Before deciding to apply for disability benefits, many people wonder how much the Social Security Administration (SSA) actually pays for disability. It is smart to start thinking about your potential disability benefits payment amount before filing a disability application, because the type of disability you apply for will have an impact on your monthly payment amount.
Supplemental Security Income vs Social Security Disability Income
Supplemental Security Income (SSI) is the disability program that provides payments to people who have low income, assets, and resources in their name and in their household. To be eligible to apply for SSI, the disability applicant has to show that they are financially eligible for the program before the SSA will determine if they are disabled.
Social Security Disability Insurance (SSDI) is the disability program that provides payments to people who have earned enough work credits and are still insured by those work credits. To be eligible to apply for SSDI, the SSA will review your work history and the income taxes that you’ve paid in to determine your insured status before determining if you are disabled.
Not everyone is eligible for both SSI and SSDI, but it is possible to be eligible for both. Therefore, you want to determine your eligibility before submitting your application. Filing the wrong disability claim can lead to you getting less money than you could have had if your claim is approved, as the SSI payment amount is a fixed amount, called the Federal Benefit Rate (FBR), and the SSDI payment amount is based on your past wages, which can lead to a monthly payment higher than the Federal Benefit Rate.
Make sure not to confuse SSI and SSDI with SSA’s Retirement Benefit. SSI and SSDI are for people who are disabled before retirement age and if you are simply seeking to file for Retirement, you do not need to prove a disability or have an attorney. However, an experienced attorney could be a valuable asset in SSI and SSDI claims because you need to prove to the Social Security Administration that you are disabled and cannot work before you can be paid disability benefits.
It is also important to note that how much you may receive monthly is not based on how disabled you are like veteran’s disability through the VA. Once you are found to be disabled, your payment is based on the FBR, your past earnings and other benefits that you may be receiving.
Calculating SSI Benefits
Calculating your SSI benefit amount starts by looking at the FBR. The FBR is the maximum monthly payment amount that a disabled person can receive under SSI. The FBR changes annually as the SSA adjusts the amount to reflect cost of living increases and inflation. For 2020, the FBR is $783 for individuals that are eligible and $1,175 for eligible married couples. As stated, the FBR is the maximum payment from the SSA. However, there may be reductions in that payment amount or supplements to the payment amount, as discussed below.
Calculating your potential SSDI benefit amount starts by looking at your average lifetime earnings. There is no base rate for SSDI like there is for SSI. The SSA will utilize a formula to calculate your benefit amount that takes into account your covered earnings (earnings where you paid income taxes). Thankfully, you can get an estimate of your specific benefit amount on the SSA’s website by using one of their Social Security Calculators. For high earners, it is important to note that there is a maximum payment amount that also fluctuates annually. For 2020, the maximum monthly SSDI benefit amount is $3011 for an eligible individual. Like SSI, there can be reductions to the SSDI payment.
Other Factors that Affect Your Potential Payment
As discussed above, the SSI and SSDI benefits amounts start by looking at the FBR and average lifetime earnings respectively. From there, if you qualify, there can be reductions and supplements to that starting monthly payment amount. When calculating how much you will be paid monthly, the SSA will also look at things like other disability payments that you receive, if others provide you with financial support and which state you live in.
VA and Private Disability Insurance
One piece of good news is that VA disability and private disability insurance benefits, like a short-term or long-term disability policy, do not affect your SSDI benefits. The short-term or long-term disability insurer may seek reimbursement for payouts during the time that you also received disability from the SSA, but the SSA will not reduce your SSDI payment if you received short-term or long-term disability. However, those non-SSA benefits may affect your SSI payments if they are high enough to make you financially ineligible for SSI.
Workers’ Comp and State Disability
The bad news is that some benefits, like workers’ compensation and state disability benefits, do affect your monthly SSDI benefits and can reduce your monthly payment amount. If you receive workers’ compensation for a work-related condition or state or federal employee disability compensation, the SSA can reduce your monthly SSDI payment to ensure that the combination of all the benefits does not exceed 80% of your average earnings before you became disabled.
Long story short, the SSA will prevent you from making a profit off of being disabled. If you receive workers’ compensation and/or state or federal employee disability benefits, it is a good idea to contact the SSA to determine your average earnings to see if your benefits will exceed the 80% threshold. As with other benefits, workers compensation and state or federal employee disability benefits can make you financially ineligible for SSI. If you would like to read more about how Workers’ Compensation or State Disability Benefits impacts your Disability payment, the SSA has a publication available here.
When Kindness Is Income: Support From Loved Ones
For SSI benefits, the SSA can also reduce your monthly benefit amount if someone else is providing for you. For example, if a friend or family member buys your food or pays your rent, the SSA will consider that to be income. The SSA calls this In-Kind Support and Maintenance (ISM). If there is ISM, the SSA will total the value of the ISM and reduce your SSI payment by the amount given to you.
Upward Adjustments and Increasing Your Potential Benefit Amount
Thankfully, there can be supplements or increases to the monthly payment amount. As stated above, some disability applicants are eligible for SSI and SSDI. If your averaged lifetime earnings calculation would lead to you having an SSDI payment below the FBR and you are otherwise financially eligible for SSI, you can receive SSDI and SSI once approved. The SSI would supplement the SSDI benefit amount to bring you up to the FBR of $783. Also, the vast majority of states provide a State Supplement for SSI benefits. The supplemental payment ranges from an extra $100 to $400 per month and depends on where you reside. The amount will be determined by factors like your residence and care needs; i.e. being a resident in a nursing home or permanent care facility.
If You Think You May Not Be Getting the Benefits You Deserve, Contact an Experienced Social Security Disability Attorney
The Social Security system is complicated, and there are many, many moving parts. How do you know you’re filing in the right order and how do you try to ensure you get the benefits you’re entitled to receive? Contact the Law Offices of James Scott Farrin for a free case evaluation at 866-900-7078. We’re here to assist you!