Family caregivers juggle so many responsibilities. Who has time to grasp the intricacies of disability benefits? And how do disability benefits change at retirement? Your job as a caregiver most likely includes managing your loved one's benefits. Make informed decisions to provide continued coverage and care when your family member turns 65.
Social Security Disability Insurance (SSDI) provides income for disabled people who cannot work full-time. To qualify, people must apply for disability. They must meet strict disability criteria and must have earned sufficient work credits through paying into Social Security before becoming disabled. Family caregivers may need to help their care recipient apply for disability.
SSDI pays monthly benefits based on a percentage of the recipient's former wages and hopefully lessens the financial burden of caregiving.
Once approved for disability, recipients receive the same monthly benefit amount until reaching the full retirement age of 66 or 67, depending on their birth year. Coverage continues unless earnings rise above program limits or Social Security finds medical improvement. Reaching age 65 does not affect disability status for SSDI purposes.
The monthly amount paid stays the same after going from SSDI to Social Security retirement. The only change is the funding source from the disability trust fund to the retirement trust fund.
When your loved ones turn 65, it's important to note that this milestone doesn't automatically initiate a disability review. Unlike Social Security Retirement benefits, which kick in at this age, disability reviews for SSDI occur periodically. They are not directly tied to reaching 65.
These reviews evaluate the continuation of benefits based on the persistence of the disability. Family caregivers supporting older adults turning 65 can rest assured this age-related change doesn't directly influence the ongoing assessment of disability. This can be a significant relief for family members who care for someone with a disability. The benefits will continue for as long as the disabling condition persists, which can last a lifetime.
Certain pensions lower payments before age 65 through SSDI's pension offset provisions. For example, people who worked civil service jobs may get pensions that reduce their benefits. Each $2 of pension drops SSDI by $1. So a $1,000 pension lowers a $1,500 check to $500. At 65, the full retirement benefit would resume regardless of pension amount.
Suppose someone receives SSDI based on their spouse's work history. In that case, there might be a change when they turn 65. They might need to switch to a higher retirement benefit based on their work history. Caregivers should tell Social Security about this change.
When collecting benefits, you can only receive one at a time. Once your care recipient becomes 67 (if they were born in 1960 or later), disability benefits automatically switch to the same amount of retirement benefits.
Since benefits are based on past earnings, they often exceed early Social Security retirement payments. For example, a higher wage earner could get $2,000 monthly from SSDI but only $1,500 by claiming Social Security at 62. The amount remains higher when SSDI converts to Social Security benefits at full retirement age.
Some people may qualify for SSDI and Supplemental Security Income, which provides financial assistance to older adults, blind, and disabled people.
In this case, Supplemental Security Income payments are lower, based on the amount of SSDI received. The combined total does not exceed Supplemental Security Income's monthly maximum benefit.
When SSDI converts to Social Security retirement benefits, the recipient may become newly eligible for Supplemental Security Income if their Social Security income falls below Supplemental Security Income limits.
Usually, no, because Disability Insurance is based on your prior earnings. Social Security retirement benefits will equal the SSDI amount you received before age 65.
As your loved ones with disabilities approach retirement age, plan for SSDI, Social Security, and Supplemental Security Income. These programs can be confusing, but support is available to help caregivers ensure they continue receiving the necessary income. Contact your Office of the Aging or the Social Security Administration for additional guidance.
To make the most of available resources, caregivers need to stay informed about any changes in disability benefits. Navigate the system more effectively and provide much-needed care for your loved ones at retirement.
