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What Happens To Social Security Disability Benefits After Age 65?
When a disability prevents you from working and earning a living, your primary, and perhaps only, source of income may be Social Security Disability Insurance benefits. You earned the right to receive SSDI by working long enough to qualify, so the last thing you want to see happen is for the benefits to end as long as you remain disabled.
One of the common concerns a Social Security disability lawyer at MJ Ellis Disability Law hears from someone whose initial application for benefits or appeal has been approved concerns Social Security disability benefits after 65 years of age. To give you a better understanding of the SSDI program and why people have concerns over the loss of benefits upon reaching retirement age, here is a look at how it all works.
How Is Social Security Disability Funded?
Social Security administers two disability programs — SSDI and Supplemental Security Income. Each pays benefits to people who cannot work because of a disabling medical condition. One way the two programs differ is the source of the funds used to pay benefits.
Funds for the SSDI program come from Social Security taxes on employment income and taxes paid on self-employment income through the Self-Employment Contributions Act. These are the same sources that fund Social Security retirement benefits. You must have worked and paid Social Security taxes or unemployment taxes to be eligible for SSDI and Social Security retirement. This is unlike the SSI program that does not require someone to have worked and paid Social Security taxes.
Funding for SSI comes from general funds of the United States Treasury from taxes, other than Social Security taxes, collected from various tax sources, including personal income tax, corporate taxes, and other taxes paid to the federal government. Some states increase the monthly SSI benefits a person receives by supplementing what is received from the federal government. Any questions you have about this program can be answered by an SSI lawyer at MJ Ellis Disability Law.
Congress Changes The Retirement Age
The concern people have about their Social Security disability benefits changing at retirement age may come from knowing that the source of SSDI is the same as for Social Security retirement benefits. It is true that SSDI benefits automatically convert to retirement benefits when you reach the age at which you may collect full retirement, but it does not mean they convert at age 65.
Although 65 years of age continues to be connected in the minds of many people with retirement and collecting Social Security, that may not be true. When it was originally signed into law in 1935, Social Security paid retirement benefits at age 65. That, however, is not the law today.
An amendment to the law in 1983 gradually increased the age at which people became eligible for full Social Security retirement benefits based on the year of their birth. For example, full retirement remained at 65 for anyone born in 1937 or earlier, but a person born in 1938 had to wait until reaching age 65 years and two months. Today, anyone born in 1960 or later must wait until reaching age 67 to retire with full Social Security benefits.
What Happens When You Reach Retirement Age?
At whatever age you become eligible for full-retirement benefits through Social Security, the monthly SSDI benefits end, but you may not notice it because they are immediately replaced by Social Security retirement benefits. Generally, the amount you receive for SSDI is the equivalent of your Social Security retirement benefit at full retirement age, so you should not see a change in the amount you get each month after the conversion.
A situation that could cause your retirement benefit to be greater than what you received through SSDI involves workers’ compensation. If your disability was the result of a work-related injury or illness, you may be entitled to workers’ compensation in addition to SSDI. However, the workers’ compensation you get each month reduces what you are entitled to through SSDI.
The offset for workers’ compensation ends when your benefits convert from SSDI to Social Security retirement, which increases the retirement benefit. The conversion does not affect your eligibility for continuation of workers’ compensation, which is determined through the state or federal programs paying those benefits.
A Word About Early Retirement
If you qualify for early retirement benefits through Social Security at age 62, you may be tempted to apply for it while awaiting approval of your application for SSDI. Before you do, get advice from an SSD lawyer before filing for early retirement.
Early retirement benefits are less than what you receive by waiting until the age for full retirement. The reduction in the amount that you get each month continues after you reach full retirement age.
A consultation and review of your disability by an SSDI lawyer at MJ Ellis Disability Law may reveal options depending on the date of onset of the disability. For instance, a disability onset date that predates your receipt of early retirement benefits may allow you to receive SSDI at the full benefit rate.