Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

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Social Security Disability Insurance (SSDI):

The Five-Month Waiting Period for Benefits

(name redacted)

Analyst in Income Security

January 24, 2014

Congressional Research Service

7-....

www.crs.gov

RS22220

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

Summary

Social Security Disability Insurance (SSDI) is authorized by Title II of the Social Security Act

and provides income replacement for eligible individuals who are unable to work due to a longterm injury or illness that is expected to last at least one year or result in death. Current eligibility

requirements include (1) verification of an applicant’s disability, (2) filing a claim, (3) a “recent

work” and “duration of work” test, (4) verification that an individual has not reached normal

retirement age, and (5) a five-month waiting period from disability-onset.

In implementing the five-month waiting period for SSDI benefits, Congress sought to set a time

frame that would be long enough for a short-term injury or illness to be corrected, but would also

deter individuals who can work from applying for benefits. The first month counted as part of the

waiting period can be no more than 17 months before the month of application, and benefits can

be applied retroactively for up to 12 months. The Social Security Administration (SSA)

encourages eligible individuals to apply for benefits as soon as possible after the onset of a

disabling condition.

The waiting period does not apply to individuals who have been previous recipients of SSDI in

the five years prior to any current disability. Several other programs, such as Supplemental

Security Income (SSI), temporary disability insurance, workers’ compensation, unemployment

compensation, and private disability insurance, can provide funds for eligible SSDI applicants

facing financial hardship during the five-month wait period.

Congressional Research Service

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

Contents

The Five-Month Waiting Period for Social Security Disability Insurance Benefits ........................ 1

The Five-Month Waiting Period ................................................................................................ 1

Retroactive Benefits .................................................................................................................. 2

Exception to the Five-Month Waiting Period ............................................................................ 2

Legislative History of the SSDI Waiting Period .............................................................................. 2

Congress’s Justification for Instituting a Waiting Period .......................................................... 2

Changes to the SSDI Waiting Period ......................................................................................... 3

Potential Income Supports During the Five-Month Waiting Period ................................................ 4

Supplemental Security Income .................................................................................................. 4

Temporary Disability Insurance ................................................................................................ 4

Workers’ Compensation............................................................................................................. 5

Unemployment Compensation .................................................................................................. 5

Private Disability Insurance....................................................................................................... 6

Impact of the Five-Month SSDI Waiting Period ............................................................................. 6

Contacts

Author Contact Information............................................................................................................. 7

Acknowledgments ........................................................................................................................... 7

Congressional Research Service

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

The Five-Month Waiting Period for Social Security

Disability Insurance Benefits

Title II of the Social Security Act provides that certain individuals may be entitled to Social

Security Disability Insurance (SSDI) benefits under the federal Old Age, Survivors, and

Disability Insurance (OASDI) program if they meet the following statutory requirements:1

•

The individual’s medical condition meets the definition of disability as specified

in Section 216 of the act;2

•

The individual has filed a claim for disability benefits;

•

The individual is insured, generally requiring either a work history or the work

history of a parent or spouse, as specified in Section 214 of the act;3

•

The individual has not reached normal retirement age as provided in Section 216

of the act;4 and

•

The individual has completed a five-month waiting period.

The Five-Month Waiting Period

The waiting period for SSDI benefits consists of five consecutive calendar months beginning with

the first full calendar month in which a covered individual satisfied the test of disability. If an

individual’s disabling condition began before he or she met the insurance requirements, the

waiting period would begin with the first full calendar month after insured status was gained.

During this waiting period, SSDI benefits cannot be paid. It is important to note that this waiting

period begins at the onset of the disabling condition and is not affected by the date a worker

applies for SSDI benefits. Workers are encouraged by the Social Security Administration (SSA)

to apply for benefits at the onset of their disability. The first month counted as part of the waiting

period can be no more than 17 months before the month of application and thus, retroactive

benefits are limited to 12 months from the date of application.

For more information on the SSDI program, see CRS Report RL32279, Primer on Disability Benefits: Social Security

Disability Insurance (SSDI) and Supplemental Security Income (SSI), by (name redacted).

