The maximum Social Security Disability Insurance (SSDI) benefit in 2023 is $3,627 monthly. Although it is a great amount, not everyone will receive it. In reality, the average SSDI payment amount is $1,358.
Finding your primary insurance amount (PIA), based on the amount of Social Security contributions you have from prior wage withholdings, is necessary to determine how much you will get. The SSDI benefits amount is based on your PIA and averaged indexed monthly earnings (AIME), not a fixed amount.
The process includes dividing your indexed salaries into three slices and applying various percentages to each slice, considering up to 35 of your highest-earning years. This formula ultimately determines your monthly SSDI benefit.
So, what amount should you anticipate? Let’s go over the calculation step by step. We will explore how the SSA calculates and determines your SSDI amount below.
The Quickest Method for Determining Your SSDI Payment
Before we dive into the numbers, there is a quick and simple way to figure out how much SSDI you will receive without using a calculator. The SSA will specify exactly how much money you can anticipate receiving from SSDI each month when you open a free mySocialSecurity account.
Setting up your account is not very time-consuming; it takes approximately 15-20 minutes, and you must enter your data and, in some instances, employ face recognition, which requires a camera, to prove your identity. Your information is safe, and it is entirely free.
You may view your employment history, the number of work credits, and the status of your retirement benefits with an SSA account. You can also fix any mistakes on your record if they exist to possibly boost your SSDI benefits.
Pay Chart for Social Security Disability Benefits in 2023
Federal benefit rates fluctuate along with living expenses. The SSA calculates wage increases using the Consumer Price Index for Urban Wage Earners and Clerical Workers(CPI-W) from the Department of Labor. The cost of living adjustment (COLA) can help partially offset these expenses once a year. You can find more information about increased benefit payment amounts by visiting the SSA’s website when the new year starts.
The amount of Supplemental Security Income payments rises each year along with COLA increases. The SSDI benefits compensation table for 2023 states:
- The annual amounts for those who qualify in 2022 and 2023 are $10,092.40 and $10,970.44, respectively. The qualified individual’s monthly payment in 2023 will be $914.
- For qualified couples, the annual sum in 2022 is $15,136.93; in 2023, it is $16,453.84. For couples that qualify, the monthly payment in 2023 is $1,371.
- The essential person yearly payment for 2022 is $5,057.77, and the essential person yearly payment for 2023 is $5,497.80. The essential person’s monthly payment in 2023 is around $458.
How Is SSDI Determined?
The SSA determines your average indexed monthly earnings (AIME) as the first step. Your AIME is determined by your earnings and the Social Security taxes you paid while employed.
Using your AIME, the SSA can calculate your primary insurance amount (PIA). Your PIA determines the amount of your compensation.
Determining Your AIME
The SSA indexes your wages before computing your average monthly indexed earnings. It implies that they are modified to account for changes in living costs over time. The SSA examines up to 35 years of your earnings, but due to inflation, earning a hundred dollars 20 years ago is worth more than $100 today.
The SSA will then take the maximum 35 years of your employment history and average your indexed earnings.
The SSA selects your highest-earning years, which is good news. Therefore, if you worked and contributed to Social Security for 40 years, they will determine your AIME based on the 35 years your wages were the highest.
Your primary insurance amount is calculated after it arrives at your AIME.
Determining Your PIA
Your AIME is divided into three slices, each representing your primary insurance amount. Your first $1,115 in earnings is covered by the first slice in 2023. The second ranges from $1,115 to $6,721 in earnings.
Earnings beyond $6,721 are accounted for in the third slice. The dollar thresholds for those pieces often rise each year.
Your monthly SSDI benefit amount for 2023 would be calculated according to the following PIA formula:
- 90% of the first slice—your first $1,115 of AIME
- 32% of the second slice—any AIME between $1,116 and $6,721.
- 15% of the third slice, plus any AIME over $6,721, is added.
To the subsequent-lowest $0.10 multiple, the SSA rounds up. Your benefits check would be adjusted to $1,358.30 if your PIA computation equals $1,358.32.
SSDI Calculation Example
Let’s look at a more challenging example. Suppose the SSA determined that your typical monthly indexed earnings were $5,000. By slicing that up, you can determine how much your SSDI payout will be:
- 90% of the first $1,115, which equals $1,003.50
- Your $5,000 AIME less the $1,115 in the first slice, or 32% of $3,885, equals $1,243.20.
- Your AIME was less than $6,721, so the 15% slice is not applicable.
Ways To Calculate PIA
There are several ways to learn what your PIA is:
- SSA’s online benefits calculator
- Contacting your local SSA office
- Sign up for a myssa.com account
- Call the National SSA 1800 helpline at 1-800-772-1213 or your local SSA office
It is important to understand that your monthly disability payment is not determined by the time you have been unable to work due to a disability.
It is also not based on your diagnosis or how serious the disability is. Instead, the amount of your disability insurance benefits is determined by the history of your income that was subject to tax and Social Security contributions.
Increasing Your SSDI Benefit
Unfortunately, the only option to raise your SSDI payment is to raise your AIME, which would mean working for at least a year at a higher salary to be considered when calculating your average earnings. It is probably not realistic for you to apply for disability if you are considering getting a higher paying job before applying for SSDI benefits.
