The top concern for most disability applicants is how much money they will have to live on if they are disabled. If you ask this question, you are not alone; everyone wants to know. If you are a disabled worker, Social Security benefits are determined by your cumulative earnings and age.
Therefore, clarity of your benefit amount is crucial because you need to plan for your future. Unfortunately, the severity of illness does not determine how much money will be received every month.
If your disability insurance provider finds that you are disabled, you will receive compensation for your disabling condition(s), determined by the Social Security Administration (SSA) or other disability providers.
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To Many Variables
The problem with determining claimant benefits is that there are so many variables that can impact how much money you will receive. Example: The Date of Last Insured (DOL). This date determines if you are “insured” under the SSA system.
When you pay FICA (note on your pay stub), it’s similar to paying an insurance premium to an insurance company. If you stop contributing to insurance premiums after about five years, you are no longer “covered” or “insured.”
The SSA determines monthly allotments for disability and retirement benefits from a claimant’s lifetime earnings, referred to as “covered earnings”, that accumulate before applying for disability.
How Much Will You Earn
The earnings accrued when your employer takes money out of your wages for Social Security are referred to as FICA. The more a claimant earns during this payroll period, the greater your monthly allotment.
Suppose you want to get the precise amount that you will receive every month. SSA uses a complicated formula using a series of calculations. This formula includes using your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA) to determine the exact amount.
The PIA amount is simply the amount you would get if you were to become disabled. Finally, this amount is used to calculate your established benefit. The formula consists of different amounts of income called “bend points”, adjusted each year.
Monthly Calculations
The best way to determine your monthly disability amount is to:
1) log onto ssa.gov/myaccount (establish one)
2) you may use an SSA online benefits calculator
The online benefits calculator is a guide and is not a guaranteed amount that you can receive. However, these resources can help you get a good idea of how much income you can expect.
You can also contact your local Social Security office, a field representative will be able to help you estimate what benefits you may receive. (During COVID-19, wait times may be extended).
Average Amounts
Assuming you have a strong work history, the average SSDI payment is ($800-$1800). For 2021, the amount is $1,277, the amount for SSI is $794 for individuals. If you are entitled to other government income, your monthly allotment may be impacted.
Benefit Reductions
Your Social Security may be “offset” or reduced if you receive a pension or did work for which you did not pay social security tax. It is essential to know VA benefits and long-term disability payments from Private Disability benefits are not considered offsets and will not be deducted.
Back Pay Amounts
Once you are approved for disability, the SSA calculates your monthly benefits. Suppose you are entitled to a back pay award; the amount determined is based on several factors.
Once you file your application, the clock begins. The Social Security Administration will grant you back pay from the time you filed until the day you were approved.
The SSA looks at the Establishment Onset Date (EOD) of your disability to determine when you became disabled. Then, the SSA will decide how many months of additional back pay you are entitled to, up to 12 months of payments.
