access the SSI program as well, by updating the definition of a public assistance household. In another major change, the agency announced it will exclude the value of food from SSI benefit calculations beginning September 30, 2024, meaning the agency will no longer include food in ISM (in-kind support and maintenance) calculations. In 2005, the Social Security Administration removed clothing from the definition of income and the definition of ISM. Now, beginning in September, with the removal of food from the definition of ISM, the only remaining item of ISM is shelter expenses.

However, the agency is also changing how it looks at shelter expenses for people in 43 states, as the agency has also announced that beginning September 30, 2024, it will expand its rental subsidy exception, currently only in place for SSI applicants and recipients residing in seven states, as a nationwide policy. In those seven states, rental assistance, such as renting at a discounted rate, was less likely to affect a person’s SSI eligibility or payment amount. The new rule extends the same advantageous policy to all SSI applicants and recipients nationwide. This will increase the monthly benefit amount some people are eligible to receive and will allow more people to qualify for critical SSI payments.

Social Security Disability Insurance and Supplemental Security Income Are Complex

Navigating the complexities of SSI and SSDI is crucial for individuals seeking financial assistance due to disability and for parents of children with disabilities who are trying to establish Special Needs Trusts or Medicaid eligibility. To learn more about SSI and SSDI, please visit the Social Security Administration website.

Do You or a Loved One Have a Disability?

Proper Estate Planning and asset protection planning for yourself or a child with a disability is often crucial. Due to the complexity, it is important to seek the help of a highly experienced Elder Law attorney, who is also an expert in supplemental needs trusts to assist with this planning. The existence of a properly-drafted trust will not affect eligibility for benefits. For children with special needs who have turned 18 and are capable of signing Incapacity Planning documents such as a power of attorney and an advance medical directive, it is strongly suggested that they sign these documents as soon as possible. At the Farr Law Firm, our proprietary 4 Needs Advance Medical Directive® includes our proprietary Long-term Care Directive®, an extremely detailed and comprehensive planning document that can be used in addition to, or in lieu of, a formal life care plan or letter of intent for a disabled loved one. Many of these individuals will also benefit from supported decision-making, including a supportive decision-making agreement, which the Farr Law Firm prepares.

Special Needs Planning, Retirement Planning, and Estate Planning at the Farr Law Firm

When it comes to Special Needs Planning, Estate Planning, and retirement planning, the time to start planning is now. The attorneys at the Farr Law Firm can guide you through this process. Please contact us to make an appointment for an initial consultation:

Estate Planning Attorney Fairfax: 703-691-1888
Special Needs Planning Fredericksburg: 540-479-1435
Elder Law Attorney Rockville: 301-519-8041
Elder Care Attorney DC: 202-587-2797