At Acadia Law Group, we receive many questions regarding Social Security Disability benefit payments, amounts, and situations that could affect monthly benefit amounts. Calculating a disability payment can become rather complicated, but understanding the fundamental principles will help you understand the payment process and the provide you with the ability to estimate your payments.
Frequently Asked Questions About Social Security Disability Payments
- What are Social Security Disability Benefits?
- What’s the minimum Social Security Disability payment?
- How do I receive my Social Security Disability Benefit payments?
- Do Social Security Disability payments ever increase?
- What can decrease the amount of my Social Security Disability payments?
- Are Social Security Disability payments taxable?
- Can Social Security Disability payments be garnished?
- Can the IRS garnish Social Security Disability payments for past due taxes?
- Social Security Disability back payments and retroactive payments
- How to calculate Social Security Disability payments
- Are Social Security Disability payments considered inheritance?
- Do my child support payments affect my Social Security Disability?
- Supplemental Security Income payments – Does each state have a different amount?
- How long can I receive Social Security Disability payments?
In this article, we’ll go over the most common questions we received regarding Social Security Disability payments. Once you understand the process of receiving payments and how they are calculated, you’ll discover the process is not as complicated as you may have thought.
What are Social Security Disability Benefits?
Social Security Disability Benefits is a program designed to help you and your family if you can’t return to work because of a medical condition. Social Security is similar to an insurance plan, only your “premiums” are paid through payroll taxes. While many employees resent paying FICA taxes (retirement seems so far off into the future), they may end up needing Disability Benefits long before reaching retirement age.
The requirements to be eligible for Social Security Disability Insurance (SSDI) are very strict. First, you must have worked long enough to be “fully insured,” and second, you must have a medical condition that prevents you from performing any work for which you’re qualified for at least 12 continuous months or that is expected to result in death.
What is the minimum Social Security Disability payment?
There’s not a “minimum” Social Security Disability Payment. Payment amounts are based on your average lifetime earnings. The average monthly benefit is low and likely will cover only the basic needs of a family. You may also be eligible for Supplemental Security Income Benefits if your benefits are below a certain amount, which varies by state.
How do I receive my Social Security Disability payments?
The Social Security Administration (SSA) requires that disability benefit payments are sent electronically to your financial institution, which can be a bank, credit union, trust company, or savings and loan.
Do Social Security Disability payments ever increase?
Social Security Disability payments can increase through an annual Cost of Living Adjustment. The Federal benefit amount is based on the Consumer Price Index and when the cost of living rises, Social Security and SSI payments increase.
If you return to work while still receiving disability payments, through SSA’s Ticket to Work, Trial Work Period, or Extended Period of Eligibility programs, and have to stop working due to your medical condition, your benefit amount may increase based on your additional earnings.
What can decrease the amount of my Social Security Disability payments?
Your Social Security Disability Benefits may be decreased if you receive workers’ compensation or other public disability payments.
Be sure to let SSA know if you are receiving workers’ compensation, short or long-term disability payments, or if you may receive a settlement for these programs.
Also, if you worked for an organization that was not required to pay Social Security taxes, for instance, Civil Service, or a state or county government agency, your benefit amount may not include those wages. On the other hand, you may be eligible for disability if you worked long enough to be vested in those plans.
Our experts at Acadia Law Group can help you contact workers compensation or other public agencies and even past employers to see if you are eligible for disability under a different program.
Are Social Security Disability payments taxable?
Yes, Social Security Disability payments are taxable. You may not have to pay taxes on your benefit payments, however, depending on the total amount of your income and benefits. You’ll receive an SSA-1099 at the end of the tax year with the net amount of your Social Security benefit payments. In 2018, if you’re single, head of household, or a qualifying widow, $25,000 of your Social Security benefits is not taxed ($32,000 for married filing jointly). You and your spouse have to combine your incomes and disability benefits when calculating the taxable portions.
Supplemental Security Income payments are not taxable.
Can Social Security Disability payments be garnished?
Yes and no. Your Social Security Disability payments can be garnished by the Federal government to recover past-due taxes, federally guaranteed student loans, child support, and alimony. Creditors, other than the Federal government, are generally barred from garnishing Social Security Disability payments.
Can the IRS garnish Social Security Disability payments for past due taxes?
Yes. As part of the Federal government, the IRS has the authority to garnish your Social Security Disability payments to recover past-due taxes.
Social Security Disability back payments and retroactive payments
When filing for Social Security Disability Insurance (SSDI), one of the questions you must answer is when you became unable to work. That date becomes your “Alleged Onset Date” and, if your claim for SSDI is approved, converts to “Established Onset Date.”
