SLEDGE: Receiving disability, retirement at same time

Q: Ned, I haven’t been able to work because of my health since February 2008. This past July I finally went ahead and applied for Social Security disability. The next month, August, I turned 62. A man at the “800” number recently told me I could apply for retirement benefits while my disability claim is still pending. He said I wouldn’t get paid retirement benefits back to August; but that if I’m later approved for disability, I might get back pay for that to 2008. Is this correct? Charlotte

A: Charlotte, it’s all correct.  We often receive retirement applications from folks who have answered Yes to the question on the application about being disabled. And we often get disability claims from folks who’ve already reached age 62. In both cases, we explain the advantage of applying for both benefits at the same time. Since they’re already old enough for retirement benefits, we can start those benefits without having to wait for a medical determination.

True, it does entail a reduced benefit payment, since they’re electing to have retirement entitlement begin before they’ve reached their full retirement age (currently age 66 for most folks). But since they’re not working due to their health, they often can’t afford the luxury of deferring entitlement for several years in order to receive the full amount. With no job and often with pressing medical bills, they need the money now.

When you begin receiving retirement benefits prior to your full retirement age, we can’t make retroactive payments, so entitlement usually can’t begin prior to the month of filing. But we can continue to work on the disability claim after the retirement benefits have begun. And if that claim results in a favorable decision, the higher disability benefit — which is usually equal to the amount you’d get if you were full retirement age — will take the place of the reduced retirement benefit.

What’s more, unlike the retirement entitlement, disability benefits can be retroactive as much as 12 months prior to the application filing date. In calculating the back pay we owe you in the event of a disability allowance, we’d take into account that we had already paid you a few months of reduced retirement benefits. For those months, the back pay amount would be the difference between the reduced retirement benefit you’d received and the full amount you were due for the disability payment. For all the other months, the retroactive payment due you would be the full month’s benefit.