When a medical condition causes a disability that affects your ability to earn income through employment or self-employment, it may be difficult or impossible to pay your bills. Approval of your application for a monthly Social Security disability benefit payment may provide much-needed financial assistance.
The disability advocates at London Disability understand that the rules and regulations that control how Social Security determines the amount you may receive each month through Social Security disability are confusing because of their complexity. Until you have an opportunity to talk to the SSD specialist at London Disability to find out about the benefit that specifically applies to you, here is an overview of how Social Security determines the Social Security disability benefit amount you are entitled to receive.
Social Security Disability Income program benefits
SSDI is a program administered by Social Security to pay monthly benefits to insured individuals who qualify for them. To be insured through SSDI, you must have worked long enough at a job that withheld Social Security payroll taxes from your wages. Self-employed individuals may be insured by paying Social Security taxes on their income.
If you worked long enough to be insured through SSDI, you also must be disabled. The definition of disabled for purposes of SSDI is a medically determinable physical or mental impairment that prevents you from engaging in substantial gainful activity. The impairment or impairments must have lasted or be expected to last for at least 12 continuous months or cause death.
As long as your disability satisfies the definition used by Social Security, it does not play a role in determining the amount of the monthly Social Security disability benefit that you receive. The income that you earned over the years does factor into the maximum amount of the SSDI benefit you get as long as the earnings were subject to Social Security taxes.
Social Security computes SSDI benefits through use of a formula that indexes your earnings to take into account wage-level changes throughout your work history. The formula allows Social Security to determine your primary insurance amount.
Social Security disability and retirement benefits are subject to annual adjustment to reflect changes in the cost of living. For 2021, the maximum monthly SSDI payment you may receive is $3,148. The average monthly benefit, however, through the SSDI program in 2021 is only $1,280.
Let your disability advocate review your work record
An important point to keep in mind about SSDI benefits is that income you had from work or self-employment that was not subject to payment of Social Security taxes does not factor into the formula used to compute the benefit you actually receive. If you have questions about the amount shown in your approval letter as your monthly benefit, ask an SSDI specialist at London Disability to review your work and earnings history to make certain a mistake was not made.
Disability benefits through Supplemental Security Income
The fact that you may not have worked long enough or at all to be insured through SSDI does not preclude you from applying for benefits through the SSI program. SSI is a needs-based program, which means that generally you cannot have resources valued in excess of $2,000 as an individual or $3,000 if you are a couple. Some resources, such as a home used as a principal residence, or a car used by you or a member of your household for transportation may be excluded as a resource.
Blind or disabled adults or children who meet the resource and income limitations of the SSI program may receive a maximum monthly benefit of $794 in 2021. Couples may receive up to $1,191 in 2021. As with SSDI benefits, Social Security makes annual adjustments to SSI benefits based on the cost of living.
The $794 a month received by an individual and $1,191 monthly benefit for a couple represent the maximum federal benefit through SSI. If you live in one of the several states that supplement the payment from the federal government, your total monthly benefit will be higher than an SSI recipient living in a state that does offer a supplement.
Working while collecting SSI benefits, which is allowed under federal regulations, may reduce your monthly benefit. However, it should not come as a surprise to learn Social Security has special rules defining different types of income.
Countable income, which acts as a dollar-for-dollar reduction in benefits, does not include all income. For example, you exclude the first $60 of earned income each month and half of the remaining earned income to compute countable income. Other exclusions may also apply, so ask your SSI specialist at London Disability to go over them with you.
Learn more about Social Security disability
If you have questions about applying for either of the Social Security disability benefit programs or the amount of money that you receive each month, talk to a disability advocate at London Disability. They will carefully review your records to ensure that you receive the payments you are entitled to receive whether through SSI or SSDI.