The U.S. federal government has a wide range of programs to help those in need, including health insurance for seniors (Medicare), discounted phone and Internet services (the Lifeline program provides help to low-income consumers), and retirement income through Social Security. Individuals who are ill or disabled often have many questions about Social Security eligibility and benefits, questions they might ask of their trusted financial advisor or accountant. This article presents some of those common questions and the answers that CPAs need to know.

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If One Becomes Physically or Emotionally Disabled, Are There Government Programs to Provide Assistance?

The government has two programs to help individuals who meet the Social Security Administration’s (SSA) definition of disability: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). There is some overlap between these two programs, but qualifying requirements are different for SSDI and SSI, and the benefits and sources of funding differ.

What Constitutes a Disability for SSDI and SSI Benefits?

The dictionary definition of disability differs from the SSA definition of disability; the SSA defines disability as the inability to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment that has lasted, or is expected to last, at least one year, or is expected to result in death. The SSA definition of disability is the same for SSDI and SSI applications.

Children under 18 are considered disabled if they suffer from a medically determinable physical or mental condition that results in marked and severe functional limitations; the impairment must have lasted, or be expected to last, at least one year or result in death.

What Are the Differences Between SSDI and SSI?

SSDI is a federal program funded by payroll taxes for workers who have not yet reached retirement age but have developed a condition that restricts their ability to engage in SGA and that has lasted, or is expected to last, at least one year, or is expected result in death. SSDI essentially “insures” workers who cannot work as a result of a medically determinable impairment. Workers are not, however, paying premiums to an insurance company. Workers are considered insured because they have worked and made contributions to the Social Security system through FICA or other taxes that are taken out of each paycheck; a portion of these taxes goes to fund the SSDI program.

The SSDI program is not dependent upon the individual’s financial situation. To qualify for SSDI, generally, the person must have earned “quarters of coverage” in at least 20 of the last 40 quarters (i.e., 5 of the last 10 years) before becoming impaired by a severe physical or mental disability that has lasted, or is expected to last, at least one year, or is expected result in death.

SSI, on the other hand, is a means-tested government program for individuals who are over 65, as well individuals of any age who are disabled. The definition of disability for SSI is the same as for SSDI.

SSI is funded through general tax revenue but it is administered through the SSA. People who qualify for SSI typically qualify for healthcare through Medicaid as well.

How Is Financial Eligibility for SSI Determined?

The SSA looks at the individual’s income to determine potential eligibility for SSI, dividing income into two categories: earned income (e.g., wages, net earnings from self-employment, certain royalties, money from sheltered workshops) and unearned income (e.g., all income that is not earned, including, but not limited to, Social Security retirement benefits, workers’ compensation, certain Veterans Affairs compensation or pension payments, unemployment payments, pensions, annuities, and rent). Social Security calculates the individual’s “countable income” and then determines eligibility and the amount of SSI payment the individual can receive.

People receiving SSI must report monthly earned income, so that Social Security can monitor ongoing eligibility. Occasional reviews of assets and income may uncover that SSI recipients no longer qualify, followed by a pause in payments until the individual re-qualifies. If an SSI recipient receives a gift, inheritance, or some other windfall that results in excess assets, such events should be reported. SSI payments should cease until the asset requirements can be met once again.

SSA often takes time, however, to determine that an individual is no longer eligible for SSI and continues to send SSI payments despite the ineligibility of that individual. This can result in an overpayment, with SSA demanding many thousands of dollars in repayment. It is therefore very important to keep record of income reporting made to SSA.

For SSI, there is also a limit on how much an individual can own. Individuals with more than $2,000 in “countable assets,” and couples with more than $3,000 in countable assets do not qualify for SSI. (It is important to note that an individual applying for SSI cannot give away countable assets that exceed the allowed amount in order to qualify for SSI. Legal advice is essential.) Some assets do not disqualify the applicant when determining resources, such as a residence and one vehicle.

How Much Does SSI Pay?

In 2022, the maximum SSI payment to a single person is somewhat more than $10,000 per year ($841 per month). Married couples who are both eligible for SSI can receive slightly more than $15,000 per year ($1,261 per month). These amounts change to keep up with the cost of living. Some states add their own payouts to certain people receiving SSI. As discussed above, however, the payment amount can be greatly reduced, or even eliminated, if an individual has too much income.

Which Planning Strategies Can Help SSI Recipients Maintain Eligibility while Benefitting from Assets?

