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More about SSDI and Retirement-Benefit Computations
by James Gashel
From the Editor: Here is another set of e-mail exchanges between James Gashel, NFB Director of Governmental Affairs, and an NFB member with frequently asked questions about the transition from Social Security Disability Insurance to the Social Security retirement benefit. We hope that the information will assist others facing the same perplexities.
November 30, 2001
In the November Braille Monitor (Vol.44, No. 10), you were kind enough to provide information on the Social Security Administration's SSDI [Social Security Disability Insurance] program. One of the questions posed concerned the benefit amount blind persons would be eligible to receive if they retired at age sixty-two (or older). My question is similar but not directly addressed in your article.
I am fifty-eight years of age, on SSDI, and able to work part‑time. My monthly income is less than the amount Social Security considers to be Substantial Gainful Activity (SGA). Over the last several months I have tried to secure a straight answer from them on what will happen when I turn sixty-two, sixty-five, or an older age. As usual the answers I have received are not consistent with each other.
I have been told that my current SSDI benefit amount will apply (with the increases) when I reach those ages and also that, because my earnings have been so low, I will receive the minimum retirement benefit when I turn sixty-two. (SSDI will automatically terminate at age sixty-two.) Since the difference is significant, it is important for me to learn how, at least under the existing statutes, regulations, codes, and other governing provisions, the benefit amount after ages sixty-two; sixty-five; and, if I can work that long, an older age, will be determined.
Can you provide some advice and counsel? I am most appreciative of any assistance or direction you can provide.
December 3, 2001
Even though you are continuing to work, your benefits will continue without change, other than cost-of-living adjustments. In fact, it is possible, if you have earnings of around $14,000, that an additional increase should be made beyond just the cost of living. The earnings you now have are called "post‑entitlement earnings." If one or more years of post‑entitlement earnings are higher than one or more of the pre‑entitlement years of earnings used to compute your current benefits, the higher, post‑entitlement year or years are supposed to be substituted in your earnings record for any lower years used to calculate your benefit. This procedure is called a recomputation.
The Social Security Administration is supposed to perform the recomputation procedure automatically, but I find that it often doesn't happen that way. Any blind person who is receiving Disability Insurance benefits and still working at below substantial gainful activity should request a recomputation if the only increases have been cost of living over the years. Bear in mind that recomputation adjustments are not usually made at the same time as cost of living adjustments. In fact, they can come at any time. Also no one can lose benefits by requesting a recomputation unless an error has previously been made and is discovered in the recomputation process. In other words, if your earnings for a particular year are not high enough to be substituted for one of the pre‑entitlement years used in the calculation, this will not result in a benefit decrease.
In asking for a recomputation, you should definitely specify that you would like to have all years of post‑entitlement earnings considered. I say this because any adjustments that are due will be made, no matter how long ago the post‑entitlement earnings occurred. This also means that you could receive a very large make‑up payment and continuing higher benefits resulting from a recomputation.
Finally, you asked what happens when you become age sixty-two, and the answer is nothing different. Under the Social Security Act you are still under a period of disability until you become age sixty-five. You are not considered to be under early retirement. You are still disabled, and all of the rules that applied before age sixty-two still apply until age sixty-five.
At age sixty-five all of the disability rules go out the window, and you will be transferred to retirement benefits. In fact, you really won't realize that this has happened since there is absolutely no change in the benefit amount resulting from reaching age sixty-five. However, you should remember that there is no earnings limit at age sixty-five, so it doesn't matter how much money you earn, your benefits will still continue regardless, and, because of recomputations that may be possible, the higher your earnings at age sixty-five and beyond, the higher your benefits above the cost-of-living changes.
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