How Do I Qualify MEDICALLY for Social Security Disability or SSI?



Social Security uses a Five Step Process:

Step 1: Are You Working Now?

Are you engaged in "SGA" - substantial gainful activity - meaning you are earning $1040.00 per month gross?

If YES, you generally don't qualify. See our discussion of unemployment

If NO, go to Step 2.

Step 2: Do you have a Severe Medically Determinable Impairment("MDI")?

"Severe" means that your condition must interfere with basic work-related activities.

"Medically Determinable Impairment" means your condition must be established by objective medical evidence, usually medical records from doctors, or the result of consultative examinations. (Though testimony from nonmedical sources - yourself, friends, family, teachers, employers - may help establish the severity of the impairment.)

Step 3: Do you meet or equal a "listing?"

Certain disabilities that meet the criteria of the SSA's List of Disabling Conditions will qualify for disability without going further. These are pretty severe conditions and may be hard to establish.

Step 4: Are you able to do your Past Relevant Work ("PRW")?

First, we determine your Residual Functional Capacity ("RFC") which is a detailed listing of what you can do in spite of your physical and mental limitations.

- Physically we will try to determine how much you can exert yourself for various work-related activities (such as sitting, standing, walking, lifting, carrying, pushing, pulling); do manipulative and postural activities (such as reaching, handling large objects, using your fingers, feeling, stooping, balancing, climbing stairs or ladders, kneeling, crouching, crawling); Tolerate certain environmental conditions (such as temperature extremes, wetness, humidity, noise, hazardous working conditions like moving machinery or heights, dust, fumes, odors, gases, poor ventilation, vibrations); see, hear, and speak.

- Mentally we will determine if you can maintain concentration and attention at work; understand, remember and carry out instructions; respond appropriately to supervisors, co-workers, and usual work situations, and cope with changes in the work setting.

Second, we look at the work you have done in the last 15 years, that involved significant mental and physical activities done for pay or profit; this is your Past Relevant Work or "PRW."

Third, we decide if you can still do Past Relevant Work given your Residual Functional Capacity.

If YES, you are not disabled.

If NO, go on to step 5.

Step 5: Can you do any other type of work?

We will look at your age, experience, education, and training as well as your RFC, and decide if there are any jobs in the national economy that you could perform. You may, for example, have a skill that could be transferred to a new type of job. Even if those jobs are hard to find or pay poorly, if you can do the work you're not disabled.

You will be classified by exertion level: can you do medium, light or sedentary work? Can you do any work at all? Will your conditions preclude employment due to absences or excessive accommodation requirements? Once we determine there are no jobs, you are disabled.

Depending on your age, education, and RFC there is a series of tables (called "Grids") that will help decide what level of job retraining might apply.


Do you qualify for SSD or SSI?


There are two programs available to most disabled people. SSD means Social Security Disability Insurance. SSI means Supplemental Security Income.


SSD: have you worked enough quarters?


Everybody who earns money by working pays Social Security contributions. The basic rule is that, after you quit working, you remain eligible for disability benefits based on those earnings, for about 5 years. Another way to look at it is, you have to have earned enough that roughly 5 out of the last 10 years prior to application, your earnings were enough to be Substantial Gainful Activity. That amount is currently $1040 per month: it has been going up all the time with inflation, so in the past, it was less. The Social Security people compute this by quarters.

How can you find out if you earned enough? Go to www.ssa.gov/myaccount/and you will be able to find out what your disability benefit would be.


SSI: what are your resources?


If you don't qualify for SSD, or won't make enough from your SSD to get up to the benefit level from SSI (right now around $700.00 per month) and you are disabled, you may qualify for SSI. However, this program is needs-based. That means your "resources" have to be limited. You may not, for example, have more than $2000.00 cash on hand or in the bank ($3000.00 for couples). You are allowed to have a house and a car and some other assets. There is a site at www.socialsecurity.gov/ssi/text-resources-ussi.htm that explains in more detail.

Resources that count against eligibility include things you own such as:

- cash

- bank accounts, stocks, U.S. savings bonds

- land

- life insurance

- personal property

- vehicles

- anything else you own which could be changed to cash and used for food or shelter

- "deemed resources" which are a portion of the resources of a spouse, parent, parent's spouse, or other.

Resources that do not count include:

- the home you live in and the land it is on

- household goods and personal effects (e.g., your wedding and engagement rings)

- burial spaces for you or your immediate family

- burial funds for you and your spouse, each valued at $1,500 or less

- life insurance policies with a combined face value of $1,500 or less

- one vehicle, regardless of value, if it is used for transportation for you or a member of your household

- retroactive SSI or Social Security benefits for up to nine months after you receive them

- grants, scholarships, fellowships, or gifts set aside to pay educational expenses for 9 months after receipt.

