What is "disability"? Why are so many people afraid of losing it?

In My Humble Opinion
1

I was talking to a truck driver yesterday, and he was saying that he went from a $125k/year job (he owned, IIRC, two trucks) to now making $925/month on disability.

(No, I did not ask him what the disability was. I think it has something to do with his knees.)

He allows as to he is capable of still doing truck driving - maybe not long, 1,000 mile hauls, but from San Antonio-Houston, SA-Dallas, SA-El Paso… no problem.

But only if he’s paid in cash, under the table, because he doesn’t want to “lose my disability”.

He’s not the first I’ve seen with this attitude… that keeping “disability” is more important than working full time and, I guess, making more money than what they’re making on “disability”. I’m not Andrew Wile, but even I can do the math:

$925X12=$11,100 (which I’ll assume for shits 'n giggles is all tax free)

Working at a call center (he’s bilingual) can probably get him $13/hour (that was the advertised rate for bilingual call center employees at US Cellular, in Knoxville (and they pretty much begged for bilingual employees, so you could probably get a buck or two more if you bothered to negotiate)). Assuming he works 30 hours a week, 45 weeks a year: $17,750. Less taxes, etc, he’s still clearing $15k.

Work full-time (37.5 hours a week, 50 weeks a year) and his pay goes to $24,375, or $20k/year with bad tax planning.

And this is for a call center job - I’m sure that he could do better, I just bring it up for comparisons sake.

So, the question(s) are:

  1. What is “disability”? Is it paid by the State? The Feds? The Company?
  2. Why do so many people, once they get it, fight like hell to keep it, or at least fear losing it? It doesn’t sound like a great financial bargain, nor are many of the jobs which one is “disabled” from working cover the entire spectrum of jobs which that person could work?

And, yes, “disability” covers a wide range of problems, and I’m not talking about those cases where the person isn’t capable of working at all, I’m talking more about the type which prevents you from doing one set of jobs, but in no way prevents you from working at something else. Yeah, “Dave” might not be able to be a truck driver anymore*, but he surely can do other things that would go a lot further to replace that $125k/year than a monthly payment of $925 and a series of odd jobs.

*And even that’s not true. He can be a truck driver, but if he does… he’ll lose his disability. He chooses not to lose it.

2

I am not an expert.

If you look at your pay stub, you’ll likely see a line for State Disability Insurance – SDI. In the event you become unable to work due to disability, the insurance kicks in and you get money from the fund you’ve been paying into.

Why fight to keep it? Because it’s ‘free money’. The truck driver gets $11,000/year. If he gets a job he’s supposed to come off of Disability, since obviously he’s not disabled for that position. Let’s say he gets a job for $20,000/year. If he’s paid ‘under the table’, he’s not paying into Social Security or SDI, and he’s not paying taxes. So he gets his $20,000 for the job, and also $11,000 from SDI. $31,000 is better than $20,000 or $11,000. Of course, he’s breaking the law.

Some people can eke out a living on SDI. Not a great living, but certain people think that it’s better than working. So they’ll just take the SDI and do whatever they want instead of having to go to a job.

3

Disability insurance, paid by the company’s insurance provider, which may be a private insurer or a state fund. This may be in addition to workman’s compensation.

Because it’s free money. People are lazy. If you go back on payroll, you are clearly no longer disabled (for the purpose of disability insurance.)

4

There are at least two types of disability benefits - Social Security and private.

Private disability benefits pay out if you can’t do your current job. Those benefits are usually time limited. Essentially, they are a form of insurance, like life insurance only for a severe injury, not death.

Social Security disability is only issued if you are incapable of working at all. (That’s the policy, I’m sure in practice there has been a person or two who has gotten fraudulent benefits). This also entitles someone to Medicare for their medical coverage. So for someone severely disabled enough to get SS disability, they would have to make enough to make up the earnings plus solid health coverage. And being severely disabled, they probably really need the health coverage.

It sounds to me like your example is just someone who is enjoying committing insurance fraud by working under the table and getting disability payments (probably private) on top of it. Social Security disability for just bad knees is really unlikely.

Also, I’m guessing $125K/ year is nowhere near his net income. That sounds a lot more like gross income for a truck driver, of which a lot less was left after expenses.

5

I pay a monthly premium of $137 for disability insurance through my work. You have to be disabled (unable to work a desk job) for six months before it kicks in. I will probably drop it in October. I don’t know too many people who have actually collected on it. I can see it being worthwhile in a physically higher risk job, but for my situation, I’m thinking it’s more cost than it’s worth.

6

I’m on Social Security Disability.

If I work and make over 960 per month, I’m considered capable of returning to work. I’m allowed 9 months then the disability payments stop. If I make between 600(appx)and 960 I am allowed 37 months. Below 600 is considered insufficient and I am allowed unlimited work.

7

DH is on disability as a result of his terminal illness. I’ll hazard a guess at some of your questions:

  • SSDI is paid out by the feds. It is NOT designed to be a lifelong thing for the majority of the people on it; rather, it’s a stop-gap measure while the disabled person attempts to find another line of employment. In DH’s case, while he is considered totally disabled, he has chosen to be considered ‘unable to do the work he is trained to,’ so Vocational Rehabilitation is helping him go back for a technical certification. He may not live long enough to either complete the program or put it to use if he does, but it at least gives him something to do and makes the Feds think they’re helping someone out in exchange for basically giving them their money back. The SS people don’t just hand you a check every month for the rest of your life- there are guidelines involving caseworkers and doctors, and it sounds to me like your truck driver friend is going to run into them sooner or later.

