The Insurance Buying Guide: Workers' Comp and Social Security
Workers' compensation provides another source of disability income benefits -- but only if your accident or sickness is job-related. Falling out of bed in the morning and breaking your arm does not constitute a workers' comp claim. Slipping on a wet floor at the job site and breaking your arm also is a workers' comp claim.
The intent of the workers' comp system is to make the employer liable for occupational disabilities without you having to prove that the company was at fault. Your employer either will cover such claims out of company funds or elect (as almost all do) to cover this risk by means of workers' comp insurance.
The laws -- and the benefits provided -- vary somewhat from state to state. But benefits are usually low -- about $300 a week at most.
You also might think you can count on Social Security disability income benefits. But it's not easy to get Social Security benefits -- and they're pretty puny when they do come. To be eligible for disability benefits under Social Security, you have to be both "fully insured" and disability insured. Fully insured status means that you have paid Social Security taxes for 40 calendar quarters (10 years). Disability insured means that you have paid Social Security taxes in at least 20 out of 40 calendar quarters (5 out of 10 years) prior to filing a disability claim.
In addition, you must be under age 65, the disability must be expected to last for at least 12 months or end in death, and the disability must satisfy the definition of total disability in accordance with the Social Security law.
Total disability is defined as the inability to engage in any substantial gainful activity by reason of a medically determined physical or mental disability relative to a person's education and prior work experience.
This means that you must be unable to perform your previous job -- or any other substantial work that exists in the national economy relative to your age, education and prior work experience.
In addition, there is a five-month waiting period before any benefits can be paid. In reality, due to the waiting period and the time it takes to process an initial claim, you probably won't receive your first Social Security claim check until about a year after the onset of the disability -- if you're one of the very few who qualifies to collect benefits in the first place.
