An illness, injury or other medical condition preventing you from working and earning a living creates financial hardships. Disability benefit programs through the Social Security Administration provide much-needed financial relief through monthly cash payments and other Social Security disability benefits for those meeting the qualifying standards.
When you depend on your SSD benefits to pay for food and shelter, you want to know that you get the right amount of calculated SSD benefits. Using London Disability to file an application for SSD benefits means that the accuracy of the benefits awarded is checked by an experienced disability advocate to ensure that you get the benefits you are entitled to under the law. The following information offers a better understanding of the process SSA uses to calculate benefits through its Social Security Disability Insurance or Supplemental Security Income programs.
How do they calculate benefits through the SSI program?
If you meet the definition used by the SSA for being disabled or blind, you may qualify for SSI benefits. You cannot have resources or assets valued at more than $2,000 for an individual and $3,000 for a couple. Speak with an SSI advocate about the resource limitations because some assets may be excluded from the value limits.
For example, the value of a home you own and rent out to a tenant would be included in the $2,000 or $3,000 resource limit. The same home would be an excluded asset if, instead of renting it to a tenant, you lived in it as your primary residence.
The monthly federal benefit payable to an individual through SSI is $794 in 2021. It is $1,191 for married couples where both spouses qualify for SSI. You may live in a state that supplements the federal benefit.
The federal benefit that you actually receive may be less than $794 a month or $1,191 as a couple based on income that you receive from sources other than SSI. For example, interest income or earnings from work may reduce what you receive each month from SSI.
To calculate your monthly SSI benefit, you must deduct the income you have for the month from the federal benefit. However, Social Security does not count all income. The following are some of the exclusions SSI allows from monthly income:
1). $20 of monthly earned or unearned income
2). The first $65 of monthly earned income and one-half of the balance.
3). Students younger than 22 years of age may exclude up to $1,930 from their countable monthly income up to an annual maximum of $7,770.
To get a better understanding of how all of this works when calculating your monthly SSI benefit, assume that you qualify for SSI and also receive $585 a month working at a job. You start by deducting $65 from the $585 that you earned, which leaves a balance of $520. You may exclude one-half of the $560 leaving a balance of $260. As long as you did not have other income, deduct another $20 from the $260. That leaves you with $240 countable income to deduct from the $794 federal benefit, which makes your SSI monthly payment $554.
Calculating SSDI benefits
The SSI program bases its qualifying standards and monthly benefits on financial need. SSDI stands in sharp contrast by basing eligibility for benefits on your record of employment or self-employment and payment of Social Security taxes on the income you had over the years.
You need to have a minimum amount of time that you worked and paid into the Social Security system to qualify for benefits, but the longer you worked, the higher the monthly benefit you are entitled to receive when you retire or become disabled. Instead of a set monthly payment that applies to all recipients that are used to calculate SSI benefits, SSDI bases your monthly benefit on your average indexed earnings for up to 35 years of working and paying into the Social Security system.
The formula used by the Social Security Administration to calculate monthly SSDI payments does not take into consideration either how long you have been disabled or the severity of your medical condition. As an oversimplification of a complex formula and calculation process, it comes down to the amount of income you had during your working years and the taxes that you paid on it determining the monthly SSDI payments.
As a general rule, you receive the full monthly SSDI payment regardless of other income that you receive except when the other source of income is workers’ compensation or state-administered disability benefits. Your SSDI and workers’ compensation or disability benefits may not exceed 80% of your pre-disability average earnings. Veterans Administration and SSI benefits do not reduce your SSDI payments.
Learning more about how to calculate SSD payments
The Social Security disability advocates at London Disability want to help you understand your SSDI and SSI benefits. Contact us today for a free consultation.