Calculating Your Social Security Disability Payment

Your disability payment is based on your average lifetime earnings before you became disabled. The severity of disability does not factor in, although payments from other sources can.

Unlike Supplemental Security Income (SSI), which also pays benefits to people who are disabled and unable to work but is based on limited income and resources, SSDI requires that you have worked and paid Social Security taxes for a certain length of time.

The average SSDI payment is currently $1,258. The highest monthly payment you can receive from SSDI in 2020, at full retirement age, is $3,011. This article covers how the monthly benefit is calculated.

Calculating SSDI: Covered Earnings

If you are eligible for SSDI benefits, the amount you receive each month will be based on your average lifetime earnings before your disability began. This is the only factor that determines your benefit amount, although it may be reduced if you're receiving disability payments from other sources (more on this below). In other words, your SSDI benefit amount is not based on how severe your disability is, and unlike SSI, you cannot be denied SSDI because you have too much unearned income or too many resources (assets).

Your past earnings must be covered under the Social Security program in order to count towards the amount of SSDI benefits you will receive. "Covered earnings" are wages you have received from jobs that have paid into Social Security. If you have received a paycheck that had money withheld for "Social Security taxes" or "FICA," the wages you made at that job are covered earnings and will count toward calculating your benefit amount. Most wages are covered earnings.

Your SSDI payment will be based on your average covered earnings over a period of years, known as your average indexed monthly earnings (AIME). A formula is then applied to your AIME to calculate your primary insurance amount (PIA)—the basic figure the SSA uses in setting your actual benefit amount.

For example, someone in their fifties who made $100,000 for the past few years might expect a disability payment of $2,500 per month. Someone in their fifties who made $60,000 per year might expect a disability payment of $2,000 per month.

To see your entire covered earnings history, you can check your annual Social Security Statement. Check your statement by logging on to my Social Security. You can also use the benefits calculator online at www.socialsecurity.gov/planners/benefitcalculators.htm to get an estimate of the amount of your disability benefits. Or, call your local Social Security office and they will be able to help you estimate what your benefits would be.

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. (In some states, however, the excess amount is deducted from your other public benefit.)

The interaction between workers’ compensation (and other public disability benefits that may reduce your SSDI amount) 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.

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