How to Transition From Work to Social Security Disability

Thursday, 17 November 2016 13: 29
Written by Joni B. Bailey

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One of the most frequent questions I hear from prospective clients goes like this: “My health problems are getting worse and worse. My boss and my co-workers have been picking up the slack for me for a long time. I have used up most of my personal leave days. I have to keep working because I need the health insurance. I know the day is going to come when I have to stop work. ”

When should I stop work and file a claim for Social Security disability benefits?

Every person is unique. The answer to this question depends on many factors. There is no perfect formula that fits every case.

How does Social Security evaluate a claim?

Every claim is evaluated with a five step sequential evaluation.

Question 1: Is the claimant working? Working means earning more than a particular amount of money which is called “substantial gainful activity.” In 2016 this is $1,130.00 per month in gross earnings.

If the answer is “yes” the evaluation stops. This claimant will not qualify for disability benefits. If the answer is “no” the evaluation process moves to the next step.

Question 2: Does the claimant suffer from medically determinable impairments that are severe?  According to the Social Security Administration, “severe” means “interferes with basic work-related activities and lasts 12 months or leads to death.”

If the answer is “no” the evaluation stops. This claimant will not qualify for disability benefits. If the answer is “yes” the evaluation process moves to the next step.

Question 3: Does the claimant suffer from an impairment that meets the criteria called the listing of impairments?

If the answer is “yes” the claimant will qualify for disability benefits (if the condition will last at least 12 months or lead to death) and the evaluation process ends. If the answer is “no” the evaluation process moves to the next step.

At this point in the sequential evaluation the adjudicator or judge will determine what the claimant can still do despite his or her impairments. This is called the residual functional capacity or RFC.

Question 4: Given the claimant’s age, education, work history, and residual functional capacity can the claimant perform any past relevant work? Past relevant work means full time work the claimant performed in the past 15 years.

If the answer is “yes” the evaluation stops. This claimant will not qualify for disability benefits. If the answer is “no” the evaluation process moves to the next step.

Question 5: Given the claimant’s age, education, work history, and residual functional capacity are there any other jobs in the economy that the claimant can perform? At this step the adjudicator or judge will take into account the medical vocational guidelines that reflect the reality that an older claimant (50 and older) is not likely to make a vocational adjustment to an entirely new line of work. (A 53-year-old coal miner is not likely to get a job as a secretary.)

If the answer is “yes” the claim is denied. This claimant will not qualify for disability benefits.
If the answer is “no” the claim is approved.

The bottom line: You will not be approved for Social Security disability benefits if:

  • you are still working, or
  • you can perform a full time job you had in the past 15 years, or
  • there are other jobs you could perform.

How much will my monthly benefit be?

Your monthly benefit is based on how much you have paid into the Social Security system. The formula is complicated. Most people are surprised to find out how small the monthly benefit would be.

You can find out your monthly benefit by establishing a MySSA Account online or by calling the local Social Security field office in speaking to a case worker.

Can I earn money while I am drawing Social Security disability benefits?

Income from passive investments like a 401(k) or a stock portfolio would not disqualify you, but earnings from work, consulting, self-employment, commissions on sales, and income from rental property you actively manage would typically disqualify you if the earnings consistently exceeded the substantial gainful activity level. There are exceptions for persons who are attempting to return to the world of work.

For more information, see this post:  Disabled? Considering Returning to Work? Read About These New Rules Just Announced By the Social Security Administration.

Your medical records and your work records need to tell the same story.

As a Southern Illinois Social Security disability attorney, I generally tell people who are facing a dramatic decline in their health that by the time they file their claim their medical records and their work records need to tell the same story.

If you say you stopped working because of your health but your medical records say absolutely nothing about the difficulties you are having meeting the demands at work, the adjudicator or judge might not believe you.

On the other hand if you have been talking to your doctor about your difficulty meeting the demands of work and you cannot prove that the time you spent at work or the quality of your work has declined, the adjudicator or judge might not believe you.

Document the days you miss work, leave early, and use personal leave days.

Unless a claimant’s impairment was the result of a dramatic injury or a sudden onset of illness, work schedules and personnel records will show a progressively worsening pattern of attendance. Keep records of work schedules, physician-excused absences, reduced paychecks, and personal leave days used.  These records are much easier to maintain while you are still in the workplace than they will be after you have left your job.