42 U.S.C. §416(i). A person is disabled under the terms of the act if he or she is unable to engage in any substantial

gainful activity (SGA) because of a medically determinable physical or mental impairment. The SGA thresholds for

2014 are earnings of $1,070 per month for non-blind persons and $1,800 per month for blind persons. This impairment

must be expected to result in the impaired person’s death, or be expected to last at least 12 consecutive months. In

addition, this impairment must prevent a person from engaging in their previous work or in any other work that exists

in the national economy. The Supreme Court held in Barnhart v. Thomas 124 S. Ct. 376 (2003) that the previous work

test does not require that an individual’s prior job exist in the national economy.

42 U.S.C. §414. For a detailed explanation of the insurance requirements, see “Disability Planner—How Many

Credits You Need,” at http://www.ssa.gov/dibplan/dqualify3.htm.

42 U.S.C. §416(l). For a table of retirement ages by year of birth, see “Social Security Benefits—Normal Retirement

Age,” at http://www.ssa.gov/OACT/ProgData/nra.html.

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Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

Retroactive Benefits

SSA provides retroactive SSDI benefits when the onset of disability occurred before an

application for benefits was filed. In such cases, a beneficiary is entitled to benefits retroactive to

five months after the date of disability onset provided that this date is within one year of the date

of application.5

Exception to the Five-Month Waiting Period

Section 223 of the act provides one exception to the five-month waiting period.6 A person who, in

the five years immediately preceding the onset of a current disability, had either received SSDI

benefits or had a disabling condition that met the requirements set forth in Section 216 of the act

(42 U.S.C. §416), is entitled to immediate benefits paid from the onset of disability.

Legislative History of the SSDI Waiting Period

A waiting period from the onset of disability to eligibility for benefits has been part of the SSDI

program from its inception. In 1954, Congress made the first provisions for loss of work due to

disability and included language that exempted a period of disability from being counted when

determining retirement benefits.7 Two years later, Congress authorized the payment of SSDI

benefits to persons over the age of 50 after a six-month waiting period.8 The age requirement was

removed in 1960. In recent years, Congress has introduced a variety of legislative initiatives to

reduce or eliminate the five-month waiting period.9

Congress’s Justification for Instituting a Waiting Period

In 1955, the House Ways and Means Committee recommended passage of the proposed Social

Security Amendments and discussed the rationale for a six-month waiting period between the

onset of disability and eligibility for federal benefits. A committee report cited the unique nature

42 U.S.C. §423.

Ibid. P.L. 86-778. This exception was part of the Social Security Amendments of 1960.

P.L. 83-761. This measure, found in the Social Security Amendments of 1954, is commonly referred to as the

“Disability Freeze,” For more information, see Edward D. Berkowitz, “Supporting Disability: An Historical

Perspective,” American Rehabilitation, vol. 25, no. 1, (1999), pp. 2-8.

P.L. 84-880, Social Security Amendments of 1956.

For example, H.R. 2263, introduced as the Disability Equity Act by Rep. Betty Sutton in the 111th Congress, sought to

eliminate the waiting periods for people with disabilities for entitlement to disability benefits and Medicare. H.R. 723

and S. 366, concurrently introduced in the 111th Congress as the Social Security and Medicare Improved Burn Injury

Treatment Access Act of 2009, attempted to eliminate the waiting periods for DI and Medicare benefits in the cases of

individuals with disabling burn injuries. H.R. 160, introduced as the Fairness for the Terminally Ill Act of 2011 by Rep.

Heath Shuler in the 112th Congress, sought to eliminate the waiting period in the DI program for those individuals

determined to be terminally ill by a physician (i.e., a life expectancy of 6 months or less). S. 1311, introduced as the

Expedited Disability Insurance Payments for Terminally Ill Individuals Act of 2013 by Sen. John Barrasso in the 113th

Congress, attempted to provide phased-in SSDI payments during the waiting period for individuals with terminal

illnesses. H.R. 160, introduced as the Disability Benefits Fairness Act of 2013 by Rep. Mike McIntyre in the 113th

Congress, sought to eliminate the five-month waiting period for an individual to be eligible for benefits based on

disability.