Planning for SSI recipients may involve the creation of a special needs trust. Consider the following example: Art becomes disabled in his teens and is unable to work. He lives at home with his parents for years, collecting SSI because he has little income and few assets. Eventually, Art’s father Wayne dies, so the care of Art largely passes to his mother Paula. At this point, Paula worries what will happen to Art after her death. If Paula leaves her assets to Art, he will lose his eligibility for SSI. Paula is advised to leave her assets to a special needs trust. Her niece Nora will be the trustee while Art will be the trust beneficiary. An attorney experienced in trusts and estates draws up the trust so that it complies with the relevant rules. Art will not own the trust assets that pass from Paula, so he may continue to receive SSI benefits. Moreover, once Nora becomes the trustee of the funded special needs trust, she will be able to distribute its assets to provide Art with an enjoyable lifestyle. (Money from a special needs trust cannot be used for basic needs such as shelter, food, and clothing.)

Are Income and Assets Considered in Assessing Eligibility for SSDI Benefits?

In assessing eligibility for SSDI, there is no limit on the amount of assets an individual can own. Generally, there is also no limit on income individuals can receive from private disability payments, pension payments, 401(k) payouts, and passive income from investments; an individual, however, is unable to work and earn “substantial gainful activity” (SGA). Generally, individuals who earn more than $1,350 per month (gross; the amount changes most years) are considered to be working at SGA. Individuals who own a business can be considered to be working at the SGA level even if they are not grossing $1,350 per month.

What Is the Duration Test for SSDI?

The “duration test” is length of covered work, compared with a worker’s age, that an individual must have in order to qualify for SSDI. Before age 28, someone must have paid into Social Security for 1.5 years; the older the SSDI applicant, the more years required. Someone at age 42 must have 5 covered years, for example, and someone age 50 must have 7 covered years. For those 62 and older, SSDI requires 10 covered years.

One year of work in this calculation requires four credits; these credits are based on the amount of income subject to Social Security taxes, a number that usually increases annually. In 2022, for example, one credit of work requires $1,510 of covered earnings. Thus, someone paying Social Security tax on at least $6,040 of work in 2022 will get one full year counted towards eligibility for SSDI. An individual can earn no more than four quarters of coverage in a given year.

What Is the Recency Test for SSDI?

In addition to the duration test, an SSDI claimant also must show some recently covered work. Again, the applicant’s age makes a difference. For example, someone age 31 or older must have had at least 5 years of covered work (20 credits) within the 10 years immediately preceding the onset of disability.

If an individual passes both the duration and recency tests, SSDI benefits might also be paid to their spouse or children. Once someone has been receiving SSDI for 24 months, that individual usually will automatically qualify for Medicare, regardless of age. (An individual with ALS who is approved for SSDI will immediately qualify for health insurancethrough Medicare.)

How Can One Apply for SSDI?

One can submit an application at After completing the application online, one will receive documents in the mail from SSA that may need to be signed and returned. One can also call the SSA to have a representative make an appointment for a call in which the applicant provides all the required information.

Can One Apply For SSI Online?

No. In order to apply for SSI, one must call the SSA to arrange a phone appointment to provide the required information. In addition, some attorneys will assist in preparing and filing applications for SSI.

Who Decides Whether an Applicant Is Disabled?

The decision process starts with the SSA. Many applications for SSDI fail the recency or the duration tests, leading to a rapid rejection. That does not mean, however, that an SSI application would be similarly dismissed. Many individuals without a sufficient work history apply for SSDI and receive a rejection letter shortly thereafter, without realizing that they actually should be applying for SSI instead.

After an SSDI or SSI claim passes this initial assessment, SSA sends the case to the Disability Determination Services (DDS) agency in the claimant’s home state. DDS reviews the application as well as any supporting evidence that has been provided.

In making its determination, DDS weighs records from healthcare providers and the claimant’s explanation of the disability, as well as the claimant’s educational and vocational background. DDS staffers may request additional information from the claimant’s physicians or send an individual for a consultative examination, if a more complete picture is needed.

If DDS denies a claim for disability, one has 60 days to file an appeal, also called a “request for reconsideration.” After a request for reconsideration is filed, SSA sends the case back to DDS, where a new claim examiner and different medical staff look over the facts of the claim.

If a claim is denied at the reconsideration level, one has 60 days to file another appeal, this one called a “request for hearing.” At the third level, an individual’s claim is adjudicated by an administrative law judge. If the judge denies the claim, there are additional appeal options; but it is significantly more difficult to have a claim approved once the judge has denied it.

How Easy Is It to Qualify?

