Your SSDI benefits might be reduced if you get disability payments from other sources, such as workers' comp, but regular income won't affect your SSDI payment amount.
The Social Security Administration (SSA) uses your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA) to calculate your SSDI benefits. The formula Social Security uses to calculate your disability benefits is quite complicated, and most people won't be interested in trying to calculate their benefits on their own.
Social Security can give you a good estimate if you call the agency or create a "my Social Security account" on their website. But here's some information on averages.
To give you an idea of how much SSDI pays, for 2024, the average SSDI payment $1,537 per month. People whose income was fairly high in recent years can receive up to $3,822.
SSDI payments don't vary by state; your SSDI payments will stay the same no matter which state you live in.
If you're interested in how Social Security calculates your AIME and PIA, here's how.
First Social Security will determine your AIME. To do this, the SSA will adjust, or index, your lifetime earnings to account for the increase in general wages that happened during the years you worked. Social Security does this to make sure that the payments you get in the future mirror this rise.
Social Security will use up to 35 of your working years in the calculation. The SSA takes the years with the highest indexed earnings, adds them together, and divides them by the total number of months for those years. The average is then rounded down to reach your AIME.
You can see an example of how Social Security calculates an AIME on the SSA's website.
Your Primary Insurance Amount (PIA) is the base amount of your benefits. The SSA uses the total of three fixed percentages of your AIME to determine your PIA. The dollar amounts that result from the calculation are called “bend points.” Bend points are changed each year to reflect the national average wage index.
The PIA for someone who becomes eligible for SSDI benefits in 2024 is the sum (total) of the following:
If the sum of the percentages isn’t a multiple of $0.10, it will be rounded to the next lower multiple of $0.10.
The easiest way to calculate SSDI benefits is to go to www.ssa.gov/mystatement, log in, and check your benefits statement. It will tell you exactly how much SSDI you will get if you become disabled this year.
By the time most disability applicants get an approval letter from Social Security, they're eligible for back payments of SSDI benefits. The number of months of back payments you'll receive depends on when you applied for SSDI and the date the SSA decided you became disabled (called your “established onset date,” or EOD).
The amount you'll receive in total SSDI backpay equals your monthly SSDI benefit amount times the number of months the SSA owes you.
In addition to getting payments going back to your application date, you can get up to 12 months of retroactive payments for the year before your application date (or before your "protective filing date," discussed below)—if you were disabled that long ago. You can't get benefits for the months before your onset date. For more information, see our article on calculating back pay.
Once you're approved for benefits, you'll have a five-month waiting period, starting at your disability onset date, before you can be paid benefits. This means that, to receive the maximum amount of backpay (going back for the 12 months before your application date), you must have an EOD of at least 17 months before your application date (or before your protective filing date).
The one exception to this rule is for ALS; claimants who have been diagnosed with ALS, or Lou Gehrig's disease, don't have a five-month waiting period.
You can establish a protective filing date (PFD) by making a written statement to the SSA that you intend to file for disability benefits. A PFD is also established when you begin an online application, even if you don’t complete it.
Some disability payments, such as workers' compensation settlements, can reduce your SSDI benefit amount. These are called “offsets.” Most other disability benefits, however, such as veterans benefits or payments made by private insurance, don't affect your SSDI benefit amounts.
Every year, everyone's Social Security benefits are recalculated to adjust to the increasing cost of living. How much of an increase depends on the annual COLA amount for SSDI, which is determined by increases in the Consumer Price Index (CPI).
Updated January 18, 2024
]]>Because Social Security disability is a government program, its features include a good number of qualifying rules and regulations. To receive Social Security disability benefits, all three of the following must be true:
Of course, these terms are subject to different interpretations. There are guidelines developed by Social Security and the courts regarding qualifications for disability. The bottom line is that proving a disability is often a difficult task. In preparing your claim for a disability, examine these guidelines carefully, discuss the matter with your doctor or doctors, and plan your claim accordingly.
The basic rule regarding disability is that the condition preventing you from working must be a medical one, meaning that it can be discovered and described by doctors (Social Security calls this "medically determinable.") To prove you have a medically determinable condition, when you file your disability claim, you should bring records and statements from doctors, or from hospitals or clinics where you have been treated, describing the medical condition that prevents you from working, and exactly how your limitations affect you. The letters should also state that your disability is expected to last for 12 months or to result in your death.
Social Security will first consider whether your condition prevents you from doing the job you had at the time you became disabled, or the last job you had before becoming disabled. If your disability prevents you from performing your usual job, Social Security will next decide whether you are able to do any other kind of substantial gainful work, which is currently defined as any job that pays about $1,500 per month or more.
