The Advantages of Disability Retirement in California

Experiencing any type of injury or disability can be devastating, and one that permanently prevents you from working can put your financial future at risk. But depending on your injury, California has both state and federal regulations that can help you receive a certain disability retirement amount, allowing you to meet your financial expenses without having to worry about your inability to work.

Defined

When you experience a physical disability that affects your ability to work, you may qualify for some type of monthly disability payment. This income depends on the insurance plans your California employer implements for company employees. While state and federal law mandates that all employers carry California state unemployment Insurance and federal Social Security Disability Insurance (SSDI,) some employers have additional voluntary or elective coverage. If you qualify for one of these additional private insurance disability coverage claims, it won’t affect any additional California state or SSDI coverage you qualify for.

State Disability

California is one of the few states requiring all employers to pay state temporary disability insurance. If you become disabled while working in California, you can apply for this benefit, until your Social Security Disability Insurance (SSDI) claim is approved or denied. This programs offers up to 55 percent of your prior earnings for a temporary disability. California requires you to be employed within the state at the time of the disability, that the disability period be longer than eight days, and during the disability payable period, you be under the care of a licensed physician. The only disadvantage to this disability program is that there is only a 52-week limit for those who qualify.

Social Security Disability

Social Security Disability Insurance (SSDI) is a federal insurance program and the Federal Insurance Contributions Act (FICA) taxes you paid during your working life are intended to cover a situation where you may become permanently disabled. However, to qualify, you must apply for benefits with the California Social Security office. Qualification is based on the degree of impairment determined by the doctor who treats you, and the rating given you by a California claims administrator. Because there are several factors in determining this rating, the application process takes a minimum of five months, but is often a much longer process. The advantage in applying for SSDI in California is that this disability income is not taxable by the state, although federal income taxes may still apply in certain situations.

Retirement

Disability benefits do not affect any California retirement benefits you are eligible for. Your Social Security retirement benefit amount is the same as your full retirement pay amount. When you reach age 62, any Social Security disability payments you receive convert to retirement benefits. An additional advantage in receiving your disability retirement in California applies when this conversion happens, as this retirement income does not require a state income tax payment.