  • What you get paid is based on what you paid into the system, up to a maximum monthly allotment. So if YTDF had actually been making 125K per year, he’d be making quite a bit more in SSDI payments than 925 (in the interest of comparison, DH paid into the system for over 30 years, never made more per year than 40K, and is getting over a thousand in SSDI per month). As Runner Pat says, you can make 960 per month in addition to the SSDI payments, either ‘under the table’ or legally, before the system trips and pegs you as ‘not disabled’ but a lot of people don’t take advantage of that. Those who do are usually trying to make ends meet.

  • For a lot of folks, it take forever to get approved for benefits (it took us nearly a year, and that was with a super-nice, well-connected Voc Rehab guy hand-walking us through the process- a coworker has been trying to get her EXTREMELY disabled husband on SSDI for over two years and isn’t any closer to success)… there may be the attitude of ‘I sure a hell am not going through that again- I’m hanging onto this as long as I can!’

  • If you manage to stay on SSDI for two years, you get Medicare (before that you’re screwed unless you can either afford your own health coverage, have a working spouse, or are disabled due to ALS or kidney failure). That’s another reason why some folks want to hang onto their benefits.

  • Some more reasons: although the money is not tax free, you do get a deduction on your taxes for being disabled. Plus you’re exempt from property tax. AND you get a cripple card to park anywhere you want. :smiley:

  • If you could lay around not doing anything and still pay your bills, would YOU work your ass off? Sure, it might not be as nice as being able to afford quality food or nice electronics or other stuff, but if you don’t know any better or don’t aspire to anything better, why not take advantage of the system?

Incidentally, I think the truck driver is being an asshole, though I don’t think that was one of your questions. :wink:

8

I’m actually on disabilty myself. I’m moderately medically complex. (genetic syndrome)
One of the BIGGEST reasons why I’m on disabilty is so I can get Mass Health. (Medicaid) It’s about the only insurance in my state which covers HAs. (and batteries!) Co-pays for prescription Zoloft through Mass Health is only $2.00. Through my parents’ insurance it’s $20!!!
Since about 30% of folks my age are uninsured , and health insurance rates and costs are sky high, it’s no wonder I’m scared crapless to lose my disabilty.
(and no my disabilty isn’t something like faux "ADD’)

9

As you can see from the prior responses, there are a variety of disability plans. The payments may be made by the State, the Federal Govt or a private company. The premium for coverage may have been paid by you, by your company or as part of your payroll deduction system.

In theory, a disability payment is supposed to keep you on a safe financial footing until you are able to resume work. In theory, if you can’t physically ever do your old job, the disability coverage should allow you to transition into a new career.

There are some people receiving disability payments that are fully capable of going back to work. They are committing fraud and are criminals. The absolute number of these criminals is quite a bit smaller than the general public would believe from all the FOAF stories that are so popular in the retelling.

If you don’t have disability coverage at your workplace (and I don’t mean the Social Security fallback) you might want to price out a policy from an insurance company. Traditionally, most foreclosures were caused by the disability of the primary breadwinner in a family.

10

I wonder if there’s a statistic on what pecentage of people collect off their employer-provided disability policy.

11

I used to work in disability services and, as such, have some information similar as to what others have posted, as well as some further, anecdotal information.

When I was doing strict mental health services for people, I did find a high number who did not want to work at all, and some of them stated that the fear of losing their disability was a chief reason. If you have a low, but fixed, income that also provides some health insurance and low co-pays, that feels more secure to a lot of people than trying to work, losing disability, and then not being able to retain a job and ending up with no income. As bobkitty states, getting approved for benefits takes a long time, and many people are not aware that there are Social Security Work Incentives that will enable someone to qualify for rapid re-instatement should they need to be declared disabled again. There were some people, however, that I felt just didn’t want to work and gave “not wanting to get overwhelmed” or “needing to concentrate on recovery” as reasons, despite the fact that there are studies that show that work is beneficial for mental health clients.

When I worked in Voc Rehab, I had more clients who wanted to work (self-selection, of course). A lot of people, though, only wanted to work up to the amount that would trigger them in the SSA system, what SSA calls “Substantial Gainful Employment”, as described by runner pat. Again, there are Work Incentives that make it a better deal to work over that amount, such as the Ticket to Work program, that allows people to defer medical reviews of disability if they are working towards eventually coming off of cash benefits, or Medicaid buy-in programs that would allow folks like** AboutAsWeirdAsYouCanGet** to pay into their Medicaid benefits on a sliding scale (In Massachusetts, by the way, that is the CommonHealth program, which does cover hearing aids and other durable medical equipment) and not have to worry about lapses in coverage or pre-existing medical conditions.

I think that, more than the people who are committing fraud by choosing not to work or working under the table, more people stay on disability and don’t return to work because the system for returning to work is so incredibly confusing. There are advocates in every state called Work Incentives Planning and Advocacy specialists, but not a lot of people know about them.

12

I have a friend who used to make a living as a private investigator for disability fraud.

13

Thank you, lorene. And everybody else, too!