There is more: if you have a question go to the website, or give us a call.


How do Contingency Fees Work?


Most cases are contingency fees. That means we take a percentage of what we actually recover for you. If we don't recover any money we don't get a fee.

Contingency fees are a risk-sharing device. We take the risk that we will do a lot more work to settle your case than the fee will justify; you take the risk that the case will settle easily. In fact, sometimes you do well and sometimes not. We may put a lot of work into cases that for some reason don't turn out great. Sometimes we make what seems like a windfall. But you have to remember: if you could not get a contingent fee, then you would if you couldn't afford that, you couldn't get a lawyer.

Our fees are a percentage of the amount of the settlement. That isn't as simple as it sounds, however.

First, there is the issue of how far along we are with the case. The first phase of the case is where we gather information and try to settle the case. We charge 33 1/3% at that phase. The second phase is where we file suit, do discovery and prepare for arbitration or trial. We charge 36% at that point. If we actually start a trial, we charge 40%. Appeals may be more and we negotiate that fee when it comes up.

The other issue is what the settlement is. Typically we will have someone come to the office who got some medical bills paid by insurance and maybe got a small settlement offer. We are charging our percentage on the gross amount of the settlement, which includes the amount of the earlier payments that have to be repaid (in part). We can argue about whether this is fair or not: but that is what we charge and you are agreeing to it by signing the fee agreement.

Fees are never written in stone. For really good reasons we may be willing to change our fee agreement up front. And if it becomes unreasonable for us to charge a fee (a term that is defined in law and governed by ethical rules) then we may have to reduce our fees. We hope we can talk about these issues without them becoming contentious.


Are settlements taxable?


We don't give tax advice, but here is the information we have been able to find. If you need a more certain answer, we can refer you to a tax lawyer.

Generally, personal injury proceeds are considered compensation of injuries and losses, not a "gain" or "windfall" under the tax codes, so it is not taxable. If personal injury damage awards are to compensate for personal physical injuries or sickness, then it's not taxable. An emotional injury that is the result of physical injury may not be taxable but an emotional injury that is the result of nonphysical injury is taxable. Lost wages that are the result of physical injury may not be taxable.


Insurance payments for Medical Bills


If somebody else pays your medical bills, and later you recover money for those same bills from the responsible driver's insurance, you have to pay it back; you don't get to recover twice for the same item of damage. This is called "subrogation."

On the other hand, usually, the repayment is reduced by the same percentage of fees and costs as you pay on the overall settlement. We can argue which bills are related to the accident and which are not. Sometimes we get repayment waived entirely.

Like everything else, there are exceptions and complications depending on who paid the bills.




Congress has passed new laws: we must get your Social Security Number, we must tell SSA if you get a settlement and we must give them a chance to tell us how much money they claim to be due. We cannot by law give that money to you. If we disagree with Medicare we have to hold the money in trust while we go through their appeal process.

However be aware that Medicare has taken the legal position that they can claim reimbursement for medical bills that are only vaguely related to an accident, or even are unrelated if the bill is incurred around the time of the accident, and the Courts have upheld that position. Medicare is not obnoxious about its rights, but it is incredibly bureaucratic and slow (months are not uncommon).


Medicaid / DSHS


Medicaid or DSHS is easier to work with (less bureaucracy) and is required to limit its reimbursement to items that were caused by an accident. We generally negotiate about that since it is often the central issue in most cases, anyway.


Private Health Insurance


This can be a minefield. If Health Insurance is provided as an employee benefit, some insurance companies take advantage of the ERISA law and assert that they are entitled to 100% reimbursement regardless of the effect on the insured person.

On the other hand, private insurers have provisions in their contracts requiring reimbursement but are subject to law that says you don't have to reimburse them unless you are 'fully compensated,' which is a pretty debatable concept. Sometimes private insurers get nothing back, but our policy is to negotiate a reasonable reimbursement whenever possible.




You may have Personal Injury Protection (PIP or Med Pay) coverage (you should get it if you don't) or the other party may have it. The rules are a little different. If you have PIP insurance (called 'First Party PIP') then you will have to repay those benefits, fewer fees and costs, from any third party settlement. However, PIP (being your own insurance) is usually more liberal in paying for treatment that may not pass muster with a 'third party' insurer as being reasonable and necessary or related to the accident. Sometimes we have been successful in getting PIP carriers to waive subrogation on that basis.

