What Is Social Security Disability Insurance?
Social Security Disability Insurance (SSDI) is one of the three basic protections provided by Social Security. The other two are Old Age Insurance and Survivors Insurance (OASI).
When a worker's earnings are stopped or reduced for a year or more because of a severe impairment, the worker and eligible family members can receive monthly cash benefits from SSDI. Benefits continue until the individual dies or is able to work again.
The Social Security definition of disability is very strict. Workers are considered disabled if they cannot do any work in the economy because of their medical condition(s). The disability and the inability to work must last or be expected to last for at least a year or result in death.
Who Pays for SSDI?
Each of 144.2 million workers and their employers pays 6.2 percent of the worker's wages, up to the taxable maximum ($87,000 in 2003) into OASDI. Another 14.6 million self-employed workers pay 12.4 percent (6.2 percent as employer and 6.2 percent as employee). Of the 12.4 percent:
- 1.88 percent is directed to SSDI;
- 10.52 percent is directed to OASI.
Who Are SSDI Beneficiaries?
Disabled Workers. In 2001, more than 6.7 million people were receiving SSDI benefits. Of those, approximately 5.1 million were disabled workers. There were:
- 2.9 million men, and
- 2.2 million women
Of all disabled workers:
- 75 percent are white,
- 18 percent are black, and
- 7 percent are other.
Most SSDI beneficiaries are age 50 and older. Almost two-thirds are aged 50-64; only 2.8 percent are younger than 30.
Of all disabled workers, more than 27 percent are diagnosed with mental disorders other than retardation. Just under one-quarter of beneficiaries are diagnosed with musculoskeletal disabilities.
Families of Disabled Workers. More than 1.6 million individuals receive SSDI benefits as dependent family members of disabled workers. Approximately,
- 1.47 million are children, and
- 165 thousand are wives and husbands.
Included in the 1.47 million children are adult children who became disabled before age 22 and are dependent on the disabled worker. About 57 thousand disabled adult children receive these benefits.
Disabled widow(er)s also may receive Social Security benefits based on their spouse's work record, but these are not SSDI benefits; they are survivor benefits. Widow(er)s who are severely disabled, are age 50 or older, and became disabled no more than 7 years after either the death of their spouse or the last month they were previously entitled to benefits based on the worker's record may be eligible. Widows are the majority in this category. Out of the 200,130 total disabled spouses, more than 195,000 are women.
Do SSDI Beneficiaries Return to Work?
While provisions that encourage beneficiaries to return to work have been enacted over the years, fewer than one in 500 beneficiaries is able to leave the program and return to work.
What Is the Amount of an SSDI Benefit?
An SSDI benefit is calculated using a formula similar to that used for Social Security retirement benefits. The exact amount of an SSDI benefit is based on the disabled worker's age, level of earnings, and time in the work force.
The average monthly disability benefit in 2001 was:
- $789 for a disabled worker,
- $199 for a disabled worker's spouse,
- $230 for a disabled worker's child.
What Part Does Social Security Play in the Income Security of Disabled Workers and Their Families?
For families with a disabled worker, Social Security benefits and earnings represent the largest shares of income-38 percent from earnings, and 38 percent from Social Security. In contrast, others aged 18-64 receive 88 percent of their family income from earnings and 2 percent from Social Security.
How Many Families with a Disabled Worker Would Be Poor without SSDI?
The poverty rate for families with a disabled worker is more than double that for families without a disabled worker: 18.5 percent compared with 9 percent. Without Social Security benefits, the poverty rate for families with a disabled worker would increase from 18.5 percent to 55 percent.
In addition, more families of disabled workers have income between poverty and 125 percent of poverty than others who are aged 18-64 -- 14 percent and 4 percent respectively.
What Happens to SSDI Benefits When the Worker Reaches Age 65?
Benefits for disabled workers are converted from disability to retirement benefits at age 65 and are no longer counted in the category of disabled worker benefits.
- Unless otherwise noted, all data were taken from the Annual Statistical Supplement to the Social Security Bulletin, 2001.
- This Social Security classification includes Asians and Pacific Islanders, American Indians and Alaska Natives, and a subset of the total number of beneficiaries of Hispanic origin. The distribution of disabled workers among these groups is not known.
- They receive survivor benefits as the disabled spouses of deceased workers.
- United States General Accounting Office, 2001. SSA Disability: Other Programs May Provide Lessons for Improving Return-to-Work Efforts. GAO 01-053.
- Families are defined as persons (including the worker) who live together and are related by birth, marriage or adoption.
- Social Security Administration, 2002. Income of Disabled Workers. Table B5 (using 1994 data from the Survey of Income and Program Participation).
Written by Laurel Beedon and Mitja Ng-Baumhackl, AARP Public Policy Institute
May be copied only for noncommercial purposes and with attribution; permission required for all other purposes.
Public Policy Institute, AARP, 601 E Street, NW, Washington, DC 20049