Reduction For Disability Payments From Other Sources
If you receive disability benefits from a private source, like a private pension or private insurance benefits, these benefits will not affect your SSDI benefits. If, however, you receive other public disability benefits, they may affect your SSDI benefits. For instance, if you were injured on the job and are receiving workers’ compensation benefits, the amount of SSDI benefits you receive might be reduced.
Other disability benefits that are not job-related and are paid for by the federal, state, or local government may also reduce your SSDI benefit amount. Examples of these include temporary disability benefits paid by the state, military disability benefits, and state or local government retirement benefits that are based on disability. Some public benefits are not counted toward the 80%, including SSI or VA benefits.
The combined total amounts you receive from SSDI and all other public disability benefits cannot be more than 80% of the average amount you earned before you became disabled. If the amount is more than 80% of what your average earnings were before you became disabled, in most states, the excess amount is deducted from your SSDI benefits.
The interaction between workers’ compensation and SSDI can be complicated and varies depending on what state you live in. If you qualify for more than one public disability benefit, you may want to speak with an attorney to make sure you do not miss out on any benefits you are entitled to.
Basic Formula To Calculate Social Security Benefits
The primary insurance amount is based on the earnings of the worker on whose account that benefits are claimed. The basic formula to calculate Social Security benefits and PIA will be discussed here. However, in reality, the Social Security calculate social Security benefits using SSA’s computers and the actual calculations are complicated.
The first step to calculate Social Security benefits is to index earnings to adjust earnings of earlier years for inflation occurring now. The worker’s annual earnings for each of the past years is indexed.
Determine number of years to use to Calculate Social Security benefits
After the earnings for all years prior to the indexing year have been indexed, the Social Security Administration then determines how many years to use to calculate Social Security Benefits.
For people who were born before 1930, subtract 1951 from the year of attainment of age 62, start of disability, or death – whichever is earliest.
For people who were born in or after 1930, add 22 to the year of birth. Subtract that number from the year of attainment of age 62, start of disability, or death.
For Social Security retirement benefits and survivor benefits, subtract 5. The resulting number is called ‘computation years’.
For Social Security Disability benefits:
Add up the total indexed earnings
How Your Social Security Benefits Are Calculated
Your Social Security benefits are based on the 35 calendar years in which you earned the most money. If you have fewer than 35 years of earnings, each year with no earnings will be factored in at zero. You can increase your Social Security benefit at any time by replacing a zero or low-income year with a higher-income year.
There is a maximum Social Security benefit amount you can receive, though it depends on the age you retire. For someone at full retirement age in 2021, the maximum monthly benefit is $3,113. For someone filing at age 70, the maximum monthly amount is $3,895.
Dont Miss: How To Calculate Disability Retirement Pay
Read Also: 9797761510
What If You Don’t Have Enough Work Credits
If you don’t have enough work credits to qualify for SSDI, it’s possible you may be able to qualify based on a spouse’s or parent’s work record. For example:
- Widows or widowers between the ages of 50 and 60 who become disabled may qualify for widow’s disability benefits based on a spouse’s work history.
- If you become disabled before age 22, you can be classified as an adult child and potentially become eligible for SSDI benefits based on a parent’s work history.
The Social Security Administration has more information on qualifying for benefits on a family member’s work history. If you can’t qualify based on your own work record or a family member’s work record, then you will not be able to get SSDI benefits. However, you may still be eligible for disability benefits through the Supplemental Security Income program.
If Your Spouse Is Eligible For Ssdi You Can Apply For Those Payments Even If Youre Divorced Or Widowed
Spousal and dependent SSDI benefits arent exactly disability secrets, but they arent well-publicized, either. So how, exactly, do dependent disability benefits work? Lets start with still-married couples. Imagine your husband gets monthly SSDI, but prefers that you receive them instead. If your spouse has a progressive disability that causes gradual cognitive decline , this makes perfect sense. Can you apply to receive his monthly disability check from the SSA? Yes, provided that your spouse is at least 62 or you care for that spouses child under age 16.
Heres an example for divorced couples: Lets say your ex-spouse qualified for SSDI, but then you split up. As long as your marriage lasted 10 years or longer, you can still apply for your former spouses benefits. The same rule applies for divorced co-parents whose children are age 16 or younger.
Now lets talk about survivor benefits, which can transfer to a beneficiarys dependents after they pass away. If your spouse dies while getting SSDI, any of the deceaseds dependents may qualify for those benefits going forward. The SSA typically reduces survivor benefits using a calculation based on the widowed spouses and any dependent childrens ages. If you already reached full retirement age, you can likely receive your deceased spouses full payment amount. To see how much you may qualify for, scroll down to page 6 in the SSAs Survivor Benefits brochure.