SSDI Benefit payments begin five months after the Established Onset Date. If your EOD is January 15, your benefits would begin in July (January 15 to June 15 is five months, so your first payment would be at the beginning of July). However, payments are made one month after they’re due. So, you would receive your first monthly payment in August.
While this “waiting period” sounds painful, the fact is that making a disability decision is a process that usually takes SSA many months to complete. In addition, you likely waited a period of time after your Alleged Onset Date to file your application for SSDI. So, most of the time, claimants receive several months of past-due benefits once their claim is approved.
Supplemental Security Income (SSI) Benefits do not have a waiting period and payments begin immediately.
Our team of experts at Acadia Law Group can help you file your application, pinpoint your Alleged Onset Date, and calculate your past-due benefit months and amounts
How to calculate Social Security Disability payments
Let’s begin by saying that calculating monthly Social Security Disability payments is very complex. Social Security Disability Payments are based on your average wages over your entire work life where Social Security taxes were paid. These earnings are called “Average Indexed Monthly Earnings” or AIME. The Primary Insurance Amount or PIA is the maximum SSDI payment you can receive and is the sum of these figures (using 2017 dollar amounts):
- 90% of AIME under $885
- 32% of AIME between $885 and $5336
- 15% of AIME over $5336
For example, let’s consider AIME of $2,500.
- 90% of AIME under $885 =$796.50
- 32% of AIME between $2500 (based on lifetime earnings) and $885.
$2500 minus $885 = $1615 x 32% = $516.80
- 15% of AIME over $5336 = 0 (AIME was $2500)
Sum: 796.50 + 516.80 = $1313.30 Monthly SSDI Benefit
Supplemental Security Income payments are based on a Federal Benefit Rate that changes according to the cost of living and inflation. The FBR is the maximum amount of SSI benefits an individual may receive each month. SSI recipients must reveal all income and resources, not only for themselves but for all other people in their household.
Are Social Security Disability payments considered inheritance?
Social Security regulations state who can receive any payments due prior to the death of a beneficiary. Social Security Benefits cease when the beneficiary dies.
The Order of Payment for Underpayment of Social Security Benefits is as follows:
- Widow or widower if they lived in the same household as the beneficiary or, if not, if they were entitled to a monthly benefit on the deceased wage earner’s account at the time of death;
- Child or children, if they were eligible to receive benefits on the earnings record of the deceased beneficiary;
- Parent or Parents, if eligible to receive benefits on the deceased wage earner’s account;
- A widow or widower who doesn’t meet the requirements above;
- A child or children not meeting the requirements above;
- Parents who don’t meet the requirements above; and
- The legal representative of the underpaid person’s estate.
Do my child support payments affect my Social Security Disability?
Child support payments will not affect your Social Security Disability benefits. However, your children will be eligible for benefit payments as long as they aren’t married and are under 18 years old or 18-19 years old and a full-time high school student.
If you’re eligible for Supplemental Security Income payments, a portion of the child support payments you receive may be counted as unearned income.
Supplemental Security Income payments – Does each state have a different amount?
Supplemental Security Income (SSI) payments amounts are based on the Federal Benefit Rate or FBR. The FBR is the maximum amount the Federal Government will pay SSI recipients each month. Some states pay additional rates to SSI payments each month.
When can I expect to receive my Social Security Disability payment?
SSI payments are sent on the 1st day of the month, and if you receive both SSDI and SSI payments, your SSDI will arrive on the 3rd. Otherwise, payments are sent on the following schedule:
- If your birthday is between the 1st and 10th of the month, your benefit is paid on the 2nd Wednesday;
- If your birthday is on the 11th through the 20th, your benefit will be paid on the 3rd Wednesday;
- If your birthday is on the 21st through the 31st, your SSDI benefits will arrive on the 4th Wednesday of the month.
How long can I receive Social Security Disability payments?
As long as your medical impairment continues to prevent you from returning to work, you’ll continue to receive Social Security Disability Insurance benefits.
The Social Security Administration will re-evaluate your medical condition periodically, usually every three years. You’ll receive a notice that your disability will be reviewed along with forms to complete showing your doctors names and addresses and the treatment you’ve received, any hospitalizations, any counseling sessions, along with questionnaires about your disability and how it affects your day-to-day activities. It’s vital that you complete the forms and return them to SSA, and attend any medical examinations scheduled for you. Your benefits could be ceased if you don’t cooperate.
At Acadia Law Group, we take pride in our expert staff members who can assist you in filing an application for Social Security Disability Insurance and Supplemental Security Income, as well as filing an appeal if your disability claim has been denied.
Even once a disability claim is approved, there are still complex rules. Our entire staff is knowledgeable about Social Security Regulations and Policies, and we can help guide you through the confusing process of filing Disability applications and appeals. Contact us today for assistance with your Social Security benefits.