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Disability and finding financial peace

Caring Voice Coalition’s Senior Patient Advocate Lauren Patrizio offers resources and advice for finding financial peace while navigating the SSA disability process.

Having a disability can be very costly. In addition to extra health-related expenses, most of the 56 million American adults with disabilities today will eventually lose some or all of their income. Yet almost half of U.S. families do not save any of their annual income, and nearly one-third have no retirement savings.

Disability is likely to impact you or someone you know during your lifetime—if it hasn’t already. Social Security Administration (SSA) anticipates one in four of today’s 20-year-olds will be disabled before retirement age. Below, find resources that may help you maintain financial peace if you or a loved one are diagnosed with a disabling condition.

Social Security disability benefits

Social Security disability benefits are designed for individuals who have to stop working due to a disabling condition before they reach full retirement age. How much you can receive under the SSA disability program, if found disabled, varies by benefit type.

Supplemental Security Income (SSI) is a needs-based program that has a federal payout cap of $735 per month. Social Security Disability Insurance (SSDI) benefit amounts are based on taxes paid into the SSA system while working. To determine how much money you would be eligible for, check your quarterly SSA statements (which can be accessed electronically by creating an account on ssa.gov).

(Learn more about the difference between SSDI and SSI here.)

Staying afloat while waiting for SSA benefits

The timeframe for approval varies greatly depending on diagnosis and jurisdiction, but the average SSA disability claim lasts about 2.5 years. If you applied for disability benefits and are awaiting a decision, if you were denied, or if your benefit amount is not enough—you have options for staying afloat. You may even have an opportunity to restructure or omit other payments you are making.

Part-time work:

A few extra dollars each week can make a big difference. Assess your abilities, interests and talents for any way you can earn additional income. While pursuing SSA disability benefits you can work as long as you make less than $1,170 gross (in 2017) per month. Once you begin receiving SSA disability benefits, the income rules change, but SSA does encourage you to work if you can by allowing you to test your capacity. The SSA work guidelines can be found here.

Supplemental Nutritional Assistance Program:

Supplemental Nutritional Assistance Program (SNAP) is a federally funded benefit program (formerly called food stamps). It is the largest program in the U.S. hunger safety net and is state administered. To be eligible for SNAP, most households must meet certain resource and income limits. You’ll need to supply information showing your income, rent or mortgage, utility bills, child support, medical bills, and SSA or Veterans Affairs payments. Collect these documents prior to applying for benefits to save time. If approved, an Electronic Benefits Transfer (EBT) card will be issued and the card can be used to purchase eligible food items for your family at local retailers.

See “10 Steps to Help You Fill Your Grocery Bag Through SNAP.”

Temporary Assistance for Needy Families:

piggy bank financial peaceTemporary Assistance for Needy Families (TANF) is designed to help needy families achieve self-sufficiency. States receive block grants to create and operate programs of their choosing. Programs include childcare assistance, job preparation and work assistance. As the name indicates, the benefits are temporary and there is a lifetime limit on the number of months you can receive these cash benefits. Unlike SSA benefits that can take a lengthy period of time to collect, TANF cash assistance generally begins on the first day following the month the application is submitted.

An applicant must be:

  • Pregnant or responsible for a child under age 19.
  • A U.S. national, citizen, legal alien or permanent resident.
  • Have low or very low income.
  • Be under-employed, unemployed or about to become unemployed.

The Office of Family Assistance website will direct you to your state’s TANF application.

Charitable resources/Others’ help:

Sometimes asking for help is the only way through financial hardship, even though asking for or receiving help can be hard. Try local programs or groups such as churches or food pantries. You will feel more comfortable accepting help if you have a clear picture of your needs. Organizing a list of your expenses and debts and drafting a budget will help. And, remember that your friends and family love you and care about you. If you commit to strong communication, asking for and receiving help from others can be a viable option.

Disability discharge on federal student loans

If SSA finds you disabled, you may qualify for a Total and Permanent Disability (TPD) discharge of certain school loans—meaning your loan will be forgiven. Your SSA notice of award letter (stating that your continuing disability review will be within 5-7 years) is sufficient proof of your TPD. The following loans may qualify for the discharge:

  • William D. Ford Federal Direct Loans (Direct Loan) Program loans.
  • Federal Family Education Loan (FFEL) Program loans.
  • Federal Perkins Loan (Perkins Loan) Program loans.
  • Teacher Education Assistance for College and Higher Education (TEACH) Grant Program service obligations.

For more information, visit the Federal Student Aid website.

Credit card debt settlement

If you accrue debt while waiting for your SSA disability application to be approved, you may have a hard time paying it back. SSA disability payments are automatically protected from being frozen or seized by creditors. Instead of defaulting, you can provide the bank or creditor documentation of your disability benefits along with a letter explaining your inability to make the required payments.

Some banks automatically write off debt when the debtor is placed on permanent SSA disability; others may negotiate and settle the debt for less than what you owe. Just be aware that the forgiven debt is considered taxable income depending on your income level.

If you or a loved are interested in applying for SSA disability benefits or think you may benefit from one of CVC’s financial assistance programs, please contact us at 888-267-1440.

Find more articles on navigating SSA disability here.

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