Disability Insurance Benefits (DIB)
Disability Insurance Benefits fall under Title II of the Social Security Act. To be covered, you must have paid FICA (Social Security) taxes for enough years to be both fully insured and currently insured. This is based on the gross income you report on your federal tax returns. In 2007 for example, you receive 1 quarter of coverage for every $1000 of gross income you report up to the maximum of 4 quarters for the year. Thus, if you report at least $4000 of earned income in 2007, you will receive 4 quarters of coverage. To be fully insured, you must have one quarter of coverage for every year after the year in which you turned age 21. If you are short quarters of coverage and all your earned income was not reported, Social Security will accept amendments to tax returns filed up to 3 years, 3 months, and 15 days after the “year” in which wages were paid. Thus, as of April 15, 2007, you can only obtain additional quarters of coverage for tax years 2003, 2004, 2005, and 2006.
While most working people who file taxes satisfy the requirements for being fully insured, to be covered for Disability Insurance Benefits you also must be currently insured. Most people are unaware that their disability insurance coverage expires, just like private insurance when you stop paying the premium. Disability insurance coverage will typically end 5 years after you stop obtaining quarters of coverage. The rule is that you need 20 quarters of coverage in the last 10 years to be currently insured. If your insurance has expired, you must prove that your disability began while you were still covered.