Written by: Corey Janoff
This post was originally published on our previous blog website on October 10, 2017 and has since not been revised and/or updated.
I was giving a financial planning talk to a group of physicians recently and one of the people in attendance asked, “Doesn’t the government provide me disability benefits if I cannot do my job as a physician?”
The simple answer to that question is, “Most likely, no.” It is actually quite difficult to qualify for federal disability benefits and the benefits are likely to be minimal. The average monthly benefit paid currently is just over $1,000.
According to the Social Security Administration website, 10,457,000 people received disability benefits from social security in the month of August 2017 (that includes 1,715,000 spouses and children of disabled workers).
When Are You Eligible to Receive Benefits?
The amount you will receive if you qualify for benefits is based on how long you have paid into social security. Social Security eligibility is based on credits. Each year, you can earn up to four credits. As long as you earn over $5,200 in a year, you earn all four credits in that year. Generally, you need to have at least 40 credits to qualify for benefits, meaning, you need to work at least ten years before you are eligible for benefits.
Benefits under the age of 31, copied from the SSA.gov website:
- Before age 24 – You may qualify if you have 6 credits earned in the 3-year period ending when your disability starts.
- Age 24 to 31 – You may qualify if you have credit for working half the time between age 21 and the time you become disabled. For example, if you become disabled at age 27, you would need credit for 3 years of work (12 credits) out of the past 6 years (between ages 21 and 27).
That still means you must have some work under your belt. For some young physicians, they don’t have any income history. If you went directly from college into med school and then into your intern year/residency, you may not qualify for social security benefits until you are in your 30’s. So if you get disabled during your residency/fellowship years, you may not receive anything from the government (unless you worked throughout college and med school and earned over $5,200/year).
How to Qualify For Benefits
Furthermore, you have to meet the definition of disability to qualify for benefits. Below is how the Social Security Administration defines disability, copied directly from their website:
The law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
There are a few key components in this definition of disability. The first is, inability to engage in any substantial gainful activity. If I Google the definition of gainful, it says: serving to increase wealth or resources. Substantial is defined as: of considerable importance, size or worth.
This leaves a lot of room for interpretation. What is considered considerable size? How much of an increase do I need to see to be considered gainful?
The disability also must be expected to result in death, or last longer than 12 months. So these are pretty serious disabilities we are talking about. Many disabilities can be overcome. If you are diagnosed with cancer, you can beat cancer. Only in the very late stages, after all treatment options have been exhausted, is it expected to result in death. What if you fracture your back or have a herniated disc, making it excruciatingly painful to do your job? That won’t last longer than 12 months – you can have procedures done to fix those problems and minimize the pain. Once you start going down the path of back surgeries, you likely will continue to have back problems for the rest of your life, making it more difficult or darn near impossible to do your job. Just ask Tiger Woods. But I don’t think the Social Security Administration would consider that a real disability. Heck, you could lie down in your bed, prop up some pillows, and write a blog or complete online surveys to make a living! Disability payment denied.
If the average disability benefit from social security is only $1,000/month, I imagine the threshold for substantial gainful activity is pretty low. Federal minimum wage is $7.25/hour and most states have higher minimum wages. If you work a minimum wage job full-time (40 hours/week), you will make at least $14,500/year. That is about $1,200/month. So if you could work minimum wage and make $1,200/month, you would probably prefer to do that than only get $1,000/month from social security. That is a 20% difference in monthly income!
Bottom line, it is up for interpretation. I am not a disability benefits lawyer, but the way I interpret it is, if you can work at all, in any job, you won’t qualify for social security disability benefits.
You might still qualify for unemployment benefits, state subsidized health plans, Medicaid, food stamps, etc. But federal income benefits are a likely no-go, unless you are really messed up.
If you are capable of flipping burgers, sweeping floors, licking stamps, or greeting people at Wal-Mart, you probably will not qualify for federal disability benefits. Nothing against those occupations, but that is not what most people reading this currently do. Nor would they like to do those jobs, if given the choice.
Will That Physician at My Seminar Be Eligible for Social Security Disability Benefits?
Probably not. And if he could qualify, he would likely be displeased with the change in lifestyle, considering the maximum monthly benefit one can receive is $2,687/month. Most physicians earn well over $10,000/month, once they are done with their training years, so transitioning to a fraction of that will be painful and demoralizing.
I only know one person who is potentially eligible for social security disability. She has something in her brain that gives her seizures. It was diagnosed when she was a child. As she has gotten older, the symptoms have worsened. She is currently in her 40’s. She had her driver’s license revoked, due to her medical condition. She is unable to function in her job as a receptionist/administrative assistant and had to leave the workforce about a year ago. She has been trying to apply for disability benefits through the government for about two years now and still hasn’t been approved.
What to do Now
You don’t want to rely on the government to provide for you. Everyone knows Social Security is underfunded. So is Medicare, Medicaid, and all of the other federal benefit programs. Those programs are designed to be a last resort.
Take income protection into your own hands. Get an occupation specific disability policy, separate from your disability coverage through work (if your employer even provides that benefit), that will protect you if you can’t do your job anymore. As long as you depend on income, you should protect your income as best as you possibly can.
