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How Is The Amount of Social Security Disability Benefits Calculated?
When you depend on Social Security disability benefits for income because a disability prevents you from working, you want to ensure that you receive the correct amount each month. It gets a bit confusing because the Social Security Administration uses different methods depending on whether you receive SSD benefits through the Supplemental Security Income program or the Social Security Disability Insurance program.
The following information should enhance your understanding of how are SSD benefits calculated for SSI and SSDI. When you have MJ Ellis Disability Law handling your disability claim, a knowledgeable and experienced Social Security disability lawyer will do the calculations and let you know what you can anticipate receiving each month.
Calculating SSI benefits
The maximum monthly benefit payment through SSI is $794 for an individual and $1,191 for a couple. These amounts represent the federal benefit. Most states supplement the federal benefit, so your maximum SSI benefit may be higher depending upon where you live. What you receive from SSI may be less than the maximum monthly benefit because income that you receive from other sources may reduce the amount that you get from SSI.
The SSA does not, however, use all of the income you receive each month to reduce the SSI benefit paid to you. Following are a few examples of income that does not count for purposes of SSI benefits:
- The first $20 of monthly income.
- The first $65 of monthly income earned from work and half of your earned income more than the first $65.
- Up to $1,930 in monthly income earned by a student who is younger than 22 years of age. There is an annual maximum of $7,770.
For example, if you qualify for SSI and have earnings of $485 from a part-time job, the first thing you do is deduct $20 from it to reduce the income to $465. You then deduct $65 from the $465 and divide the balance in half to give you a countable income of $200, which reduces the SSI federal benefit to $594. Your SSD lawyer at MJ Ellis Disability Law can answer any questions you have about calculating your SSD benefits through SSI.
Calculating the amount of SSD benefits payable through SSDI
Income does not factor into the calculation of SSD benefits through the SSDI program as much as it does for someone receiving Social Security disability payments through the SSI program. Even though you must be disabled or blind to qualify for SSD through both programs, SSI eligibility focuses on financial need while SSDI requires that you have a work history and paid Social Security taxes on the income for a long enough duration to qualify for benefits.
The calculation of monthly SSDI benefits is based on your lifetime earnings at jobs or through self-employment that were subject to payment of Social Security taxes. In other words, the money you earned “off the books” cutting lawns would not count in calculating your SSDI benefit unless you paid Social Security taxes on the income.
The SSA uses up to 35 years of your average indexed earnings as part of a formula to compute your monthly benefit. The severity or duration of your disability does not factor into the calculation. All that matters is the amount that you earned you became disabled and could no longer work.
Up to 35 years of the earnings that were subject to payment of Social Security taxes are used by the SSA as part of a formula to compute your actual monthly payment. The formula results in a primary insurance amount or PIA, which accounts for fluctuations in general wage levels measured by the national average wage index that may have occurred while you were employed. Because the computation of monthly SSDI benefits depends on each worker’s lifetime earnings, SSDI does not have a standard benefit amount for everyone as does SSI.
Payments that reduce your SSDI benefits
Benefits that you receive through workers’ compensation or a state-administered disability benefits program may reduce the monthly payment that you receive through SSDI. Federal regulations prohibit you from receiving a combination of SSDI and other disability benefits that exceed 80% of the average earnings you had before becoming disabled.
If your benefits exceed 80% of average pre-disability earnings, your monthly SSDI payment will be reduced by the excess amount. It should be noted that benefits you receive through the SSI program and the Veterans Administration do affect the monthly benefit you receive from SSDI.
Trusted advice and representation
As with most of the rules and regulations that apply to the federal SSD programs, something as basic as knowing how your monthly Social Security disability benefit is calculated can be challenging. Fortunately, the disability professionals at MJ Ellis Disability Law make it easy for you by applying their skills and knowledge of the Social Security disability process and procedures to ensure that you get the benefits that you deserve and are entitled to receive. Contact them today for a free consultation.