Congressional Research Service

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

of the federal definition of disability and called its requirement that a disabling condition be

expected to result in either death or long duration “more exacting” than the disability definitions

commonly used by commercial insurance carriers at the time, many of which had their own sixmonth waiting periods. In addition, the Ways and Means Committee expressed that the six-month

waiting period was “long enough to permit most temporary conditions to be corrected or to show

definite signs of probable recovery” and would be of sufficient length to make it “unprofitable for

a person who can work not to do so.”10

Changes to the SSDI Waiting Period

Two significant changes to the original six-month waiting period have been passed as part of the

creation of the SSDI program. The first change eliminated the waiting period for disabled

workers who were previous SSDI recipients or who had a previous disabling condition in the five

years prior to the onset of their current disability. To be exempted from the waiting period, the

previous disabling condition must have met the statutory definition of disability as provided in

Title II of the act.11

In their reports to the House and Senate on the 1960 Amendments, the Ways and Means and

Finance Committees affirmed that the six-month waiting period for those with previous

disabilities as a possible barrier to return to work efforts, stating that

Most disability insurance beneficiaries who return to work do so despite severe impairments.

Where a disabled person becomes employed without any improvement of his condition, a

more or less slight change in his situation can result in the loss of his job and make him once

again eligible for disability insurance benefits. Other disabled persons, whose medical

conditions may improve sufficiently to require termination of benefits, may subsequently

grow worse again and become reentitled to benefits. A new six-month qualifying period

during which they receive neither earnings nor benefits imposes a hardship on them and their

families, and may be a real bar to any further work attempts.12

The second change to the SSDI waiting period reduced the waiting period from six to five

months.13 The intent of this change was to reduce the financial burden on applicants, and the

Ways and Means Committee reported that “reducing the waiting period from six months to five

months would diminish the financial hardships faced by those workers who have little or no

savings or other resources to fall back on during the early months of long-term disability.”14 The

Senate Finance Committee went further than the House and recommended reducing the waiting

period to four months.15

U.S. Congress, House Committee on Ways and Means, The Social Security Amendments of 1955, report to

accompany H.R. 7225, 84th Cong., 1st sess., H.Rept. 1189 (Washington: GPO, 1995), pp. 5-6. The Senate Finance

Committee did not include a provision for disability benefits in its report.

P.L. 86-778, the Social Security Amendments of 1960.

U.S. Congress, House Committee on Ways and Means, The Social Security Amendments of 1960, report to

accompany H.R. 12580, H.Rept. 1799 (Washington: GPO, 1960), pp. 13-14, and U.S. Congress, Senate Committee on

Finance, The Social Security Amendments of 1960, report to accompany H.R. 12580, 86th Cong., 2nd sess., S.Rept. 1856

(Washington: GPO, 1960), p. 17.

P.L. 92-603. The Social Security Amendments of 1972.

U.S. Congress, House Committee on Ways and Means, The Social Security Amendments of 1971, report to

accompany H.R. 1, 92nd Cong., 1st sess., H.Rept. 92-231 (Washington: GPO, 1971), p. 56.

U.S. Congress, Senate Committee on Finance, The Social Security Amendments of 1972, report to accompany H.R. 1,

(continued...)

Congressional Research Service

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

Potential Income Supports During the Five-Month

Waiting Period

Supplemental Security Income

Title XVI of the act authorizes Supplemental Security Income (SSI) benefits for individuals who

meet the statutory test of disability or are over the age of 65 and who fall below specific income

and asset thresholds.16 SSI beneficiaries need not have any prior work history or meet the

insurance requirements of SSDI, and there is no waiting period between the onset of a disability

and eligibility for SSI benefits. In December 2012, of the 8.4 million disabled-worker

beneficiaries aged 18-64 receiving SSDI benefits, 1.1 million or 13.1% also received federally

administered SSI benefits.17 Thus, SSI can be used by some disabled workers to lessen the

economic hardship faced by the lack of earnings and benefits during the SSDI waiting period. SSI

benefits are not available to residents of Puerto Rico, Guam, or the U.S. Virgin Islands.18

The maximum federal SSI payment, referred to as the federal benefit rate, is $721 per month for

an individual living independently and $1,082 for a couple living independently in 2014. Fortyfour states and the District of Columbia add a supplement to this benefit for their residents. The

amount of the federal benefit, plus any state supplement, may be reduced or offset by some

earned and unearned income.19 Since most SSI recipients have other income, the average monthly

SSI payment is less than the federal benefit rate. In December 2013, the average federally

administered SSI payment was $546.38 for adults aged 18 to 64.20 Thirty-nine states, the District

of Columbia, and the Commonwealth of the Northern Mariana Islands grant Medicaid eligibility

to all SSI recipients or have Medicaid eligibility rules that are the same as those of the SSI

program.

