Eligibility for DIB results from being “insured.” You become insured by working and by paying Social Security, either as a payroll deduction by your employer (FICA) or as self-employment tax. If you work for cash and do not report your income to the IRS, you will not be insured for purposes of DIB. Each payment to Social Security is, in part, a payment for insurance in the event that you become disabled.
Merely making a few payments to Social Security from your paycheck is not enough to make you insured for purposes of DIB. The rules for determining whether you are insured are quite complex, and we will not attempt to describe the details of those rules here. However, it generally takes several years of working before a person becomes insured for purposes of receiving DIB. Furthermore, a person who is fully insured can lose that insured status if the person stops working for a long period of time or works sporadically.
In order to be eligible for DIB, a claimant must be “insured” prior to the date the person became disabled. The Social Security Administration uses the term “date last insured,” or “DLI,” to describe the date on which the claimant’s insured status stopped. The Social Security Administration determines the date last insured, based on your payroll records and tax records, and if you are found to be disabled after the date last insured, you are not eligible for DIB. Cases in which the date last insured has expired can be very difficult, since the claimant must prove his/her condition in the remote past.
Although DIB requires that a claimant be insured, DIB payments are generally greater in amount that SSI, and a person can receive DIB payments regardless of his/her financial status. If a person is insured and becomes disabled, that person is eligible for DIB payments.