Donât Miss: Va Lower Back Rating
Recommended Reading: Sdi Benefits Calculator
Indexing Factors For Earnings
Indexing earnings When we compute a person’s benefit, we use the national average wage indexing series to index that person’s earnings. Such indexation ensures that a worker’s future benefits reflect the general rise in the standard of living that occurred during his or her working lifetime.
Eligibility and indexing Wage indexing depends on the year in which a person is first eligible to receive benefits. For retirement, eligibility is at age 62. So if a person reaches age 62 in 2022, then 2022 is the person’s year of eligibility.
An individual’s earnings are always indexed to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2022, the person’s earnings would be indexed to the average wage index for 2020 . Earnings in a year before 2020 would be multiplied by the ratio of 55,628.60 to the average wage index for that year earnings in 2020 or later would be taken at face value.
Year of eligibilityNote: If you select a year after 2022, we will use average wage changes that were estimated under the intermediate assumptions in the latest Trustees Report.
What Is The Listing Of Impairments
The Listing of Impairments is a list of conditions or health problems the SSA has prepared that are usually considered severe enough to allow you to qualify for benefits. It’s divided into Part A, which lists adult conditions, and Part B, which lists children’s conditions.
Within each part, there are specific categories of medical ailments that deal with different parts of the body, including:
- The Musculoskeletal System
- Congenital Disorders that Affect Multiple Body Systems
- Neurological Disorders
- Immune System Disorders
In each of these individual subsections are diseases, disorders, and medical problems that the SSA believes may allow you to qualify for benefits. However, having a listed condition still isn’t enough. The SSA also lists specific symptoms you must exhibit or criteria you must meet to qualify for benefits based on that condition.
For example, to qualify for disability benefits based on chronic heart failure, you must be undergoing treatment and still have medically documented proof of systolic or diastolic failure. The SSA even defines exactly what it considers to be systolic or diastolic failure.
The chronic heart failure also must result in: persistent symptoms of heart failure that interfere with daily living three or more separate episodes of acute congestive heart failure over a consecutive 12-month period or an inability to perform an exercise tolerance test for specified reasons, such as chest discomfort.
How Social Security Disability Benefits Are Calculated
Social Security Disability benefits are typically calculated based on your work history, age, and medical conditions. The more quarters you have worked, the more Social Security Disability you will get.
Social Security Disability Insurance, or SSDI, is a financial aid program by the Social Security Administration that benefits those who are no longer able to work due to disabilities. The program provides a monthly stipend to disabled individuals based on their work history, providing much-needed monetary relief.
If you have earned enough work credits to qualify for SSDI payments or you are in the process of applying for an SSDI benefits approval, you may be wondering, how is SSDI calculated?
This article covers everything you need to know regarding how Social Security Benefits are calculated.
How Is The Amount Of Social Security Disability Benefits Calculated
Most of our clients at Attorney Scott Londons London Eligibility Advocates want to know how the amount of their Social Security Disability benefits is determined. We always want our clients to have a complete understanding of their SSD benefits and to feel confident that they are receiving the maximum SSDI benefit to which they are entitled.
This post will explain exactly how each SSD benefit recipients benefit amount is arrived at and what calculations are used to reach the final figure.
Recommended Reading: Va Disability Change Direct Deposit
Reducing Your Payment By Other Disability Payments
If you receive disability benefits from private a long-term disability insurance policy, these benefits will not affect your SSDI benefits. However, if you receive government-regulated disability benefits, such as workers’ comp benefits or temporary state disability benefits, they can affect your SSDI benefits in the following way: You cannot receive more than 80% of the average amount you earned before you became disabled in SSDI and other disability benefits. If you do, your SSDI or other benefits will be reduced. However, SSI and VA benefits will not reduce your SSDI benefit.
Potential Ways Your Payment Can Be Reduced In Ssdi Benefit Calculation
Speaking of behaving appropriately, there are actually quite a few ways in which the Social Security Administration can deduct benefits while in SSDI Benefit Calculation from a social security disability insurance payment.
Its worth mentioning that the Social Security Administration does make a distinction between private disability insurance payouts and government disability insurance payouts.
This means that if you have your own private disability insurance policy that youre collecting money from, then the Social Security Administration will not touch that money or use it as a basis for deducting benefits from their own monthly payout.
Despite this concession, there are still plenty of other government-based programs that the Social Security Administration will gladly deduct payments from.
This includes workers compensation, temporary state disability benefits, and any other government program that pays out benefits to people affected with disabilities. When you collect money from these programs, all of it serves as a deduction from the Social Security Administrations social security disability insurance payouts.
In addition to these types of deductions, there are also other restrictions on the maximum value of a Social Security Administration payout. In terms of a maximum benefit that any one person can be entitled to in 2016, the Social Security Administration has set the limit at $2,639.
