Financial Problems Usually Occur in Social Security Disability Cases
Most applicants for social security disability do not realize at the outset of their claim just how long it takes to be approved for benefits, and are ill-prepared for the financial challenges that await them during the disability determination process. While it is true that some disability applicants are approved for disability fairly quickly the first time they file a claim, this is certainly not the case for the (vast) majority.
The average wait for a decision on a disability claim is 3 to 4 months; however, the disability determination services (DDS) agency denies 7 out of 10 claims on average, and less than 8 out of 10 claims are approved on appeal.
The odds of approval at the second level of appeal, a hearing before an administrative law judge, are much better (more than half of all disability claimants win benefits when they appear before a judge). Yet, the wait for an administrative hearing is a year or two in some places due to a huge increase in the number of disability cases now being filed, and after the hearing it could be another year before the judge’s written decision is ever handed down.
What does this mean for most disability claimants? Simply this: It could very well take up to three years to begin receiving monthly disability payments from social security disability (if you win), so it’s best to plan for financial problems before they are upon you. Here are some things to keep in mind when you contemplate how to stay afloat while waiting on your disability payments:
1. Do not plan to use your credit card or take out a line of credit on your home to make ends meet. If you have absolutely no other recourse, you will have to do what you can to survive, but sacrificing your future financial solvency is never a good idea. Remember that when your sole source of income is disability, it may be extremely difficult to be approved for any other major lines of credit, including a new mortgage. Guard the financial relationships you currently have with banks and creditors, as it will not be easy to establish new lines of credit in the future.
2. If you have been thinking about a consolidated loan to pay off your debts at a lower interest rate, the time to take this step is before you begin the disability determination process, and while you are still employed if possible. It may be difficult (if not impossible) to get a consolidated loan at a low interest rate when you are no longer employed.
3. Begin to look into social services available in your area. Food stamps, free health clinics, state-funded insurance programs, etc., are available. Contact your local county health department and ask for social services, which should be able to provide you with contact information for free services. Do not be ashamed to take advantage of every free or low-cost alternative available to you, because it could very well make the difference between keeping your home and your credit intact losing everything. Disability payments, while certainly helpful, are not really enough to pull anyone out of a deep financial hole—do everything you can to protect the assets you have acquired up to this point.
4. Do not purchase unnecessary items. No need to hide your head in the sand on this one—the fact is that life will be different on disability than it was when you had a paycheck coming in every month. Downsizing is a reality that disability applicants must face, and the sooner the better. Just keep in mind that when you are approved for benefits you will have a better grasp of your financial situation and perhaps be more generous with your budget. Until then it’s best to err on the side of caution and buy only the necessities.
If you plan ahead for the worst, you will find that although your wait for disability benefits will be difficult, it will not necessarily be financially devastating.
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Social Security Disability Secrets
Social Security Disability Benefits Questions
The average wait for a decision on a disability claim is 3 to 4 months; however, the disability determination services (DDS) agency denies 7 out of 10 claims on average, and less than 8 out of 10 claims are approved on appeal.
The odds of approval at the second level of appeal, a hearing before an administrative law judge, are much better (more than half of all disability claimants win benefits when they appear before a judge). Yet, the wait for an administrative hearing is a year or two in some places due to a huge increase in the number of disability cases now being filed, and after the hearing it could be another year before the judge’s written decision is ever handed down.
What does this mean for most disability claimants? Simply this: It could very well take up to three years to begin receiving monthly disability payments from social security disability (if you win), so it’s best to plan for financial problems before they are upon you. Here are some things to keep in mind when you contemplate how to stay afloat while waiting on your disability payments:
1. Do not plan to use your credit card or take out a line of credit on your home to make ends meet. If you have absolutely no other recourse, you will have to do what you can to survive, but sacrificing your future financial solvency is never a good idea. Remember that when your sole source of income is disability, it may be extremely difficult to be approved for any other major lines of credit, including a new mortgage. Guard the financial relationships you currently have with banks and creditors, as it will not be easy to establish new lines of credit in the future.
2. If you have been thinking about a consolidated loan to pay off your debts at a lower interest rate, the time to take this step is before you begin the disability determination process, and while you are still employed if possible. It may be difficult (if not impossible) to get a consolidated loan at a low interest rate when you are no longer employed.
3. Begin to look into social services available in your area. Food stamps, free health clinics, state-funded insurance programs, etc., are available. Contact your local county health department and ask for social services, which should be able to provide you with contact information for free services. Do not be ashamed to take advantage of every free or low-cost alternative available to you, because it could very well make the difference between keeping your home and your credit intact losing everything. Disability payments, while certainly helpful, are not really enough to pull anyone out of a deep financial hole—do everything you can to protect the assets you have acquired up to this point.
4. Do not purchase unnecessary items. No need to hide your head in the sand on this one—the fact is that life will be different on disability than it was when you had a paycheck coming in every month. Downsizing is a reality that disability applicants must face, and the sooner the better. Just keep in mind that when you are approved for benefits you will have a better grasp of your financial situation and perhaps be more generous with your budget. Until then it’s best to err on the side of caution and buy only the necessities.
If you plan ahead for the worst, you will find that although your wait for disability benefits will be difficult, it will not necessarily be financially devastating.
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