Securing Social Security Disability Insurance (SSDI) benefits can be a significant relief for those facing limitations due to a disability. But a crucial question remains: how much will you receive each month? Unlike some disability programs, SSDI payments aren’t based on the severity of your condition or current income. Instead, the focus shifts to your historical earnings potential.
This article delves into the world of SSDI payments, explaining how the benefit amount is calculated, the average range you can expect, and factors that can impact your monthly payout.
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SSDI Payments: Based on Past Earnings, Not Current Disability
One of the key characteristics of SSDI is that the benefit amount hinges on your average lifetime earnings before your disability prevents you from working. This approach ensures that individuals who contributed more to the Social Security system through payroll taxes receive a higher monthly benefit.
Here’s a breakdown of how your disability doesn’t directly affect the payment amount:
- Severity of Disability Not a Factor: Whether your disability is mild or severe, it won’t influence the benefit calculation. The primary focus is on your past earnings history.
- Current Income Irrelevant: Your current income level doesn’t play a role in determining your SSDI payment.
Average SSDI Payment Range: A Glimpse into the Numbers
While the exact payment amount varies for each individual, it’s helpful to understand the typical range. On average, most SSDI recipients receive between $800 and $1,800 per month. The average benefit for 2020 stood at $1,258.
It’s important to remember that these are averages, and your specific benefit amount could fall outside this range.
Unveiling the Calculation: How the SSA Determines Your Monthly Benefit
The Social Security Administration (SSA) utilizes a specific formula to calculate your monthly SSDI benefit. This formula takes into account your average indexed monthly earnings (AIME). Here’s a step-by-step breakdown of the process:
- Covered Earnings: The SSA considers your income on which Social Security taxes were paid throughout your working career. These earnings are referred to as “covered earnings.”
- Average Indexed Monthly Earnings (AIME): The SSA calculates your AIME by averaging your covered earnings over a specific period (typically 35 years) and then adjusting them for inflation.
- Primary Insurance Amount (PIA): Using a formula applied to your AIME, the SSA arrives at your PIA. This PIA serves as the foundation for determining your final benefit amount.
Accessing Your Earnings History:
There are multiple ways to access your covered earnings history:
- Social Security Statement: You can view your annual Social Security Statement online at https://www.ssa.gov/myaccount/. This statement outlines your covered earnings.
- Benefits Calculator: The SSA offers an online benefits calculator at https://www.ssa.gov/benefits/calculators/ that allows you to estimate your potential benefits based on your earnings history (if you are comfortable entering the information yourself).
- Local Social Security Office: Contact your local Social Security office, and a representative can assist you in estimating your benefits.
Factors that Can Reduce Your SSDI Payment
While private long-term disability insurance benefits won’t affect your SSDI payout, certain government-regulated disability benefits can. Here’s what you need to know:
- Combined Benefits Exceeding 80% of Previous Earnings: If the sum of your SSDI benefit and other disability benefits surpasses 80% of your average past earnings, your SSDI payment may be reduced. This is to prevent individuals from receiving more disability benefits than they earned while working.
- Workers’ Compensation and Temporary Disability: Benefits from workers’ compensation or temporary state disability programs can potentially reduce your SSDI payout if the combined amount exceeds the 80% threshold mentioned above.
Exceptions to Benefit Reduction:
- Supplemental Security Income (SSI) and Veterans Affairs (VA) benefits won’t have an impact on your SSDI payment.
Social Security Backpay: Receiving Benefits for Waiting Months
When your SSDI application is approved, you might be eligible for back pay. This refers to a lump sum payment that covers the months you waited for approval while your disability was already in effect. The amount of backpay you receive depends on your monthly SSDI amount and the timeframe between your application date and your disability onset date.