You May Like: How To Calculate Disability Retirement Pay
Third Annual Cost Of Living Allowance
Every year since 197, the Social Security Administration issues a Cost-of-Living Allowance supplement to SSDI benefit recipients monthly payments. The COLA is adjusted each year to try to make SSD benefit payments keep pace with inflation.
The amount of each years COLA is based on any increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers using Bureau of Labor Statistics figures. Essentially, the process aims to determine if wages have kept up with price increases. In years when the data shows inflation occurred since the last year a COLA was issued, the SSA issues a new increase in your monthly SSDI benefit.
Since the data collected from 2020 and 2021 show a high rate of inflation, the 2022 SSD COLA increase will be 5.9%. For our imaginary Mr. Penn from our example above, that 5.9% COLA bump would bring his monthly payment from $2,203.00 to $2,332.00, an addition of $120 each month, or $1,440 annually. This year is a remarkably large COLA increase due to the extraordinary economic disruptions related to the Covid-19 pandemic.
Social Security Disability Benefits By The Numbers
Generally speaking, the maximum Social Security disability benefit you and your family can receive is between 150% and 180% of your disability benefit, though each family member may be eligible to receive up to 50% of your monthly benefit amount. Keep in mind, there is a limit to the amount one family can receive in disability benefits.
Your spouse can begin receiving Social Security disability benefits at age 62 or older, or at any age if theyre caring for a child under age 16 or who is disabled.
Children can receive benefits as long as theyre unmarried and meet one of the following criteria:
- Under the age of 18
- Between 18 and 19 years old and a full-time student in grade 12 or below
- Age 18 or older with a disability that started before age 22
Benefits for children generally cease once they turn 18 unless they are disabled. If the child is still in school when they turn 18, the benefits will continue until they graduate or until two months after they turn 19, whichever comes first.
Widows and widowers can also receive benefits if they are between 50 and 60 years old, meet the definition of a disabled adult, and their disability started before or within seven years of their spouses death.
Social Security benefits generally increase year over year, depending on the cost of living. This is called the Cost of Living Adjustment, or COLA. In January 2021, Social Security beneficiaries receive a 1.3% COLA increase to their benefit.
Recommended Reading: Can You Get Crsc And Va Disability
If You Have Lived In Canada Less Than 40 Years
Not everyone receives the full Old Age Security pension. The amount you receive depends on the number of years you have lived in Canada.
If you lived in Canada for less than 40 years you will receive a partial payment amount. Your payment amount is based on the number of years in Canada divided by 40.
You can delay your first payment up to 5 years to get a higher amount.
If you lived in Canada for 20 years
If you lived in Canada for 20 years after age 18, you would receive a payment equal to 20 divided by 40, or 50%, of the full Old Age Security pension.
How To Get A Copy Of Your Social Security Statement
The SSA mails out Social Security Statements to follks age 25 and over before their birthdays during their 25, 30, 35, 40, 45, 50, 55, and 60 years. For those age 60 until retirement, the SSA will send out statements every year. You can also go online to get a copy of your statement or view it online. Go to www.ssa.gov/mystatement/ and open an account with Social Security to view your statement.
Recommended Reading: How Long Does Ltd Last
How To Stop Social Security If You Go Back To Work
Youll have to file whats known as a withdrawal of benefits if you want to suspend your Social Security payments and go back to work. You can only do this if youve filed for your retirement benefits within the previous 12 months, however. At that time, youll also have to repay everything that youve earned from Social Security thus far, and this includes any benefits paid to your spouse, children or other beneficiaries. At that point, the Social Security Administration will treat your filing as if it never occurred. Bear in mind that since other beneficiaries may be affected, the Social Security Administration requires them to sign a consent form as well.
To withdraw your benefits, youll have to file Form SSA-521. At that point, youll still have up to 60 days to reconsider and withdraw your application if you so desire. Otherwise, your request will be processed, and youll have to return the money that you received.
Child Benefits With Child Support Calculations
If the child’s caregiver receives child support, the SSA treats it as unearned income and will include a two-thirds of it in the childs countable income. Also, only child support that is actually received will be counted if the non-custodial parent fails to pay support, it doesn’t have an effect on the childs SSI benefit.
Don’t Miss: Sc Dept Of Disabilities And Special Needs
How To Calculate Ssdi Benefits
The first step the Social Service Administration takes when deciding your SSDI benefits is to calculate your average covered earnings through the course of your lifetime, prior to the onset of your disability.
Covered earnings refer to the wages you earned that have been deposited into Social Security Taxes or FICA by you or your employer. This is the primary factor in determining your disability benefits. Your average covered earnings are also referred to as Average Indexed Monthly Earnings
The SSA then uses a formula to determine your PIA . This is the amount you would have received had you stopped working after reaching full retirement age. With the AIME and PIA figures, the SSA then uses another fixed formula to calculate the final amount you are liable to receive.