Ask your supervisor and co-workers to describe how your work performance has declined.

If your impairments are severe the people you work with will be aware of how your performance has declined. Have a candid conversation with your supervisor. Keep in mind that it is in the best interest of the organization that you help your supervisor and coworkers train the person who will be taking your job. If possible get written statements from your supervisor and coworkers describing how your performance changed and who performed the tasks you could no longer do.

A word of caution at this juncture is warranted. If your work has required physical labor that you can no longer perform, and your supervisor accommodates you by moving you to an office job that is physically easier, this could undermine your ultimate chances of winning your claim if the judge or adjudicator finds that you acquired skills that could be performed in a sedentary job.

Find out if you have private disability insurance or disability waivers for loans and insurance.

Many people have short-term or long-term disability insurance through their employer. Ask the human resources office what benefits you have been paying for during your employment. Many insurance premiums for life insurance and loan payments also have a disability waiver. Find out what the requirements are for qualifying for those benefits. If you submit an application, keep copies of all correspondence, applications, and physician statements in support of the claim.

Make a plan for health insurance coverage between the day your company policy ends and the day Medicare begins.

Medicare begins no sooner than 12 months after your application date or 29 months after your disability onset date. Explore your options. COBRA coverage may seem expensive, but premiums in the private marketplace are expensive, too.

For more information, see this post:  Can You Pass This Quiz About Social Security and Medicare?

Make a plan for up to 2 years without income.

It is impossible to predict which claims will be approved promptly and which ones will take years to resolve. Even if your claim is approved promptly Social Security disability insurance benefits will not begin until the sixth month after the disability onset date. Supplemental security income can begin with the month of filing but assets and income can make you ineligible for supplemental security income.

Adjust your household budget so you can get by on your Social Security benefit check—or less.

Transitioning from work income to disability income will mean reduced household income. If you plan to make up the difference by withdrawals from your investments, there could be penalties. Discuss this with your financial advisor.

Future disability and retirement benefits might be reduced in the next 20 years. Government experts predict that all Social Security benefits will be reduced by approximately 20% by 2034 unless structural changes in the Social Security system are implemented.

Consider the pros and cons of drawing unemployment.

Many people lose their jobs because their performance is affected by their impairments. They file a claim for unemployment benefits and draw those for the maximum amount of time, usually six months. This could be pose a problem in the Social Security claim because the disability adjudicator or judge will see the unemployment claim as evidence that there was some work the claimant can perform. It could also be a problem in the unemployment insurance system because the underlying assumption when you file an unemployment claim is that you are capable of working. Read the instructions very carefully when you file an unemployment claim so that you are not committing fraud.

Consider the pros and cons of working part time.

Reducing work hours to allow time for medical care or rest can be a transition strategy that works for you. But working part-time for many years can actually reduce your monthly disability insurance and retirement benefits because your benefit amount is based on your average earnings over your lifetime. You can use the benefit calculator to estimate your benefits if you work part time for many years.

Have a frank discussion with your doctor—will he or she support you if you file a claim?

Your claim will not be approved unless your medical or mental health records provide adequate evidence of your impairments as well as the functional limits your impairments cause. Many people are embarrassed to ask their doctor about filing for disability benefits. Many doctors do not understand what the definition of disability is in the Social Security system. Some doctors even think they are doing their patient a favor saying they can return to work after an injury or illness.

If your doctor says he or she will support you if you file a Social Security disability claim, keep in mind that the doctor cannot simply say you are “disabled” because that determination rests only with the Social Security Administration.

What you need from your doctor is an unbiased opinion about your diagnoses, your prognosis, and the exertional and nonexertional limitations caused by your impairments.

For more on this topic, see this post:  Get the Right Disability Diagnosis From Your Doctor - Use This Checklist

Remember to breathe!

Aside from making sure that all the loose legal ends are taken care of, transitioning from work to Social Security Disability is a big life change.  This is often a stressful time for my clients.  Take one day at a time, and remember you don't have to go through this alone.  A Southern Illinois disability attorney can give you direction on the legal aspects of your situation while you adjust to changes in your lifestyle.

Joni Beth Bailey is a Southern Illinois Social Security Disability Representative.

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