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Using Your Disability Benefits: What You Can and Cannot Buy

Disability benefits can be tricky to work with sometimes. While you can receive financial aid from your SSI and healthcare plan, you may not be eligible for other benefits that could’ve sustained your living better. If you have no family members to support you, you may be left with no stable means to meet your needs.

If your disability has rendered you unfit to work, and your employer offers disability benefits, you can claim your benefits even if your condition isn’t work-related. And depending on your state, your employer may also be required to participate in state and federally mandated disability programs.

The trick lies in the things you can buy with your disability benefits. If you purchased a property or item that isn’t covered by the policy, you may lose your eligibility and face other issues. To avoid confusion and potential loss of benefits, consult an experienced elder law attorney. They specialize in unique cases like disability, aging, and special needs.

Learn more about disability benefits and what you can do with them.

Short-term Disability

Short-term disability insurance is a private policy that the employer can buy for their employees. It provides you with income if you’ve been disabled due to an illness or accident, and are unfit to work for one to seven days, which is the initial waiting period. The actual period of a short-term disability is up to 26 weeks.

The waiting period is just the time it takes before your disability benefits are paid. During that period, you can use any of your leaves. If you started receiving your benefits, but your disability exceeded the short-term period, your employer should change your plan into long-term disability, if they offer it.

injured man

Long-term Disability

Long-term disability benefits are offered to employees whose condition makes them unfit to work for more than six months. The policy typically supplies 50% to 60% of pay to disabled employees. It can continue on until their retirement, or for a specified period, depending on the employee’s age at the time of their disability.

The catch to both disability benefits is that you have to be a regular, full-time employee of a company for at least a year for you to be eligible. In addition, some disability plans require the involvement of the Social Security Administration (SSA), who will determine or affirm whether you are truly disabled. If they end up deciding that your condition doesn’t pass as a disability, then you won’t be eligible for the benefits. What makes it even more stressful is that the SSA can take up to six months to decide. Hence, that’s six months of financial struggle.

Things You Can Do With Your Benefits

Working with a lawyer can help speed up the SSA processes, allowing you to claim your benefits as soon as you need them. Now that you’ve got the cash, what can you do?

  • Buy Clothing, Household Goods, Personal Items, and Automobiles

Your clothes shouldn’t affect your eligibility for disability benefits from the SSA. Hence, you can also shop for new clothing using your benefits. As for household goods and personal items, there are no restrictions either, so you can own as much of them as you need. An automobile, however, may hurt your eligibility if you use it for your own transportation, or for that of another member of your household.

  • Buy Groceries and Pay Rent

The groceries you buy aren’t subject to SSA’s conditions. Food from a restaurant, however, may be subject to exclusions. With regard to rent, a number of factors are considered. Some household-related expenses may not fall into SSA’s definition of “shelter”. These include cleaning services, homemaker services, HVAC systems, and telephone bills.

  • Buy a Home

The SSA doesn’t prohibit an individual from buying a home using their disability benefits. But if you’re receiving Social Security Income (SSI), you should be careful. SSI is designed for low-income earners, so your assets shouldn’t exceed $2,000 (or $3,000 if you’re married) for you to remain eligible.

But since SSI isn’t much, it can’t make you afford a new home anyway, unless you have another source of income allowed by the SSI. If you’re a beneficiary of Social Security disability insurance (SSDI), however, you can have more financial freedom, since it’s higher than SSI. It also has no asset limits, allowing you to buy a home without putting your eligibility at risk.

If you made some investments before you became disabled, they’ll allow you to achieve stronger financial security when you can no longer work. It can make you qualified for SSDI benefits instead of an SSI, too. If one of your investments yielded generous returns, you can use the money to start a small business. Your disability may have ended your career, but it doesn’t make you completely unable to make more money.

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