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Applying for government benefits and financial assistance while waiting for Social Security Disability Insurance (SSDI) could be the key to survival. You just do not know how long it will take them to make a decision, grant approval, and fund the back pay.
You face an uncertain length of time without an income. Find a way to survive without going broke during the initial review process, a possible reconsideration, and a possible appeal hearing before an administrative law judge.
You also cannot be 100% certain of the outcome. The ultimate decision could be denial, rather than approval. Working while you wait could hurt your case, so where do you turn? Explore three categories of options to support yourself financially while waiting for disability benefits.
- Handling of existing loans payments and new borrowing accounts
- Keeping health insurance in force to reduce medical expenses
- Tapping into income-based government benefit programs
Existing & New Loans While Waiting for Disability
The first set of financial assistance tips relates to loans while waiting for your Social Security Disability Insurance (SSDI) decision, hearing, and hopeful approval. We address this topic first, as borrowed money carries the greatest threat to your survival – even for people who are healthy enough to work and earn an income.
Debt relief and loan deferment for existing obligations are a more realistic option than borrowing more money for help with bills. Most lenders will shy away from approving your application for a new account.
We do not advise applying for loans while waiting for disability benefits – unless you have an approval and you are standing by for back pay.
Back Pay Approved
Request a personal loan if you are waiting for disability back pay. The funds could help you stay current on regular bills until the back paycheck(s) arrive in the mail or auto-deposit into your bank account. This option works only if you won an approval and have money coming in. Lenders need to see that you have a regular reliable inflow of funds to pay them back.
Waiting for Decision
You could dig yourself a deeper hole, and ruin your credit score for decades if you apply for a loan before knowing the final dispensation of your case. In addition, it is very unlikely that a lender will approve your application. The most important qualifier (after your credit score) is projected income. Both may be in disrepair.
Unsecured debt consolidation loans could lower your monthly payments for existing obligations. However, they will be difficult to obtain – even though you are not borrowing additional money.
Emergency loans could provide a cushion of cash to help you weather the storm. However, they have serious drawbacks. The fees on payday loans add up very quickly each time they renew – which could happen many times before your decision is final. Vehicle title loans require that you own your automobile free and clear. If you fall behind on payments, you could lose your car.
Loan Deferment & Forbearance
Existing loan deferment or forbearance is a possible option for financial help while waiting for disability allowance. Both options allow you to suspend making payments temporarily or reduce the size of payments if you are experiencing economic hardship. The process works slightly differently for student loans versus mortgages.
- Student loan deferment is the best option, as the federal government will pay the interest on your subsidized loans.
- Student loan forbearance is available if you do not qualify for a deferment. Interest will continue to accumulate.
- Mortgage deferment and forbearance is the same thing. The mortgage company may agree to lower your monthly mortgage payments for a set period.
Health Insurance While Waiting for Disability Approval
Health insurance provides critical financial assistance while waiting for a Social Security Disability Insurance (SSDI) decision, hearing, and hopeful approval. You probably need ongoing health care if you are unable to work because of a crippling illness or injury. Medical bills will pile up quickly if you do not have adequate coverage.
You may need emergency assistance paying the health insurance premiums. Dealing with a disabling medical condition while uninsured is not a good idea. Look at four options for help.
Buy an individual health insurance plan if you lost your employer-based coverage while waiting for disability benefits. Loss of coverage is a qualifying life event. This means that you can purchase a new Obamacare policy outside of open enrollment. The new plan must cover any pre-existing medical condition with no waiting period.
The federal government provides income-based premium and cost-sharing subsidies, which helps you afford needed medical care. Since you are not able to work, these subsidies may apply to you. Households with income between 100% and 400% of the federal poverty level qualify.
Apply for Medicaid while waiting for a disability allowance if your projected household income is now below 100% of the federal poverty level, and you live in an expansion state. You can apply for Medicaid any time of year, without concern for open enrollment rules.
States that did not expand Medicaid eligibility under the Affordable Care Act left a coverage gap. For example, a state with an income limit of 50% of the federal poverty leave excludes coverage for households earning between 51% and 99%. Check with your county office.
Medicare has a 24-month waiting period after disability approval. Medicare is not an option for health insurance coverage unless you turn age 65 while you are waiting for a final decision.
Family Medical Leave Act
The Family Medical Leave Act (FMLA) may require your employer to continue paying your health insurance premiums for twelve weeks while you wait for disability benefits. FMLA requires covered employers to continue health insurance on the same basis as when eligible employees were working.
Covered employers have more than 50 employees working in a 75-mile radius, among other criteria. Eligible employees have worked more than 1,250 hours in the previous twelve months.
Government Benefits While Waiting for Disability
Do not be shy about applying for every conceivable government benefit program for financial assistance while waiting for a Social Security Disability Insurance (SSDI) decision (approval or denial), or an appeal hearing. You need to stretch your existing resources for as long as possible.
Depending on the state, you may now qualify to draw unemployment, temporary disability, food stamps, or welfare.
Drawing unemployment benefits while waiting for disability allowance is rarely feasible. Three common criteria eliminate most applicants.
- Physically able to work
- Available to work
- Actively seeking a new job
SSDI covers permanent and total disabilities only. Therefore, unemployment compensation is not a fit for the affected individual.
However, the rules work differently if your spouse needs to stop working to care for you at home. Caregivers are physically able to work, and can sometimes return to the labor force.
Twenty-two states pay unemployment compensation when an employee quits work to care for a sick or injured family member. The caregiver may be eligible once he or she is available to work outside of the home.
State-mandated temporary disability programs provide financial help by replacing a portion of your work income while you wait for SSDI benefits. However, only six states have such a program. The remaining forty-four states leave the enrollment decision up to individual employees.
Private short-term disability programs may also make claims payments while you wait for SSDI. File a claims paperwork with the carrier who issued the private policy. If you do not already have a policy in place, it is too late to sign up. Private policies will not cover pre-existing health conditions.
Food Stamps (SNAP)
You might be able to get food stamps (SNAP) while waiting for SSDI allowance. The Supplement Nutrition Assistance Program provides financial help for low-income families to buy meals. You must meet two sets of qualifying criteria.
- Household income tests – if you are the only provider in the household, you will probably meet the income criteria. You may not qualify for food stamps if another household member continues working and pushes earnings above the limits.
- Household resource limits – If your household has more than $3,250 in countable resources, you do not qualify for food stamps, even if you have no income. You could qualify after spending down assets.
Welfare – TANF
Likewise, you may be able to collect Welfare (TANF) while waiting for disability benefits if you meet both the income and countable resource criteria. Temporary Assistance for Needy Families (TANF or Welfare) helps needy families with children to achieve self-sufficiency.
One of the program objectives is to “promote job preparation, work, and marriage.” SSDI provides benefits for former employees who are unable to work because of an illness or injury. Therefore, you begin with a conflict.
Each state administers this welfare program following basic guidelines. Apply for this program in your state – if you have children and feel comfortable telling a different story about your ability and willingness to work.
Interim Public Assistance
Interim public assistance is available to people while waiting for Supplemental Security Income (SSI). SSI is a separate program designed for people who have not accumulated enough work credits to qualify for SSDI. Since SSDI typically pays a higher monthly benefit amount, you should look to the other survival tips in the interim.