Your age, education, training, and work experience will be considered in making this determination, as will the practicality of learning new job skills for another work position. Social Security will evaluate whether you are able to perform any kind of work for pay, whether or not there are actually any such jobs available in the area in which you live.
EXAMPLE: Arnold has been a longshoreman for 40 of his 58 years. Weakened by an early injury, Arnold’s back has grown slowly but steadily worse over the past decade, causing him to miss several months of work in the past two years. His doctor has told him that his back will not get better, and Arnold decides to apply for disability benefits.
As Arnold’s back prevents him from standing for long periods of time and restricts the movement of his arms, Social Security determines he is unable to do any physical labor. The next question would be whether he is able to do any other kind of work. It is possible that his back would be too bad for him to do even a job that required him to sit at a desk. If so, and if Arnold proved this to Social Security through his doctor, or Social Security found that because of his age, education, and job skills there were no desk jobs he could learn to do, he would probably get his disability payments.
No matter how serious or completely disabling your illness or injury is, you will not qualify for disability benefits unless your condition has lasted, or is expected to last, for 12 months—during which time you are unable to perform substantial gainful work. The disability will also qualify if it is expected to result in your death. Even though the disability must be expected to last 12 months, you do not have to wait 12 months to apply.
As soon as the condition is disabling and a doctor can predict that it is expected to last a year, you may qualify for disability benefits. And if, after you begin receiving benefits, it turns out that your disability does not last 12 months, Social Security cannot ask for its money back. You are not penalized for recovering sooner than expected, as long as the original expectation that the illness would last 12 months was a legitimate one. Social Security does do continuing disability reviews, however, and can terminate your benefits at a later date.
The amount of your ultimate retirement benefits and your disability benefits is determined by your average income over the years. If, after your disability, you are earning considerably less than you were before, the years of those earnings could pull your average income lower, which could result in a lower ultimate Social Security payment. But if you had a disability that caused you to work for significantly lower wages, the Social Security Administration may put a disability freeze on your earnings record. The disability freeze permits you to work and collect your lower income without having it figured into your lifetime average earnings.
To learn more, see our article on Social Security's disability freeze.
To decide whether you are disabled and able to receive benefits based on that condition, the Social Security Administration uses a step-by-step process involving five questions.
If you are working and your earnings average more than about $1,500 a month—the base amount set by Social Security—you generally cannot be considered disabled.
Your condition must be severe enough that it significantly interferes with basic work-related activities for your claim to be considered. If it only has a minimal effect on your ability to do work-related activities, the Social Security Administration will find that you are not disabled.
The Social Security Administration maintains a list of medical conditions that are so severe they automatically mean that you are disabled (if you match the requirements for the condition). If your condition is not on the list, the Social Security Administration will have to decide if it is of equal severity to a medical condition that is listed. (See www.ssa.gov/disability/professionals/bluebook/AdultListings.htm.) If it is, the Social Security Administration will find that you are disabled.
If your condition is severe but not as severe as a medical condition on the list, then the Social Security Administration must determine if your condition interferes with your ability to do the work you did previously. If it does not, your claim will be denied.
If you cannot do the work you did in the past, the Social Security Administration will see if you are able to do a less physically and/or mentally demanding job. The Social Security Administration considers your medical conditions and your age, education, past work experience, and any transferable skills you may have. If you can't adjust to other work because of your age or other factors, your claim will be approved. If your limitations prevent you from even doing a simple sit-down job, you will be approved. But if you can adjust to other work, and there is other work that fits within your restrictions and limitations, your claim will be denied.
To find out how Social Security evaluates specific illnesses and injuries, see Nolo's section on disability benefits for certain medical conditions.
Updated December 20, 2023
]]>If you earn regular income, you might not be considered disabled any longer, and you could lose your disability eligibility altogether. You are only officially disabled if you are unable to perform "substantial gainful work" (SGA). However, Social Security usually permits you to earn up to $1,470 a month in 2023 ($2,460 if you are blind) before you will be considered to be performing substantial gainful work. But this income limit is not an absolute rule if you own your own business. In that case, other facts may be considered, including your work duties, the number of hours you work, and the extent to which you run or manage your own business. Also, you are entitled to a nine-month trial work period during which you can make over the SGA amount.
In deciding how much you are earning, the Social Security office can deduct from your income the amounts of any disability-related work expenses, such as medical devices or equipment—a wheelchair, for example—attendant care, drugs, or services you require to be able to work.
You are not permitted to collect more than one Social Security benefit at a time. If you are eligible for more than one monthly benefit—disability and early retirement, for example, or disability based on your own work record and also as the disabled spouse of a retired worker—you may receive the higher of the two benefit amounts, but not both.