Temporary Disability Insurance

California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island currently administer

Temporary Disability Insurance (TDI) programs that provide either state or private benefits to

(...continued)

92nd Cong., 2nd sess., S.Rept. 92-1230 (Washington: GPO,1972).

20 C.F.R. §416. For more information, see CRS Report 94-486, Supplemental Security Income (SSI), by (name redac

ted). See also “Understanding Supplemental Secur ity Income” at http://www.socialsecurity.gov/ssi/textunderstanding-ssi.htm.

Social Security Administration, Annual Statistical Report on the Social Security Disability Insurance Program, 2012,

Table 66, November 2013, http://www.ssa.gov/policy/docs/statcomps/di_asr/ (hereinafter cited as “SSDI Annual

Report 2012”).

Residents of these jurisdictions are eligible to receive federal benefits from their commonwealth or territorial

government under the provisions of Title XIV and Title XVI of the act. These benefits are administered by the

Department of Health and Human Services.

Certain income sources are not counted by SSA when determining a monthly SSI benefit. For more information, see

CRS Report RS20294, Supplemental Security Income (SSI): Income/Resource Limits and Accounts Exempt from

Benefit Determinations, by (name redacted).

Social Security Administration, Monthly Statistical Snapshot, December 2013, January 2014, Table 3,

http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/.

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Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

workers with disabilities who are not receiving SSDI benefits. The six TDI programs provide

temporary benefits, with maximum durations of between 26 and 52 weeks, for those with an

earnings history who are unable to work because of a disability and who are not receiving

workers’ compensation or SSDI benefits.21 In addition to state TDI, employees of the railroad

industry in all states are eligible for TDI benefits administered by the federal Railroad Retirement

Board in accordance with provisions of the Railroad Unemployment Insurance Act.22

Workers’ Compensation

Workers’ compensation systems in each state provide wage replacement and medical benefits to

workers unable to work because of an employment-related illness or injury and may be able to

pay benefits during the SSDI waiting period.23 The federal government administers workers’

compensation for its employees under the Federal Employees’ Compensation Act.24 The federal

government also administers workers’ compensation systems for some private sector employees

in the maritime, mining, and railroad industries through the Longshore and Harbor Workers

Compensation Program,25 the Black Lung Benefits Program, and the Energy Employees’

Occupational Illness Compensation Program.26

Unemployment Compensation

In each state, workers covered by state unemployment insurance (UI) systems may be eligible to

receive partial wage replacement in the event of a job separation. The states, however, require that

those receiving unemployment compensation be able and willing to work, a condition that may

exclude many waiting for SSDI eligibility (especially an individual who would earn in excess of

the substantial gainful activity), since it is assumed that the individual is unable to work.

Unemployment benefits are administered by the states within federal guidelines under Title III of

the act, and unemployment compensation provisions for individuals who are ill or disabled vary

by state.27

For more information on TDI programs, see Social Security Administration, Annual Statistical Supplement to the

Social Security Bulletin, 2013, scheduled release date: February 2014, http://www.ssa.gov/policy/docs/statcomps/

supplement/2013/tempdisability.html.

For more information on railroad disability benefits, see CRS Report RS22350, Railroad Retirement Board:

Retirement, Survivor, Disability, Unemployment, and Sickness Benefits, by (name redacted)

For more information on workers’ compensation, see Social Security Administration, Annual Statistical Supplement

to the Social Security Bulletin, 2013, scheduled release date: February 2014, http://www.ssa.gov/policy/docs/statcomps/

supplement/2013/workerscomp.html.

See CRS Report R42107, The Federal Employees’ Compensation Act (FECA): Workers’ Compensation for Federal

Employees, by (name redacted)

See CRS Report R41506, The Longshore and Harbor Workers’ Compensation Act (LHWCA): Overview of Workers’

Compensation for Certain Private-Sector Maritime Workers, by (name redacted)

For more information on state and federal workers’ compensation programs, see Charles B. Lewis, Workers’

Compensation Law and Strategy Guide (New York: Aspen Publishers, 2005).

For more information on unemployment compensation, see CRS Report RL33362, Unemployment Insurance:

Programs and Benefits, by (name redacted) a nd (name redacted) and 2012 Comparison of State Unemployment

Insurance Laws at http://workforcesecurity.doleta.gov/unemploy/comparison2012.asp.

