08 Mar Can I collect disability if I’m already getting Social Security?

Q. I was denied disability and I took early Social Security because I needed income. I have had medical issues and actually read my denial for disability in the ICU after a ruptured brain aneurysm and subarachnoid hemorrhage stroke. Can you collect disability when you already started collecting Social Security?
— Struggling

A. We sure hope that you are on the mend.

Social Security Disability Insurance (SSDI) provides payments to those who qualify medically, have amassed the necessary work history within a recent time frame and paid Social Security taxes on their earnings.

There is an appeals process that you may wish to look into given that your application for disability was denied, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

She said there is a 60-day period after receipt of the notification during which you can file the appeal.

According to the ssa.gov website, four levels of appeal can be requested: reconsideration, a hearing, review by the Appeals Council or a Federal Court Review. You can find the forms to file an appeal at ssa.gov/forms.

Every applicant also has the right to file a new disability application instead of appealing, but this is a lengthier process as it is essentially starting from the beginning, she said.

“In answer to your question, when an individual is receiving SSDI their benefit `ends’ when reaching full retirement age (FRA), but their payment converts to a retirement benefit under regular Social Security,” Mott said. “The amount of SSDI that was received prior to the switch would have been based on the individual’s expected Social Security payment at FRA.”

Mott said when someone files early for Social Security and is then approved for SSDI disability, the payment amount they receive will be adjusted based on the date when the disability was determined to have started.

The individual’s benefit will switch from Social Security to SSDI and no retroactive payments will be made, she said.

“The SSDI payment will be the equivalent of a full retirement benefit,” she said. “However, once the individual attains full retirement age, SSDI will stop and Social Security payments will resume.”

The Social Security administration will apply a reduction factor that is based on the actual length of the early retirement period and the benefit will be adjusted accordingly, Mott said.

She offered this example: If an individual who would have reached full retirement age at 66 files for early retirement at 62, their benefit is reduced by 48 months or 25%. But if the person is deemed to be disabled at age 64, the reduction factor would count the number of months from age 64 to 66 to determine the percent deduction rather than using age 62 as a starting point. The percent reduction would be only 13.3%

“In the event you are able to prove the disability began before you filed for Social Security you may be eligible to receive your full benefit both as SSDI and as a retirement payment,” she said. “In addition, the difference between the reduced benefit you’ve been receiving as Social Security and SSDI payments may be paid out for up to 12 months.”

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This story was originally published on March 8, 2022.

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