Most people don’t like to think about disability, but studies show that a 20-year-old worker has a 1-in-4 chance of becoming disabled before reaching full retirement age. In fact, approximately 10 million Americans receive SSDI today. It sounds like it might be easy to qualify for disability once one receives a diagnosis, but in general qualifying for SSDI or SSI is not that easy. Only a few conditions will qualify an individual for SSDI or SSI automatically.

In addition to meeting the SSA’s definition of disabled, an individual must have worked long enough and recently enough in order to qualify for SSDI, or have assets and income below the maximum levels allowed for SSI.

SSDI benefits can be paid for the entire time the person is disabled until one reaches full retirement age. At that point, SSDI transitions to standard Social Security retirement benefits. SSA, however, often has a continuing disability review (CDR) for individuals receiving SSDI or SSI. During a CDR, SSA will ask for updated medical records and determine whether that individual remains disabled.

Does Someone with a Disease on the SSA’s “Listing of Impairments” Automatically Qualify for Benefits?

A medical condition only automatically qualifies for disability benefits if the individual’s medical records document the criteria specified by SSA in its “Listing of Impairments.” This listing can be found online (

Most common medical conditions are included in the listings, though not all are. Note that the medical conditions are divided into 14 categories (e.g., musculoskeletal disorders, neurological disorders, cardiovascular system disorders, respiratory disorders, skin disorders, immune disorders, mental disorders). For conditions included in the listings, the SSA publishes criteria specific to each condition that, if met, automatically qualify an individual as being medically disabled; it can be difficult, however, to meet the criteria for a listing.

For example, in order to meet the listing for abnormality of a major joints in any extremity (such as osteoarthritis), an individual must have, among other requirements, an impairment-related physical limitation of musculoskeletal functioning that has lasted, or is expected to last, for a continuous period of at least 12 months, and medical documentation of at least one of the following: 1) a documented medical need for a walker, bilateral canes, or bilateral crutches, or a wheeled and seated mobility device involving the use of both hands; 2) an inability to use one upper extremity to independently perform work-related activities involving fine and gross movements and a documented medical need for a one-handed, handheld assistive device that requires the use of the other upper extremity or a wheeled and seated mobility device involving the use of one hand; 3) an inability to use both upper extremities to the extent that neither can be used to independently perform work-related activities involving fine and gross movements.

As seen in the above example, simply being diagnosed with osteoarthritis of major joints is not sufficient to meet the relevant SSA listing. That does not mean, however, that such an individual cannot be found disabled based upon a lesser level of osteoarthritis. A disability attorney might also be able to provide guidance.

Are There Other Documents That Might Need to Be Provided?

Applicants should be prepared to provide additional information, such as information about work history and earnings over the last 15 years, citizenship status, and any workers compensation benefits received.

SSI applicants should also be prepared to answer questions about household assets, living situation, and any gifts received from other individuals or charities.

What Is the Likelihood of a Claim Being Approved?

Submitting all documents correctly is no guarantee that an application will be approved. In fiscal year 2021, only 36% of claims were approved at the initial level.

Applicants who are not approved for disability at the initial level have 60 days to appeal (request reconsideration). If that appeal fails, the disabled individual can try again and appeal (request a hearing) to an SSA administrative law judge.

Approximately 12.5% of claims were approved at the reconsideration level; approximately 50% of the claims reaching the next level were approved by administrative law judges.

How Can an Applicant Increase the Chance of SSDI Approval?

The most important thing one can do to approve the chance of SSDI approval is to consistently receive treatment for all medical conditions in a timely manner and follow the advice of medical providers.

It takes many months to get through each stage of the application process (initial, reconsideration, and hearing). It is not unusual for it to take approximately two years from the time one files an initial claim to the time one receives a decision from an administrative law judge. Therefore, it is extremely important to provide all necessary documentation at the earliest stage possible. A lawyer can help clarify which criteria must be met for an individual’s specific condition.

Disability attorneys can help avoid potential pitfalls that might cause a claim to be denied and also secure the maximum amount one receives as back pay. Most disability attorneys receive no money upfront and get paid only if one’s claim for SSDI or SSI is approved with back pay; usually, disability attorneys receive 25% of back pay, up to the cap set by the SSA (which, effective the end of November 2022, will be $7,200). If the disability attorney does not succeed in procuring benefits, the client usually owes nothing for services provided.

Sidney Kess, JD, LLM, CPA, is of counsel to Kostelanetz & Fink. He is a member of The CPA Journal Editorial Advisory Board.
Aaron Moss, JD, a disability attorney in private practice in Baltimore, Md., assisted with the preparation of this article. He previously worked as an attorney advisor-decision writer at the SSA.