Will SSDI Replace the Work-Related Income I Lost?
If you suffer from a significant disability and health impairments that keep you from obtaining substantial gainful activity (SGA), the issue of Social Security Disability Insurance (SSDI) becomes important. While SSDI funds are helpful when you need them the most, in most cases, SSDI cannot replace your work-related income. An experienced SSDI attorney will let you know that the monthly payout will depend on your Primary Insurance Amount (PIA).
What is Primary Insurance Amount (PIA)?
The Social Security Administration (SSA) administers two federal entitlement programs to provide financial support to individuals with long-term and severe disabilities – Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI).
SSDI is authorized under Title II of the act and is a work-related social insurance program. It provides monthly cash payouts to disabled workers and any eligible dependent under the age of 60. With that said, the workers should have accumulated enough earning credits during their careers and paid Social Security taxes.
The Primary Insurance Amount is the amount paid to a worker at their normal retirement age of 66. This is usually a sum of three different portioned percentages of average indexed monthly earnings. The formula used by an administration for calculating benefits is complicated. You should speak with an experienced SSDI attorney to learn more.
The formula for calculating SSDI benefits is complex. Additionally, they won’t cover the entire work-related income you lost because of your disability. The Social Security Administration is responsible for calculating your PIA for you. The disability insurance program is only meant to support you financially. The PIA will reflect your earnings history from before, but it won’t replace the income you receive completely.
How Much Monthly Payment Amounts can I Receive through SSDI?
The benefits you receive through SSDI hinge directly on whether you paid Social Security taxes before you became disabled or not. A portion of the taxes paid are deposited in the Social Security trust. This percentage of your annual income is used for funding retirement, disability, and other benefit programs.
Even if you were in the high-income bracket, there is an established maximum payout that can be made through SSDI. Your monthly benefits don’t necessarily need to equal your income before the disability. The SSDI amount may be close to the pre-disability income amount for most low-income individuals.
Moreover, this is not the case with workers in the middle and high earnings groups. In most cases, SSDI benefits will fall short of their income before the disability.
SSDI and Federal Benefit Rate (FBR)
Federal Benefit Rate or FBR is the maximum payment amount that can be paid as SSDI benefits. This amount changes every year after factoring in inflation and other things. The FBR for SSDI in 2023 is set at $3,627. This SSDI payment amount you receive will be determined by your average lifetime earnings. In general, the average monthly SSDI payment amount is $1,350.
You may receive more or less payment depending on your average lifetime income or work history. You may be considered disabled for SSI and SSDI eligibility if you are unable to engage in SGA or substantial gainful activity. You would need to prove that you have a medically determinable mental or physical impairment that has lasted for at least 12 months and may lead to death.
Benefits Under Supplemental Security Income
Supplemental Security Income is authorized under Title XVI of the act as a need-based public assistance program. It provides monthly payouts to disabled, blind, and aged individuals. SSI is not just for workers that got disabled but also for blind and disabled children with limited assets and no other income.
Benefits are limited under Supplemental Security Income as well. The Federal Benefit Rate levied on SSI is similar to SSDI. In 2023, individuals cannot receive more than $750 per month. In the case of married couples where both partners receive SSI, the cumulative monthly benefit cannot exceed $1,125.
On top of this, due to the way the Social Security Administration works and calculates the payouts, almost no individual receiving Supplemental Security Income is ever eligible for the maximum payout. The Administration considers all forms of financial and income resources. If you do qualify for SSI benefits, it may be substantially less than the maximum available payout.
Difference Between Retirement & Disability Benefit Payouts
Retirement and disability benefits are calculated differently by the Social Security Administration. Furthermore, the amount you receive as retirement benefits will almost always be the same as the amount you were receiving as disability benefits. The fact that disabled workers are unable to work for as many years as other regular workers may bring down the retirement benefit received.
If you are receiving disability benefits by the time you attain retirement age, your benefits will automatically get converted to retirement benefits. The Social Security Disability program is an essential lifeline for disabled workers. You should consult with a reputable Social Security attorney to help with your claim.
Get a Knowledgeable SSDI Attorney on Your Side to Protect Your Rights
The Social Security Disability attorneys at Walton Law LLC can help determine the amount of money you will be eligible for under SSDI and pursue a strong claim on your behalf. Our attorneys will explain to you every aspect of your work-related income and provide the right legal advice. Schedule your free and confidential consultation with us today. Call 251-455-5819 or write to us online.