There is also the 'shared fault' issue. In any accident, there may be a 'comparative fault,' meaning that each party bears some part of the blame. So, for instance, it might be 80/20 or 70/30. If the other side is only 70% at fault, they only pay 70% of your damages. PIP insurance, however, is no fault: you get it even if you are 100% at fault. In discussing reimbursement, however, we sometimes argue that because a settlement was reached for shared fault, the PIP carrier is not entitled to be reimbursed for your percentage of the fault. For example, you get $5000 in PIP payments. We settle on the basis that you were 40% at fault. We then argue to the PIP carrier that 40% of the PIP payments were not recovered from the 3rd party, there was no double recovery, and you should only pay back 60% of the PIP - fewer fees and costs.

None of this stuff is written in stone, and litigation is quite rare. Be advised that we have to hold the money in most cases until we resolve these issues, which we do by negotiation.

What if the other driver has PIP (called 'Third Party PIP')? They may pay your bills, but they will get a credit for what they pay against your eventual total recovery.

One final thing: there is a very complicated rule in Washington known as the Mahler rule, named after a significant court case, that requires the insurer to 'participate' in fees and costs. That means their repayment is reduced by the same percentage as the client pays on the total recovery. Sometimes where insurance companies resolve subrogation by intercompany arbitration that can result in a payment going to the client. If this pops up we'll try to explain it to you - if we can figure it out ourselves.


Workers Compensation


The Workers Comp or L&I rules are determined as a matter of law and state regulation.

First a note on Workers Comp. Workers Compensation reflects a huge social compromise that came about at the end of the last century. States began to recognize that work injuries were a major problem. Workers were injured and mostly thrown out on the street; however, sometimes they could in turn cripple businesses by suing over those injuries. The solution, as such, was the Workers Compensation system which goes like this: any worker injured on the job, regardless of who was at fault, gets compensation for lost earnings and medical care. No worker may sue his employer or co-workers for those injuries. The workers lose the right to sue for pain and suffering; the employer loses the right to argue the injury was not its fault.

But there are circumstances where a worker can sue somebody other than the employer for the injury. Common example: a worker is hurt in a car accident while carrying out business for his employer. Then the worker can - in fact, must - sue the Third Party, and once again, any double recover is reimbursed to the state. In Washington, there is a complicated rule that gives the worker the first 25% as an incentive to sue.

In both States, these folks have a legally enforceable lien on the settlement proceeds that we have to resolve before releasing money to you.




So, what is a lien? Legally it is an ownership right that is granted to a third party against money being held by the attorney, much like a mortgage or a bank security interest in a car you're buying. Liens are created by statute and they create a real problem for lawyers because of our legal obligations to our clients and to third parties.

When a lawyer recovers money for a client, and the sum of money we recover belongs in part to the client and in part someone else (such as a lien or to us for fees) we must place the money in our Trust Account initially; then determine who the money belongs to, and then pay it out. The rules state that any money we hold that belongs to a client, we must give to the client upon demand. However, the rule also states that where there is a dispute as to the ownership of the funds in our trust account, we may not give the money to anybody until we resolve that dispute, either by negotiating or in rare cases, by paying the money into the Court and letting the Court decide.

Like most things legal, liens are rarely written in concrete. The validity of a lien and more important, the amount of the lien, is often in dispute. We will often hold in our trust account, the maximum amount of a lien claim, while we try to resolve it: if it ends up being less than the maximum, we pay the remainder back to the client.


What kinds of liens are there?


- Attorneys Fees are subject to a lien under RCW 60.40.010 and this lien by law "is superior to all other liens." That means we get regardless. This sounds like a self-serving provision put in by the lawyers' lobby to protect our butts, and to some extent it is, but it is also necessary because without it, every time there is a lien dispute we would face a conflict of interest and would have withdrawn from the case. Chaos would ensue!

- Medical Providers may create a lien under RCW 60.44.010. They have to record a written document with the County Auditor, and the total of all such liens may not exceed 25% of the gross recovery.

- Medicare, Medicaid, DSHS, Workers Compensation, VA, and others may have a lien by statute, often Federal Statute, and these liens are generally very enforceable and very concrete.

- Doctors, settlement loan companies, and others may have clients sign documents that create an assignment of proceeds and call it a loan. Our position is that if we do not agree to be bound by such agreements, they are not effective, and our fee agreement provides for that.

These answers should be considered general explanations. Always keep in mind that everyone's situation is different, and the whole reason for the law and for lawyers is to find the best, legal solution for individual cases.