How is Social Security Disability (SSD) or SSI Calculated?
If you are in the process of applying for Social Security disability benefits (SSDI) or Supplemental Security Income (SSI), you may be wondering what your maximum monthly benefit payment is. You can quickly find this out by contacting the Social Security Administration (SSA) to receive an estimate or you can visit our website for a quicker response and use the disability calculator.
The monthly benefit for SSDI is based on a complex formula, while the benefit for SSI is relatively simple. Both formulas will be described in this article, as well as some general details about financial eligibility for these programs.
It is important to mention that if you believe that you are disabled, you should get started with your application right away, because there are many factors involved in determining your eligibility that the SSA will consider.
Your Monthly Benefits For SSDI Is Not Based On Your Disability
The amount that you receive for Social Security disability (SSDI) is based on your earnings before you became disabled. Your payment is not based the severity of your disability, however your current income must be below a certain threshold to be eligible for SSDI. If you receive payments for your disability from other government sources, your monthly payment for SSD may be lowered.
A Complex Weighted Formula is Used to Calculate Your Disability Benefits
Every SSDI recipient receives a unique amount of money. Your SSDI benefits are based on the income that you have paid Social Security taxes on in the past. This income is called your “covered earnings”. The average of your covered earnings over several years is called your average indexed monthly earnings (AIME).
You can view your covered earnings history by visiting www.ssa.gov/mystatement or you can check your Social Security statement which is sent every five years to those under the age of 60.
The more money that you have earned and paid Social Security taxes on, the higher the amount that you are eligible to receive in disability payments. However, it is important to note that there are maximums in place in spite of the applicant’s earnings. The maximum benefit as of 2015 is $2,663 per month, and most people receive between $1000 and $1200 per month in benefits on average.
Once your AIME is calculated, a formula is applied to your AIME to calculate your primary insurance amount (PIA). Using your PIA, the Social Security Administration can calculate your monthly benefit amount.
This may seem complicated, and you are not expected to calculate your disability benefits on your own. You can contact the SSA or your local Social Security office to get an accurate estimate of your potential monthly benefits for SSDI. A representative will ask you questions about your past earnings and other relevant questions and calculate your estimated benefit for you.
For a quick estimate, the online social security disability income calculator provided by Represent Myself allows you to enter your salary information to calculate your estimated monthly disability benefit. The calculator is very simple and easy to use, and you can get a quick estimate of your monthly benefit amount with just a few pieces of information.
There is a more detailed calculator that you can use on the Social Security Administration’s website, and this calculator requires more information including your annual earnings every year since 1951, and your expected earnings for the current year and the following year.
The SSA disability calculator can be viewed here: http://www.ssa.gov/planners/retire/AnypiaApplet.html
Your SSDI Amount Can be Reduced From Other Disability Payments
If you receive payments from a long term disability insurance policy, your SSDI payments will not be affected. However, payments from other government run disability programs such as state disability benefits or worker’s comp payments can reduce your SSDI payments.
If your earnings from government run disability programs like worker’s comp combined with your SSDI earnings exceed 80% of your average income before you became disabled, your SSDI payments will be reduced.
VA and SSI benefits do not reduce your SSDI benefits, however your SSDI benefits can reduce your SSI benefits.
Financial Eligibility for Social Security Disability
The financial eligibility requirements for SSDI and SSI differ. In order to receive SSDI, the prospective recipient must be able to demonstrate they have a disability that is medically determinable, that will continue to last no less than twelve months, and that prevents the individual from engaging in substantial gainful activity.
Substantial Gainful Activity – SGA
is an important concept to understand when pursuing Social Security Disability Insurance or Supplemental Security Income. The Social Security Administration defines it as “the performance of significant mental and/or physical duties for profit”.
SGA maximum amounts are set by the Social Security Administration and change regularly. If the SSA determines that your income is below the SGA maximum amount, you are financially eligible for disability payments. A higher SGA maximum amount is always set for blind individuals.
Your specific SGA income is calculated based on your gross earnings or your wages before taxes are taken out by the SSA. Impairment related work expenses are subtracted from the calculation, and you should not assume that you do not qualify for SSDI just because you earn a certain amount that exceeds the current SGA maximum.
It is important to note that SGA amounts change on a regular basis based on the national average wage index.
For more information on calculating your SGA income, you can contact your local Social Security field office to determine whether or not you meet the threshold with your current income and disability related expenses.
How SSI Differs from SSDI
SSI is slightly different from SSDI, although both programs are run by the Social Security Administration. SSI is a cooperative program between your state and the federal government.
Supplemental Security Income is a program that is strictly need-based, according to income and assets, and is funded by general fund taxes. SSI is called a “means-tested program,” meaning it has nothing to do with work history, but strictly with financial need.
SSI disability benefits are available to low-income individuals who haven’t earned enough work credits to qualify for SSDI.
Your Monthly Benefits for SSI
Calculating your monthly benefits for SSI is simple. If you meet the qualifications as described below, and your application for SSI is approved, you will receive benefits of $733 per month (for individuals) or $1,100 per month (for couples), minus a portion of your current income.
The federal amount for SSI is set in January of every year. You may receive an additional payment on top of your SSI benefits called a State Supplementary Payment. The availability of this program varies from one state to another.
Financial Eligibility for SSI
Your income requirements for SSI depend on the state in which you live. You must have a very low monthly income, and approximately half of your current income is taken into account. The amount is set by your particular state, and it is usually between $700 and $1400 per month, and some states allow individuals with higher incomes to still qualify for SSI. You must own less than $2,000 in property (minus your home and car) for individuals, or $3,000 for a couple.
In addition to these financial requirements, you must be disabled, blind or over the age of 65. You must also be a citizen of the United States or meet very specific requirements based on military service, U.S. permanent residency, or refugee or political asylum status.
If you are disabled and are approved for SSI, you are also normally able to participate in the Medicaid program in your state, as well the food stamp program. There are specific state stipulations that must be met for these programs.
Back Payments and Retroactive Payments are Often Included Once You are Approved
When you are approved for SSDI or SSI, you are often approved with back payments or retroactive payments included. Back payments are any disability benefits that are past due, or the benefits that you would have been paid if your initial application was approved right away.
Retroactive payments are for the months that you were disabled and could not work. You are eligible for retroactive payments only with SSDI and not SSI.
Disability Help Center Can Help You with Your Disability Claim
If you are currently in the process of applying for Social Security disability or SSI, you probably are already aware that it is a challenging and drawn out process.
Represent Myself offers you expert guidance, video tutorials, and support from knowledgeable professionals who understand how the application and appeals process works.
With our tools and knowledge, you will never need to hire a disability lawyer to obtain benefits which can save you a substantial amount of time and money.
We encourage you to apply for social security disability or SSI, even if you are not sure whether or not you will qualify. A representative at your local Social Security field office will be able to inform you about your eligibility based on your income and expenses.
Don’t assume that you won’t be eligible just because you earn a certain amount or aren’t sure about your eligibility. The SSA considers many factors when calculating your eligibility for SSDI or SSI and the amount that you can qualify for.