For the purposes of this rule, though, Supplemental Security Income (SSI)—a program jointly run by federal and state governments to guarantee a minimum income to elderly, blind, and disabled people—is not considered a Social Security benefit. You may collect SSI in addition to a Social Security benefit.
You are permitted to collect Social Security disability payments and, at the same time, private disability payments from an insurance policy or coverage from your employer. You may also receive Department of Veterans Affairs disability benefits at the same time as Social Security disability benefits.
While you may collect workers’ compensation benefits at the same time as Social Security disability benefits, the total of your disability and workers’ compensation payments cannot be greater than 80% of what your average wages were before you became disabled. If they are, your Social Security disability benefits will be reduced to the point where the total of both benefits is 80% of your earnings before you became disabled. If you are still receiving Social Security disability benefits when your workers’ compensation benefits run out, you can again start receiving the full amount of your Social Security benefits.
EXAMPLE: Minnie became disabled while working for the telephone company in the computer analysis department. At that time, she was making $1,400 a month. Her Social Security disability benefits were $560 a month; she also applied for and began receiving workers’ compensation benefits of $625 a month. Because the total of the two benefits was more than 80% of her prior salary (80% of $1,400 is $1,120, and she would be getting $1,185), her disability benefits were reduced by the extra $65 down to $495 per month.
If Minnie is still disabled when her workers’ compensation benefits run out, her Social Security disability benefits will go back up to $560 a month, plus whatever cost of living increases had been granted in the meantime. If Minnie also had private insurance that paid disability benefits, she could receive those benefits as well as all of her Social Security.
To learn more, read Nolo's article on the Social Security disability offset for workers' comp.
A few states, including New York and California, offer temporary disability benefits alongside their unemployment insurance programs. Call your local unemployment insurance office or labor department to determine whether your state maintains this kind of coverage. You can receive state disability insurance payments at the same time as SSDI, but your SSDI may be "offset" by these short-term disability payments. Visit Nolo's section on state disability benefits to see if your state offers them.
After you have been entitled to disability benefits for 24 months, you become eligible for Medicare coverage, even if you are not old enough to be covered by Medicare under the regular rules of the program. (In general, the two-year waiting period is calculated from the date your disability began plus five months—due to the five-month waiting period for Social Security disability.)
Medicare Part A hospitalization coverage is free after you pay a deductible. If you want to be covered by Medicare Part B medical insurance that partially covers doctor bills, lab work, outpatient clinic care, and some drugs and medical supplies, you must pay a monthly premium unless you qualify for a Medicare Savings Program.
]]>Social Security figures your average current earnings in one of three ways:
The High-One formula is used in the vast majority of cases, although Social Security will use whichever method is most favorable to you. However your average earnings are calculated, if your SSDI monthly benefit and your monthly workers' compensation benefit combined are higher than 80% of your average current earnings, the offset will apply.
Social Security's rules regarding the workers' compensation offset allow for various opportunities to minimize the amount of payments subject to the offset. Here are a few of the most common ways to maximize the amount of benefits you can keep.
Before calculating your gross workers' compensation settlement amount, Social Security deducts legal fees, dependent payments, and rehabilitation costs. Past or future medical expenses are also excluded, with the exception of payments made by Medicare. Social Security will require documentation of any expenses you wish to deduct from your workers' comp settlement, so maintain these records carefully.
If you're covered by Medicare and you set aside an unreasonably large amount of your workers' compensation settlement for future medical expenses (using what's called a Medicare Set-Aside), Medicare may be unwilling to pay benefits until you've exhausted those funds.
When a person receives a lump-sum settlement from workers' compensation, an effective strategy for reducing the Social Security offset is to state in the settlement agreement that the lump sum is meant to be spread out over the rest of the individual's life. Often this method greatly decreases the offset or even eliminates it entirely.
Example: If a 45-year-old individual receives a lump sum of $18,000 from workers' compensation, and actuarial tables indicate that he has a life expectancy of 40 more years (or 480 months), Social Security will divide the lump-sum amount by 480 months in figuring the monthly offset. Thus, the individual will be considered to be collecting $375 per month in workers' compensation ($18,000 ÷ 480 months = $375 per month), despite actually receiving the benefits as one lump sum.
If the individual also receives $1,225 in Social Security, for a total of $1,600 per month, his benefits will not be offset unless his average current earnings (discussed above) were under $2,000 per month ($1,600/$2,000 = 80%).
To be eligible to have Social Security consider a lump sum as monthly payments, your worker's compensation settlement agreement must include an "amortization provision." Note that the amortization provision must be included in the original settlement documents. Adding the term to an existing settlement is prohibited and will raise red flags with Social Security; it will be seen as an attempt to circumvent the offset.
