What you need to do when eligibility for disability and retirement benefits overlap

Social security provides a disability benefit to people who can’t work due to a confirmed medical condition. This medical condition must last for a minimum of one year or lead to death. When there is high unemployment, there is an increase in applications for disability benefits. Most applications for disability benefits are often denied because the process is long and exhausting.

On the other hand, social security retirement benefits are available automatically at age 62 for employees who have worked for at least ten years. Some people claim their social security before the full retirement age (FRA), which causes a permanent reduction to their monthly benefits.

When recipients of disability benefits are 62 years old, they are eligible for retirement benefits. They have the choice to select the benefit they want to receive. Most beneficiaries often choose to receive disability benefits because, unlike the retirement benefits, it is not reduced based on age by the social security administration. At FRA, the monthly benefits remain the same, but the social security disability benefits automatically change to retirement benefits.


According to the Inspector General of the social security administration, beneficiaries of disability benefits can change to reduced retirement benefits when they are 62, and this will give them more payment over time. Reduced retirement benefits may be higher for disability beneficiaries who receive public disability payments, workers compensation, or have relatives receiving benefits on their earnings record.


The OIG report noted that when disability beneficiaries choose to receive reduced retirement benefits, the reduction is for non-disabled beneficiaries and, therefore, not permanent. Also, for beneficiaries who choose to receive reduced retirement benefits, section 202(q)(7)(F) requires the social security administration to pay increased benefits to the beneficiaries at FRA.

Congress added this provision as part of the social security amendment in 1965 because disability beneficiaries’ spouses don’t have access to Medicare coverage at the time. The provision enables disability beneficiaries to change to reduced retirement benefits so that their spouse can claim Medicare coverage without any adverse effect on the beneficiaries when they reach the full retirement age (FRA).


Your spouse’s eligibility for Medicare coverage is no longer dependent on whether you are receiving retirement or disability benefits. The OIG report calls for eliminating the above provision because it favors disability beneficiaries over non-disability beneficiaries. This is because the provision gives a financial advantage to specific disability beneficiaries, affecting the SSA Trust Fund.


However, the social security administration doesn’t agree with the OIG report. The SSA relies on Congress’s view on whether there is a need for legislative change.


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