However, you can take measures to ensure you receive as much as possible. Examine your earnings history on your mySocialSecurity account. Your AIME and SSDI payments would go up if the SSA updated any misreported years or years missing from your record.
Income Sources That Reduce Your SSDI Benefit
Although most individuals will not have to worry about it, some sources of income could lower your SSDI check.
Employee Compensation
On a worker’s compensation claim, SSDI eligibility should be considered. Your combined SSDI and workers’ compensation benefits cannot exceed 80% of your prior income. The SSA will, therefore, deduct SSDI benefits from your benefits under workers’ compensation if you are eligible for both.
State Benefits for Disability
Only Hawaii, New York, New Jersey, Rhode Island, and California provide State Disability Insurance (SDI) programs, which provide short-term Disability Insurance. While you receive the state funds, you can continue getting SSDI, but your SSDI payout will decrease.
Other State Pensions
For instance, if you contribute to a state pension rather than Social Security, it may lower the amount of SSDI benefits you are eligible for.
Causes behind the Reduction of Monthly Social Security Benefits
There are a few typical explanations for why you might be receiving less than you anticipated from your Social Security benefits if you just started receiving them:
Your Social Security Check Was Reduced due to Offsets
An offset is one circumstance that might lead to reduced Social Security benefits. When someone to whom you owe an amount of money appeals against your benefits, that is when it happens. The following are some examples of debts that could be offset:
- Student loan defaults
- Unpaid child support or alimony requirements
- Back taxes
The initial $750 in benefits you get are protected by SSA laws. However, suppose it is found that a debt does belong to you. In that case, the SSA will deduct a specific amount from your monthly benefits until the obligation is paid off.
You will get your entire benefit amount after the debt offset is satisfied. You must manage the temporary gap in the meantime.
Your Social Security Check Was Reduced Due to Early Benefits
Based on the year you were born, the maximum age to retire for Social Security benefits is 66 or 67 for most people retiring today. However, you can start receiving Social Security retirement benefits at age 62.
A cost is associated with receiving Social Security benefits at an earlier age since there will be a decrease in the amount of benefits you receive, even though it may provide some financial relief if you are in a tight spot.
Changes in SSDI Payments
Your SSDI payments will probably increase due to COLA every year. The SSA uses a cost of living adjustment to update SSDI payments annually. Most people’s benefits increased by 8.7% as a result of the 2023 COLA. To see that increase, nothing on your end is required.
After the annual COLA, your regular SSDI payment schedule is unaffected by the yearly increases as well.
SSDI Back Pay Calculation
The SSDI application procedure takes a while, but you are compensated for the time you wait for a response to your claim. The amount of the back pay is the same each month.
The only distinction is that you receive a lump sum payment for the whole period you were waiting for a decision (minus the five-month waiting period before you become entitled to benefits).
Receiving SSDI and SSI simultaneously
In some circumstances, there is indeed the possibility of receiving SSDI and SSI payments at the same time. A person eligible for SSDI often gets a large enough payment that it may disqualify them from SSI.
How To Get SSDI and Receive Benefits
SSDI gives a decent monthly payment, but the application and approval processes are not simple or quick. Prepare yourself for the lengthy application process. Most candidates must go through a few rounds of appeals, and some may need to reapply.
You don’t have to go through it alone. Having a disability attorney on your side may increase your chances of success by three times.
When Does a Person Start Getting Social Security Benefits?
A SSDI application is typically handled in three to five months, but if your claim is refused, you might have to appeal and wait even longer. According to statistics, first-time claims have a denial rate of over 65%, which suggests that the claims procedure would most likely take months to over a year to complete.
However, by enlisting the aid of a knowledgeable Social Security benefits attorney, the likelihood of an incorrect denial can be greatly decreased.
Causes of a Delayed Social Security Payment
Additional elements that may cause an SSDI judgment to be delayed include the following:
The Type of Illness
The SSA has a list of medical illnesses that are deemed severe by default because of their nature.
An individual decision must be made to determine if an injury or condition can be considered a disability if it is not included in the Blue Book.
Doctor’s Responding Time to Medical Records and Documentation Requests
To substantiate a disability claim, a doctor may need to offer statements and medical data. Facts and documents about medical history must support all SSDI applications.
The claim acceptance or denial may be postponed if a doctor refuses to supply the SSA with the information it wants or fails to provide documentation of a patient’s diagnosis.
Determine If a Medical Exam Is Required to Support a Disability Claim
Before determining whether an application qualifies for benefits, the SSA requests that some applicants undergo particular medical examinations or testing. In certain situations, delaying a decision while awaiting an appointment or test results is possible.
Suppose a randomly chosen application has been chosen for a quality control evaluation. The SSA conducts a Disability Quality Branch review to ensure examiners adhere to policies and procedures when deciding whether to approve or refuse SSDI claims.
The SSA conducts a secondary evaluation that can take a few weeks to several months on cases that have been processed or are currently being examined occasionally and randomly.
Final Thoughts
In conclusion, calculating SSDI benefit amounts is a complicated process that considers several variables. The SSDI payment is based on your PIA and AIME, not a fixed amount.
The process includes dividing your indexed salaries into three slices and applying various percentages to each slice, considering up to 35 of your highest-earning years.
The SSA offers tools like online benefit calculators and account services to help you understand and access your anticipated payment amount, even though the computation procedure may appear complicated.