At least one federal circuit has ruled that a workers' compensation settlement cannot be spread out over a disability claimant's entire life, but must be limited to the person's working life. To avoid this, many lawyers draft the settlement documents to indicate that the settlement is pro-rated until the claimant reaches full retirement age. Other attorneys have chosen to use annuities in workers' compensation settlements. In this case, because the settlement doesn't provide for an option to take a lump sum, Social Security will use the monthly annuity benefit to compute the workers' compensation offset.
A lump-sum settlement should not be confused with a lump-sum payment of past-due worker's comp benefits. Under a settlement agreement, the worker's comp claimant releases the insurance carrier or employer from liability for future monthly benefit payments and future medical expenses in exchange for a cash settlement, usually in the form of a lump sum.
If you're unable to settle with the insurance company and you proceed to trial, the judge's decision will not provide for lifetime amortization to maximize your benefits. You'll be stuck with the permanent disability rate listed in the award and you won't be able to minimize a Social Security offset this way.
The workers' compensation offset does not apply if you're receiving Social Security retirement benefits. Disability recipients who are approaching age 62 should explore the possibility of filing for early retirement to avoid the workers' compensation offset. Of course, retiring early will provide you with a lower monthly Social Security payment (read Nolo's article on applying for Social Security disability after age 60), so consult an attorney or your local Social Security office to see whether early retirement is worth it.
Social Security's rules regarding the workers' compensation offset can be highly complex and are not applied uniformly from one office to the next. If you were injured at work or have a work-related illness and you're eligible for SSDI benefits and workers' compensation, an experienced disability attorney could save you thousands of dollars by helping you minimize or eliminate the offset.
]]>To gain eligibility for railroad benefits, first you will need to show the U.S. Railroad Retirement Board (RRB) that you have worked for an employer covered by the Railroad Retirement Act. Regulations under the Act broadly define an employer to include carriers who perform any service in transporting property or passengers by the railroad.
Second, you must have worked at least 60 months of service with a railroad employer, or 120 months of service if you worked before 1995. Even if you work for only one day in a month, you would receive credit for that entire month.
The timing of when you can start receiving retirement benefits (described as age and service annuities) is based upon how many years you have worked for the railroad industry. If you have 360 months (30 years) of service, you can retire the first full month you are age 60 without any age reduction in benefit amount. However, if you have 60 to 359 months (5 years to 29 years) of service, your benefits will be reduced if you retire before your full retirement age (FRA). The website rrb.gov has a chart to calculate your FRA.
Generally, the full retirement age has been slowly increasing from age 65 to age 67, depending on the year you were born. As with Social Security benefits, if you delay retirement past your full retirement age, your benefit amount will be increased. The Railroad Retirement Board uses a complex two-tiered system for calculating retirement benefits.
If the covered employee is age 60 and has worked for 30 years, then the spouse can elect to receive a spousal annuity the first full month after the spouse turns age 60. If the covered employee has worked less than 30 years and is at least age 62, then the spouse may receive an annuity the first full month after turning age 62.
Also, if the spouse is caring for a child who is under age 18 or who became disabled before the age of 22, the spouse may receive a spousal annuity at any age, if the covered employee is currently receiving railroad retirement benefits.
Benefits are available for widows and widowers, children under age 18 (or who became disabled before age 22), parents, and other dependents. The covered railroad employee must have worked for at least 10 years for a railroad employer, or 5 years of work performed after the year 1995. In addition, the covered employee must have a “current connection” with railroad employment. The easiest way to meet the regular current connection test is to show the employee had railroad employment in at least 12 of the 30 consecutive months immediately before the employee’s retirement benefits began, or before the month of the employee’s death.
To be eligible for railroad disability benefits, you must have performed at least 120 months (10 years) of railroad employment, or at least 60 months (5 years) of work after the year 1995.
You can receive a disability annuity if you are unable to perform any regular type of job (not just your occupation in the railroad industry). The RRB will want medical evidence showing that your impairment will last for at least one year or is expected to result in death. Proof of your disability can be shown through the use of a functional capacity test or independent case evaluation indicating your ability to stand, walk, lift, crouch, stoop, bend, climb, and kneel.
If you want to appeal a decision by the RRB, you may request a reconsideration from the RRB within 60 days. If you are unhappy with the RRB's reconsideration, you would further appeal to the Bureau of Hearings and Appeals, where you could to present additional evidence to a hearings officer. Next, you could appeal to the three-member Railroad Retirement Board. Lastly, if necessary, you could file an appeal with the appropriate U.S. Court of Appeals.
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