All About Social Security Disability Insurance

(Because sometimes disabilities happen before retirement)

Christine Lacagnina Written by Christine Lacagnina
Christine Lacagnina
Written by Christine Lacagnina

Christine Lacagnina has written thousands of insurance-based articles for by authoring consumable, understandable content.

paul martin Reviewed by Paul Martin
paul martin
Reviewed by Paul Martin

Paul Martin is the Director of Education and Development for Myron Steves, one of the largest, most respected insurance wholesalers in the southern U.S.

Social security disability insurance

In today’s world, making a living requires hard work. But what happens when you become disabled at a young age and can’t work enough to support yourself, let alone a family? 

Disabilities may leave you unable to perform your former job tasks, potentially leading to huge pay cuts. On top of the medical costs required during your recovery, a lower salary could seriously impact your quality of life.

Fortunately, there’s something called Social Security disability insurance (SSDI) available to help in times of need. Let’s take a closer look at exactly what SSDI is all about, and when and why you might need it.

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What Is Social Security Disability Insurance?

In a nutshell, SSDI is designed to help folks who become disabled before retirement age to receive their benefits early. You can qualify for SSDI benefits from a very young age, but you’ll need to have accumulated work credits to do so. 

Work credits are awarded based on your taxable employment history, and the amount of work credits required to receive benefits increases with age. There are other qualification restrictions, too.

How Do I Qualify for Social Security Disability Insurance?

There are several restrictions on SSDI benefits, but figuring out if you qualify can be as easy as referring to the official list posted by the Social Security Administration (SSA). We’ll take a look at the main requirements to get started.

To qualify for SSDI benefits, you must be:

  • Age 18 or older
  • Blind or unable to work due to a medical condition that’s expected to continue for at least a year or result in death
  • Not currently receiving benefits on your own Social Security record

You must also have the required minimum amount of work credits to apply:

  • Age 18-24: 6 work credits
  • Age 24-31: 12 work credits
  • Age 31 and over: 20 work credits in the past 10 years

Work credits are earned based on your employment history. Workers can earn up to a maximum of four credits per year. As of 2019, workers must make at least $1,039 annually to earn one credit. 

The exact number of credits you receive depends on your wages and other employment specifics. Check out the chart below for a more in-depth overview of work credit and employment history requirements by age.

Age Disabled Credits Needed Years of Work
Under 24 6 1.5
24-30 8-18 2-4.5
31-42 20 5
44 22 5.5
46 24 6
48 26 6.6
50 28 7
52 30 7.5
54 32 8
56 34 8.5
58 36 9
60 38 9.5
62+ 40 10

SSDI doesn’t take your current net worth into account, since it’s based entirely on taxes you’ve paid throughout your working life. You’ll be required to present official documents that prove your disability is predicted to last for at least one year in order to qualify for benefits. 

This often means going through a medical exam before applying for coverage. If your coverage application is denied, you’ll have to wait more than 60 days before applying again.

disability income

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What Does Social Security Disability Insurance Cover?

SSDI benefits allow you to receive a specified percentage of your previous income. As of 2019, the average monthly benefit payout is just under $1,200, with the maximum benefit being $2,788. Your monthly benefit payouts will depend on a few specific factors.

The following factors influence your SSDI monthly benefit amount:

  • The amount of taxes you’ve paid towards Social Security
  • The number of years you’ve been employed
  • Your annual and monthly income
  • Past wage earnings
  • Your location

Your location factors into your monthly benefit amount because SSDI takes your area’s cost of living into consideration. Even if two SSDI applicants have the exact same earnings history and are virtually similar across all other aspects, yet one lives in a major city and the other lives in a small town, the applicant living in the major city will receive a higher benefit amount.

How Do I Apply for Social Security Disability Insurance?

Social security disability insurance application

Since SSDI is not technically a type of insurance but a government assistance program, unfortunately independent insurance agents won’t be able to help you find and sign up for coverage. The only way to apply for coverage is directly through the SSA. You can easily apply online on the SSA’s website.

You’ll need to have information about yourself, your medical history, and your current employment ready before you apply for SSDI. The list of required information is available on the SSA’s website, along with a list of additional documents they may ask you to provide, such as your:

  • Birth certificate
  • Proof of US citizenship
  • W-2 forms
  • Medical records
  • Pay stubs

The SSDI application may be a bit extensive, but it’s also set up in such a way that it lets the applicant know exactly what’s required before and during the application process. If the Internet isn’t your thing, you can also apply for SSDI benefits in person by visiting your local Social Security office.

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Are Social Security Disability Insurance Benefits Taxable?

Maybe. It depends on your total household income. About one-third of all SSDI recipients are required to pay taxes on their benefits, while the other two-thirds don’t receive enough additional income to qualify for taxation on these benefits.

A portion of your SSDI benefits may be subject to taxes in the following scenarios:

  • You’re married and file taxes jointly, AND your household has a combined annual income of $32,000 or more (including half of your SSDI benefits).
  • You’re single and earn more than $25,000 annually (including half of your SSDI benefits).

Your annual income will determine what portion of your SSDI benefits are subject to tax. There are a couple of ways you can calculate the taxed portion of your SSDI benefits, including online Social Security tax calculators or IRS 1040 tax forms. But for starters, you can refer to this handy chart:


Amount of Monthly Income Amount of Annual Income Maximum Portion of SSDI To Be Taxed
0 - $2,083 0 - $25,000 0%
$2,084 - $2,833 $25,000 - $34,000 50%
$2,834 and up over $25,000 85%

Married Couples

Amount of Monthly Income Amount of Annual Income Maximum Portion of SSDI To Be Taxed
0 - $2,666 0 - $32,000 0%
$2,667 - $3,666 $32,000 - $44,000 50%
$3,667 and up over $44,000 85%


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