California State Disability Insurance

California is one of only five states plus the Commonwealth of Puerto Rico that has state mandated disability insurance. It is paid for through payroll deductions and most employees in the State of California are eligible. While it is similar to private disability insurance and federal Social Security Disability Insurance, there are some radical differences. The most important fact to know about California State Disability Insurance is that it is basically a wage replacement insurance policy to compensate for loss of wages due to covered illnesses, injuries, disabilities and certain types of family leave.

Who Is Eligible?
Under California state law, anyone who works and pays premiums through his or her payroll taxes is eligible to be covered under the state mandated disability insurance with a few exceptions. Those who are ineligible would be anyone claiming a religious exemption, some employees of non-profit organizations, almost all government employees, some workers classified as ‘domestic,’ and workers on the Interstate Railroad. Individuals who are self-employed or own and operate a business can participate in what is known as ‘elective coverage.’

What is Paid Family Leave?
Unlike the federally sponsored Supplemental Security Income (SSI) or private disability insurance, California State Disability Insurance covers family leave under certain conditions. Most often a claim is filed when caring for a loved one (under certain specific conditions) and to bond with a newborn, similar to maternity leave but open to either parent. The medical requirements for family leave would necessitate that the family member being cared for would need to have a physical or mental condition requiring hospice care, hospitalization or treatment requiring a medical residential facility.

Key Features of California State Disability Insurance Benefits
Most questions about California State Disability Insurance, also referred to as SDI, surround issues like how much will be paid, when benefits will start and how long they will last. Here are some key features of SDI:

  1. Only wage replacement coverage – no health insurance
  2. Pays 55% of wages prior to disability
  3. Amount based on highest quarter of four – beginning six months prior
  4. Benefits paid up to 52 weeks based on medical provider’s statement
  5. Partial benefits longer than 52 weeks if returning to work part time or have other income
  6. Self-employed elective coverage pays benefits up to 39 weeks
  7. Bank accounts and assets do not affect SDI benefits
  8. Seven day waiting period prior to payment
  9. Benefits paid every two weeks
  10. You can collect benefits even if receiving SSI or SSDI
  11. You can collect benefits if receiving private disability insurance
  12. You cannot collect benefits if receiving Unemployment Insurance
  13. Benefits are not taxable
  14. If you work while receiving benefits, SDI will be reduced
  15. Claims should be filed between the 9th and 49th days of disability
  16. Pregnancy benefits 10 weeks – 4 weeks prior and 6 weeks after delivery

Although California State Disability Insurance resembles Social Security Disability Insurance and private disability insurance is several ways, there are some key differences that are important to understand. One of those differences being how long it takes to begin receiving benefits. SSDI can take many, many months to commence, but SDI begins on the 8th day and is paid bi-weekly. Unlike SSDI where the person is expected to be disabled longer than a year, California State Disability Insurance kicks in if the insured will lose wages for a time greater than a week. If you live and work in the State of California and are interested in learning more about SDI, contact your current group health insurance provider or the State of California web page for complete details.

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