Beginning a life on Social Security Disability Income
Beginning a life on Social Security Disability Income (SSDI) is another big chapter in your ongoing saga of living with multiple sclerosis. In my essay titled Bored Silly: Thoughts on Coping with Disability Retirement, I examined the razing and rebuilding of our individual identities, priorities, and sense of personal value in a world designed for the able-bodied majority. In this piece, I’d like to describe the real life financial consequences of existing on a much lower income than we did as full-time employees.
Like conventional Social Security, SSDI was not originally intended to be a person’s sole source of income. The formula used to calculate SSDI takes into account your entire work history and your highest income years. If you worked for at least thirty years and were one of the multitudes of low wage-earners like I was, your monthly check is barely going to gross $1100-1200. If you elect Medicare Part B and D after 24 months, the monthly premiums will be taken off the top each month, bringing your spendable income down to $1000 or less depending on the plans you elect. Compare this to a job that pays a minimum wage of $15 per hour, which will be a reality in the near future. That’s a gross monthly income of $2400. A single person living alone is hard-pressed to pay rent, overhead, maintain a car and other living expenses on the net portion of that income with nothing left over for savings. To break even, we on SSDI would need to more than double our income.
So how do people live on SSDI? Each case is different; some of us qualify for Medicaid as well. Depending on your circumstances and your state regulations, you can qualify for as little as a meager monthly food stamp allotment if you are single or as much as Medicare premium coverage and cash assistance among other benefits if you have children or other dependents.
If you don’t qualify for assistance, there is a very popular option that the majority of us use to stay afloat: CREDIT CARD DEBT. Realistically it just can’t be avoided. In my own case, I lived without credit entirely for four years after a 2005 bankruptcy. But things changed in 2009 when I retired on SSDI. I needed expensive dental work and had no insurance or cash. So I acquired a Care Credit card that is used only for dental, vet, cosmetic and optical services. Dental work is very expensive and my debt instantly jumped into the thousands where it had been zero for years. The interest rate is 26.99%. I’m in so much dental debt that Care Credit has a lien on my crowns. I’ll probably go to the grave still owing them. They can have the crowns back then.
VISA and MASTERCARD are necessities as well. I had only one and didn’t use it for years. But last month my 14-year-old car broke down to the tune of $1800. The card is now maxed out. I recently applied for a consolidation loan.
We do have options for earning additional income, but we have to be careful. We on SSDI can earn up to about $1000 per month on top of our SSDI income. But according to the 2014 Federal Poverty Guidelines, a single person household making more than $11,670 is making above the poverty level. (see: http://aspe.hhs.gov/poverty/14poverty.cfm)
It seems oddly out of step with recent reporting that one out of three renters are paying too much for rent (higher than 30%), and one out of four are paying 50% or more of their income on rent alone. (See: http://money.cnn.com/2014/05/01/real_estate/rent-spending/)
An obvious alternative for the disabled would be to live in senior government subsidized housing. Rent is supposed to be no more than 30% of your income. But that 30% rule is a convoluted thing. I live in such a place and my rent is more than 30% of my income.
So how do I live? Like a lot of others. I cut back on food and other necessities. I drive my car so little that a tank of gas lasts a full month. Cable TV and internet are my entertainment. I wear the same clothes for years until they fall apart. And I use credit. When it gets out of hand with high interest rates, I will pay it off with a consolidation loan at much lower interest. But if the situation worsens, filing bankruptcy is always an option.
Of course, there’s so much more to the financial impact of SSDI-induced poverty. Many of you have stories, much of which would include the burden of medical co-insurance and co-pays that can’t be met. And many more have foregone carrying medical insurance at all.
What’s your story? Do you have an extra income source or are you struggling by on SSDI alone? Have you gone without medical insurance? What do you do to shrink your expenses and get by?
Does anyone else in your family have MS?