Is SSDI More Than Regular Social Security Payments?

Many people applying for Social Security Disability Insurance (SSDI) benefits wonder what their other options are. It can be helpful to make a comparison between SSDI and other Social Security Payments such as Supplemental Security Income (SSI). So, does SSDI pay more than other regular Social Security Payments?

Yes, it does. When you compare the payments from SSDI and SSI, you’ll find that SSDI pays more than the latter. SSDI with its payment cap of $3,627 pays more than twice as much as SSI with its payment cap of $914.

Keep reading below for a more thorough comparison of SSDI and regular Social Security payments.

What Are Social Security Disability Benefits?

Payroll taxes paid into the Social Security system for retirement, spousal, and survivor benefits, as well as disability payments, are funded by the Federal Insurance Contributions Act (FICA).

A portion of these funds are deposited into the Disability Insurance (DI) Trust Fund, which in turn is used to pay benefits to disabled individuals.

Social Security’s website states that to be eligible for disability benefits, you must have worked for a specified number of years in Social Security-covered employment. 

In most cases, you’ll need 40 credits; 10 of those must have been acquired in the twelve months before your disability began. You also need to have a medical condition that fits the criteria for being considered disabled by Social Security.

SSDI is not to be confused with SSI, which provides payments to low-income individuals irrespective of their work history. Although the two sound identical, there are significant differences in who is eligible to receive payments under each and what kind of assistance is available.

How to Calculate Your Social Security Benefit

Both the method for calculating your Social Security payments and the formula for calculating your disability benefits are precisely the same up until the very last step.

The first thing to do is determine your AIME, which is your average indexed monthly earnings. Your highest 35 years of earnings will be considered by the Social Security Administration (SSA). 

Income is indexed for inflation and included up to the taxable limit (the point at which Social Security taxes are no longer required) for each of those years. This figure is $160,200 for the 2023 tax year.

The Social Security Administration will then take this total and divide it to determine your AIME. Your lowest-earning years will be disregarded if you have more than 35 years of total earning experience. 

If you have fewer than 35 years of earnings, the Social Security Administration will add in $0 for each year that you are short in the computation of your benefit.

Finally, use the AIME to determine your primary insurance amount (PIA). The Social Security Administration will use a percentage of your AIME split into three parts to determine your PIA. 

Depending on the year in which you reach retirement age or become disabled, the exact amount of these benefits will change. Add it all together, and that’s your primary insurance amount.

Comparing SSDI and SSI

Although each of these programs is handled by the Social Security Administration, they have quite distinct financial criteria.

Criteria

The Supplemental Security Income (SSI) program is a need-based program.

Those who are elderly, blind, or disabled and have trouble meeting their basic needs due to a lack of income may be eligible for Supplemental Security Income. 

Because of the specific nature of this program, its participants must meet rigorous financial criteria. This is why the benefit is sometimes called a “means-tested” benefit.

Social Security Disability Insurance is a criteria-based program.

Social Security Disability Insurance is an entitlement program to which all workers who have contributed to Social Security for at least 10 years are entitled, regardless of their present earnings or wealth. 

Younger beneficiaries, as well as disabled adult children of workers who have retired or passed away, may be subject to different standards.

Even those with high incomes may be eligible for SSDI, provided they meet the program’s other requirements.

Medicare

The vast majority of states automatically enroll SSI recipients in Medicaid.

Medicaid is a program run jointly by the federal government and the states, and it is known for providing extremely extensive coverage to those eligible for the program. Thus, SSI health coverage may be the deciding factor for many applicants.

However, Medicare coverage can begin for those receiving Social Security Disability Insurance benefits two years after they first become eligible. Medicare is a government health insurance program that pays for many outpatient services and some inpatient services at hospitals.

Medicare’s gaps in coverage are greater than those of Medicaid. Many people who are eligible for Medicare supplement their benefits by purchasing private “Medigap” policies.

Does SSDI Pay More than Other Social Security Payments?

Let’s go through a breakdown of how much you may expect to get from each of the Social Security Administration’s disability programs. Social Security Disability Insurance and Supplemental Security Income are two such programs. 

Social Security Disability Insurance payments are intended for disabled individuals who need financial help. In contrast, adults and children who are disabled and have a low income or assets can get benefits from SSI.

Suppose you are going to make a comparison between these two different types of Social Security benefits. In that case, you should be informed that the SSDI payments, on average, offer a higher monthly payment. 

The benefits associated with having a disability under this program are, on average, more than twice as much as the benefits associated with receiving social security income assistance. But there’s a chance the outcome will change depending on the specifics of your case.

SSI Benefits

The standard federal Supplemental Security Income payment for an individual in 2023 is $914 per month. (Most states provide a supplementary payout on top of this.) Monthly SSI payments for a married couple are capped at $1,371 by the federal government.

It’s important to remember that a social security income recipient’s benefits will be cut by any other income they receive. As a result, the average monthly SSI payout will be less than $914 for many participants.

SSDI Benefits

In 2023, the average monthly benefit for Social Security Disability Insurance is $1,483. This indicates an increase from the monthly benefits of $1,358 in 2022. 

Because your Social Security Disability Insurance payment is determined by your past work history, certain SSDI recipients may be eligible for a larger amount. A recipient of Social Security Disability Insurance can receive a maximum monthly benefit of $3,627.

It is important to keep in mind that a person’s eligibility for SSI will be terminated in almost all instances if they get a benefit from SSDI that is greater than the maximum payment that can be received through SSI.

Conclusion

So, while SSDI does pay more than other social security income payments, such as SSI, there are also extensive requirements that must be fulfilled for someone to be entitled to those benefits. Also, differences in each case could translate to different levels of earnings within both programs.