Safeguard Your Financial Fitness: Know The Complete Protections Of Social Security Disability Insurance

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Understanding the protections of Social Security Disability Insurance. CDIA Financial Fitness Campaign.

In our ever-changing economy, financial fitness is more important than ever for most working Americans. High costs and rising interest rates have many tightening their financial belts. In this environment, it’s important to know the federal protections that are in place with Social Security Disability Insurance (SSDI) should you ever need them. SSDI supports disabled workers when they cannot work due to illness or injury.

The Social Security Administration (SSA) oversees the SSDI program that pays monthly benefits to over 7 million former workers. Nearly 161 million U.S. workers are covered by SSDI through the payment of FICA payroll taxes, which totaled over $20.2 billion last year.

Social Security Disability Insurance

Despite contributing to the program with every paycheck of their working lives, many people don’t know they have earned SSDI with their FICA taxes. In 2024, the average monthly SSDI payment was $1,542, and it maxed out at $3,822, but the program goes far beyond these cash payments. SSDI includes a range of other benefits that can make a significant difference for those living with chronic illnesses or disabilities.

These include:

Medicare coverage: Medical and prescription drug coverage begins 24 months after SSDI cash benefits start.
Protected Social Security retirement benefits: Approval for SSDI triggers a Social Security earnings record freeze that can result in a higher retirement income.
Dependent benefits: SSDI approval can result in benefits for children under 18, adding up to 50% more to an individual’s monthly payment.
Annual cost-of-living adjustments: The COLA is evaluated annually and may raise your monthly income.
LTD Security: If you have private long-term disability (LTD) insurance, it probably requires you to apply for SSDI. Doing this can protect LTD benefits.
Tax Relief: You may not have to pay income taxes on a portion of the SSDI benefit payments you receive each month.
Return to Work: There are powerful incentives to return to work once medically able: free help from a certified Employment Network, protected SSDI and Medicare benefits, and more.
COBRA Extension: The length of your COBRA benefits could be extended an additional 11 months.

There are many unfounded beliefs about SSDI. Some people think SSDI is a fund they’re paying into, and by collecting SSDI, they will reduce the money they receive in the future. This isn’t true. It is a federal insurance program, and FICA taxes are the premium you pay to be covered. It’s actually better for an individual to receive SSDI if they can’t work, because the program protects their future retirement income.

The protection of SSDI covers American workers at a vulnerable time. SSDI is an earned benefit. If you’re unable to work due to a serious disability, filing for SSDI as soon as possible is critical for financial stability and access to healthcare. The income and other benefits it provides safeguard you and your family when you can’t be sure how you’ll provide for them. Work incentives complete the program by providing a path back to work when you’re ready. You’ve paid for these benefits with every paycheck you earned. It just makes good sense to be knowledgeable about your financial fitness with this federal insurance policy.

Steve Perrigo

Steve Perrigo, J.D., is Vice President & Head of Sales and Account Management. He joined Allsup in 2010 following 17 years with the Social Security Administration (SSA) in various roles of increasing responsibility, including Claims Representative, Technical Expert, Operations Supervisor, and Assistant District Manager. Steve leads Allsup’s national account sales activities and provides consultative guidance to client companies by analyzing complex data sets that compare performance against historical measures, Allsup’s business results, and industry benchmarks. His consultation includes leveraging his prior experience with the SSA to identify and analyze macro-level trends with the Social Security Disability Insurance program, and providing timely insights and client updates through channels such as Allsup’s commercial blog. Steve’s educational background includes a law degree from the Nashville School of Law, where he graduated in the top 10 of his class, and a bachelor’s degree from The State University of New York. He currently is an adjunct professor of Social Security Disability Law at the Nashville School of Law.