Realizing that you’ve become disabled to the point where you are no longer able to work can be frightening and stressful. Suddenly you have to balance the costs of normal life with the increased costs of healthcare, but you may not have the income to pay for it. Fortunately, there are resources available for many of those who find themselves unable to work. Social security disability income is one of those resources.
Qualifying Conditions
Not just anyone will qualify for Social Security Disability Income (SSDI). You must have a condition that prevents you from working, and you must meet the Social Security Administration’s definition of being disabled. There are many conditions listed in the Social Security disability blue book that are likely to qualify for disability benefits. Some of these conditions include cancer, some mental disorders, musculoskeletal or cardiovascular disorders, and neurological or respiratory disorders, among others. The conditions listed in the book are far from exclusive. Other conditions may qualify you for assistance, depending on individual factors. On the other hand, having one of the listed conditions is also not a guarantee that your application will be approved. If you are approved, you can start receiving benefits.
Average Indexed Monthly Earnings
Calculating how much you’ll be receiving each month in benefits can be a little complicated. There are benefit prediction calculators that can help you get an idea for what to expect. Keep in mind that all they can do is give you a ballpark answer. The actual amount you receive may be different. Your monthly benefits are based on yoru average indexed monthly earnings (AIME), which is the average amount of income you’ve received over a set period of time. For income to count towards this, it must come from jobs from which you’ve paid into Social Security. Your benefits are calculated by putting your AIME through a formula. The formula is calculated using fixed percentages of portions of your income, though those portions may be adjusted from year to year. In 2020, the formula calculated 90% of your AIME’s first $960, 32% of your income between $960 and $5,785, and 15% of anything over $5,785. The resulting number would be your primary insurance amount, which Social Security then uses to determine what you would receive in benefits.
Payments That Reduce Your Benefits
Just because you qualify for a certain amount based on your AIME doesn’t mean that’s what you’re going to receive. If you are receiving other benefits, the amount of disability income you receive will likely be reduced. Workers compensation, state funded temporary disability benefits, military disability benefits, and disability-based state or local government retirement benefits are all examples of other disability benefits that will reduce the amount of social security disability income that you are entitled to.
Income That Doesn’t Reduce Your Benefits
Other sources of income don’t have an impact on the amount of SSDI income you receive. Private sources, such as private long-term disability insurance, don’t reduce the amount of benefits you receive. Public benefits such as Supplemental Security Income or Veterans Affairs benefits are the exception to the rule that public disability benefits reduce your SSDI benefits. Additionally, there is no limit on the amount of unearned income to qualify for SSDI benefits. As a result, you can still earn income from investments, gifts, inheritances, or interest.
Another thing you should keep in mind is that you technically can still work while receiving benefits. This income doesn’t take away from your disability benefits. It can complicate things a little though. Working part time can make it harder to prove that you are unable to work full time. Since one of the qualifying factors for receiving SSDI is that you are unable to participate in full time work, earning above the substantial gainful activity (SGA) threshold will disqualify you from receiving benefits. This threshold for 2021 is an average monthly income of $1,310 or more.
Receiving Back Pay
Social Security disability claims can take a long time to process. As a result, if your claim is approved, you’ll have been entitled to your SSDI benefits for some time before you actually start receiving those payments. This means you should receive back pay to make up for the missed payments. How much back pay you receive will depend on your monthly benefit, when you filed your claim, and when you became disabled. Because of this, it’s important to file your claim as soon as you can after becoming disabled. Keep in mind that there is a five-month waiting period that is taken away from the beginning of their disability benefits. The clock starts from the established onset of your disability. Any time after that and before you start receiving regular benefits is time you’ll be entitled to receive back pay for.
There is a lot that goes into calculating how much you are entitled to receive for disability benefits. You’ll have to meet the qualifying conditions to start. From there, your average earnings prior to becoming disabled, other sources of disability benefits and income, and the potential for back pay will all impact how much you will receive. Don’t delay filing a claim to start receiving additional income to support you through your disability.