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Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

The Government Accountability Office (GAO) found that 117,000 individuals (less than 1.0% of

all SSDI beneficiaries) received concurrent SSDI and UI cash benefits in fiscal year (FY) 2010.28

SSA’s Office of the Chief Actuary estimated that 0.4% of disabled-worker beneficiaries would be

in receipt of both SSDI and UI benefits in 2014.29

Private Disability Insurance

Private disability insurance programs offered by employers can be used to provide wage

replacement benefits during the five-month waiting period for SSDI benefits. In March 2013,

39% of private-sector workers participated in some form of short-term disability insurance plan

while 32% of private-sector workers were covered by long-term disability insurance.30 It has been

estimated that up to 20% of SSDI beneficiaries have received payments from private disability

insurance policies before being eligible for federal benefits.31

Impact of the Five-Month SSDI Waiting Period

The five-month waiting period between the onset of disability and eligibility for SSDI may have a

negative impact on the income of those seeking to enter the program. During this waiting period,

persons with disabilities are either not working or earning less than the substantial gainful activity

(SGA) threshold. In addition, claimants are either not receiving monthly benefits to replace lost

wages or are receiving only SSI benefits, which are usually lower than SSDI benefits. A July

2012 analysis by the Congressional Budget Office (CBO) estimated that the elimination of the

five-month waiting period would increase outlays to SSDI by approximately $8.0 billion dollars

in 2022 (about 4% of program outlays).32

One impact that may not be as clear, however, is the role that the waiting period plays in

discouraging possible beneficiaries from applying for benefits.33 This waiting period, and its

accompanying loss of income, lessen the overall generosity of the SSDI benefit.34

U.S. Government Accountability Office, Overlapping Disability and Unemployment Benefits Should be Evaluated

for Potential Savings, GAO-12-764, July 2012, http://www.gao.gov/assets/600/593203.pdf. GAO defined concurrent

receipt of SSDI and UI benefits as receipt of SSDI benefits in all three months of the quarter for which they received UI

benefits in FY2010.

Letter from Stephen C. Goss, Chief Actuary, to the Honorable Sam Johnson, Chairman, Subcommittee on Social

Security, January 7, 2014, http://www.socialsecurity.gov/OACT/solvency/SJohnson_20140107.pdf.

U.S. Bureau of Labor Statistics, Table 16. Insurance benefits: Access, participation, and take-up rates,1 private

industry workers, National Compensation, March 2013, http://www.bls.gov/ncs/ebs/benefits/2013/ownership/private/

table12a.htm. In March 2013, the median duration of benefit receipt on short-term disability insurance for all workers

in private industry was 26 weeks. Long-term disability (LTD) insurance benefits can last anywhere from a year to a

beneficiary’s full retirement age. Once a beneficiary is in receipt of SSDI, insurers generally offset LTD benefits by the

amount of SSDI benefits.

Todd C. Honeycutt, “Program and Benefit Paths to the Social Security Disability Insurance Program,” Journal of

Vocational Rehabilitation, vol. 21, no.2 (2004), pp. 83-94.

Congressional Budget Office, Policy Options for the Social Security Disability Insurance Program, July 2012,

http://www.cbo.gov/sites/default/files/cbofiles/attachments/43421-DisabilityInsurance_print.pdf.

Although the same analysis conducted by the CBO posited that an extension of the waiting period from five to

twelve months might deter claimants from applying for benefits, the CBO chose not to speculate as to the number of

possibly discouraged applicants.

One study estimated that eliminating the waiting period would have the same positive effect on the number of SSDI

(continued...)

Congressional Research Service

Social Security Disability Insurance (SSDI): The Five-Month Waiting Period for Benefits

Author Contact Information

(name redacted)

Analyst in Income Security

/redacted/@crs.loc.gov, 7-....

Acknowledgments

This report was originally written by Scott Szymendera and updated by (name redacted). All questions

should be directed to the current author.

(...continued)

applicants as a 10% increase in the level of benefits. For additional information, see Brent Kreider, “Social Security

Disability Insurance: Applications, Awards, and Lifetime Income Flows,” Journal of Labor Economics, vol. 17, no. 4

(1999), pp. 784-827.

Congressional Research Service

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