Social Security Disability & 401(k)'s

[Guest JEP]

I have a client whose Dr. is claiming he is disabled. When he went to SSA, they asked him if he had a 401(k) plan. When he answered yes, they told him that he was ineligible for SSA disability b/c he had more than $3,000 in his plan.

I know this isn't the best forum for this discussion, but I have looked all over for the determinative reasons for disability, and nowhere can I find anything pointing to a 401(k) plan having any affect on it. Any help would be much appreciated.

Thanks!

[Guest karhu]

Have you checked the Social Security Web site yet? www.ssa.gov

I could be wrong but I thought what you own came into play with the Supplemental Security Income program not with Social Security Disabailty Benefits.

[Guest JEP]

I had checked the website prior to the post. However, I found an independant site that stated exactly what you just said. For the supplemental security income, what you own does come into play in determining whether or not you are eligible for this.

Thanks for your help.

[MGB]

When you apply for disability, you are typically applying for the benefits under OASDI (e.g., "Social Security"). However, if you are not eligible for OASDI, you are checked for eligibility for SSI (note that SSI is still a part of "Social Security").

It appears this person is not eligible for OASDI, so they looked at his eligibility for SSI, which is dependent on having no assets or income.

The person would not be eligible for OASDI if they only had earnings for a few years (or only a few years in the past few years), or they did have earnings, but it was government employment where they were not covered by OASDI. They need to be both "fully insured" and "disability insured" to be eligible. For disability insured, tThey need 20 quarters of credit in the past 40 quarter period (i.e., 5 out of the last 10 years). However, that requirement is much less if they are under age 31. All of the rules of being fully and disability insured are on the SSA website. http://www.ssa.gov/dibplan/dqualify3.htm

As an example, if I went on disability, I would not be eligible under OASDI, even though I have been working for over 30 years (I am fully insured). That is because I was a government employee during the 90's (Iwon't be disability insured again for a couple more years).