The maximum amount of Social Security Disability (SSD) benefit payments a person can receive is $3,148 in 2021. That’s up from $3,011 in 2020. The formula the Social Security Administration (SSA) uses to determine the amount of your benefit is based on your lifetime average annual earning, not on the severity of your disability.
It might seem that the severity of your disability should be a major factor in the amount of your monthly benefit, especially since some SSD recipients can continue to perform some limited work while still receiving their full benefit, while others are too severely disabled to earn any income. The SSD system was designed to focus on replacing a percentage of the income a worker earned before suffering the disabling impairment. The equation used is applied proportionately across the board, whether you were a high or a low-wage earner.
If you are represented by an experienced Social Security Disability attorney, you can be sure you’re getting credit for every bit of your covered income. Only your “covered” earnings are counted as earned income for the purposes of setting your SSD benefit amount. Those are the wages or income you earned paid Social Security taxes on, usually through employer paycheck withholdings. Self-employed workers have to pay a self-employment tax from their covered earnings. If you earned money “under the table” (off the books), then no Social Security taxes were withheld and those earnings will not be considered in figuring your SSD benefits.
The Formula Determining Your SSD Payment
The formula the SSA uses to set your benefit amount begins with your average amount of covered earnings over several years, called the “average indexed monthly earnings” (AIME). That number is used as a starting point.
Once your AIME is established, then it’s plugged into the following formula for 2021:
- 90% of your first $996 of monthly earnings (AIME) = $896.40
- Plus 32 % of the amount earned between $996 and $6,200
- Plus 15% of the amount earned above $6,200
= Your Primary Insurance Amount (PIA) = Your Benefit Payment
Individual SSD Benefit and Family SSD Benefit
An individual who receives SSD will be able to receive no more than $3,148 in 2021, including the 1.3% cost of living increase. But the average amount of SSD benefit paid in 2021 was $1,277. Most recipients’ benefits are between $800 and $1,800 per month.
In some circumstances, family members of an SSD benefit recipient are eligible for payments in addition to the disabled person’s check. The maximum amount of SSD benefits a family may receive is 85% of the worker’s average indexed monthly earnings (AIME) but never more than 150% of the worker’s primary insurance amount (PIA). Generally, family SSD benefits are reserved for those with one or more minor children, or a disabled child, or a spouse over the age of 62.
Other Benefits May Increase or Decrease Your SSD Benefit Payment
Your federal SSD benefit payment can be affected by your receiving other government benefits. For example, if you receive worker’s compensation or state temporary disability payments, your SSD benefit may be reduced. The benefit cap is 80% of the average amount you earned before you suffered your disability.
But, if you are receiving VA benefits or Supplement Security Income (SSI), those benefits will not reduce your SSD benefit payment.
Remember that you can still apply for and receive SSD benefits while you are receiving worker’s compensation. The limit is that the combined benefit cannot exceed the cap of 80% of your average monthly income.
However, if you have a private disability insurance policy, you can collect both without jeopardizing or reducing your SSD benefits. The exact terms of your private disability policy can vary from company to company. Some private policies will include an SSD offset clause that will reduce your private insurance benefit by the amount of your SSD benefits. It will still pay you up to the full amount of the policy, but since it is reducing its risk by an amount equal to your SSD benefit, you should pay a lower premium for the coverage.
The Law Office of Attorney Daniel Berger and nydisability.com can guide you through the process of applying for and winning SSD benefits. Attorney Berger’s experience and expertise in Social Security Disability law will guarantee your SSD claim is prepared expertly, reviewed thoroughly, and defended vigorously. The nydisability.com team at the Law Office of Attorney Daniel Berger concentrates their professional lives and energy exclusively on winning Social Security Disability and Supplement Security Income benefits for their clients. You should get the best SSD attorney to prepare and represent your claim. We know you are important to your family.