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How To Adjust Your Finances After Dealing With A Disability

In many ways, people with disabilities are already beating the odds in just about going about their daily lives, but what you may not realize is that they are also dealing with financial struggles on top of the other issues. One study in 2004 showed that on average, people with disabilities face higher expenses in just about any way that you can imagine, ranging from obvious things like medical care to more surprising things like food costs and utility bills. Compounding the issue is the fact that people with disabilities also have to deal with reduced potential earning, due to having to miss time for medical treatments as well as the possibility of not being able to work certain jobs—or work at all. There’s no easy way to circumvent this problem, but it is possible to work through things.

In some cases, people with permanent disabilities that they are either born with or have incurred due to some sort of accident or medical problem may be able to get some added financial support to compensate for some of the reasons that we just mentioned.

The first step is figuring out of you are entitled to any compensation, and if so, what type you can get. According to the legal experts at Rober Wilson & Associates, “Two listings dictate the types of conditions considered to be disabling. The Social Security Administration (SSA) publishes a listing of impairments, both physical and mental, that automatically entitle individuals to Social Security disability benefits (SSDI), while the SSA’s Compassionate Allowances program identifies claims where the applicant’s disease or condition clearly meets Social Security’s statutory standard for disability.”

While we’re not going to put the list in its entirety here, here’s a basic rundown of what you need to get SSDI benefits.

  • Have worked for jobs that were covered for social security in the past prior to becoming disabled.
  • Meet the federal government’s definition of disabled. This generally means that you can no longer work in your former job, and will have difficulty getting another job due to your medical conditions.
  • The condition will last either above a year or eventually result in death.

In addition to this, there may also be disability insurance that you already have. Some people that have jobs with an inherent element of risk may be encouraged to invest in disability insurance,  to provide compensation in case they can no longer work. In some cases, like for federal employees, this is a natural part of their job package, a part of their overall FERS plan. As a note though, make sure that you have a full understanding of what you need to do to qualify for benefits. Using FERS as an example, you need to have at least 18 months of Federal service, have applied to benefits before separation of service or at before a year afterward, and expect to be spending a year with your disability. Different plans have different fine print, so understand what you are paying in to protect you.

At this point, it’s time to stop talking about your potential to earn and potential to manage your money. People on disabilities who are getting paid through disability insurance or SSDI are inherently on fixed incomes, which means they are more reliant on a budget than anyone else due to not having the potential to earn more as well as potentially having more expenses to work with. When you are putting your budget together, make sure that you spend an adequate amount of time trying to tier things that you need versus what you want in order to prioritize where your budget is going to go.

In addition, there are some opportunities to get added financial help. For example, a lot of people with disabilities struggle financially because so much of their money gets sucked up into medical expenses, making it difficult to save. Compounding this is the fact that a lot of programs out there that provide aid also have asset caps, meaning that even those with decent financial situations may be penalized. However, the government recently set up a program called Achieving a Better Life Experience (ABLE) accounts. This is a savings account that does not count against those asset limits, allowing people with disabilities to have long-term goals as well.

Disabilities can be difficult enough to navigate in the day-to-day, not to even bring the long-term into the conversation. The best thing you can do after going through this revelation is to lean on loved ones temporarily until you understand what your options and compensation are. This gives you the chance to work towards financial independence.

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