Social Security Disability Insurance is a saving grace for most people with disabilities who are unable to return to work after a disability or medical condition. But the amount is usually so low that it is difficult to get by. You may be wondering why your SSDI is so low.
There are 6 common reasons why your Social Security Disability Insurance (SSDI) benefits could be very low. Your earnings from employment, other disability benefits you may be receiving, offsets due to certain kinds of debt, receiving retirement benefits, or having other kinds of family or household income.
Keep reading below as we discuss the potential reasons why your SSDI may be low.
What are SSDI Benefits?
SSDI refers to the federal government’s disability benefits program. Disabled workers who are unable to return to the workforce and who qualify, could receive Social Security Disability Insurance benefits. Disability and job history are taken into account when determining Social Security Disability Insurance benefits.
Paying into FICA, accruing sufficient work credits, and being disabled enough to prevent you from working for at least a year are all necessary to qualify for Social Security Disability Insurance benefits.
In addition to meeting Social Security’s definition of disability, you must have obtained enough work credits to qualify. Disability benefits under SSDI require a minimum of six work credits earned within the 3-year period ending with your disability for those who become disabled before the age of 24. If you are between the ages of 24 and 31, the number of credits needed will be based on your age and the number of years worked.
To qualify for Social Security Disability Insurance beyond the age of 31, you must have earned at least 20 credits during the decade prior to your disability.
To be qualified to apply for Social Security Disability Insurance disability payments, you are required to be either a worker who is blind or disabled, an adult who has been declared disabled from childhood, or otherwise entitled to apply based on the regulations set forth by the Social Security Administration (SSA).
Your Social Security income record will determine how much money you receive each month in disability payments.
How Much Money Will You Get From SSDI?
The amount of Social Security Disability Insurance benefits you receive is based on your lifetime earnings (and related tax payments). While there is a complex formula that determines how much of a benefit you receive, in general, your SSDI payment will increase in proportion to your years of employment.
There is no fixed minimum benefit for SSDI recipients. The highest possible monthly payment is $3,627 in 2023. The average SSDI benefit, however, is only approximately $1,480 per month.
Wondering how much of a Social Security Disability you might receive? Once you sign into your My Social Security account, you’ll have access to your complete earnings history and the formulas used to determine your benefit amount.
Contact Social Security at 800-772-1213 if you believe an error has been made. If you become disabled and are unable to return to work until you reach retirement age, your disability benefits should be equal to what you may get in a retirement pension.
Reasons Why Your SSDI is So Low
Following are some reasons why your SSDI benefits may be low.
1. Financial Circumstances
Eligibility for Social Security Disability Insurance and Supplemental Security Income depends in large part on whether or not you are able to work and support yourself financially. Your financial situation will be taken into consideration by the SSA as well.
2. Employment Earnings
In some cases, you can keep working while still receiving SSD. There is a catch though: you can’t work more than the amount Social Security Administration considers “substantial.” Benefits from SSDI and/or SSI will be terminated if you work at or above the substantial or gainful employment level.
You must notify the Social Security Administration in advance of your intention to seek full-time employment again. They will give you some wiggle room to make mistakes while working. You can keep getting benefits while looking for work, though the amount you receive each month may change.
Your benefits won’t be terminated if you work less than the SSA’s threshold for substantial employment, but they may be reduced.
3. Other Disability Benefits
Your Social Security Disability benefits will need to be reevaluated if you start collecting other types of public disability benefits, such as workers’ compensation after you have already been receiving SSDI benefits.
The Social Security Administration will evaluate your total financial situation. In addition, they will examine the amount of your monthly benefit payment three times a year while you continue to receive other types of disability payments.
4. Relationship Status or Household Income
The Social Security Administration will look at your spouse’s earnings and assets if you get married. The same thing applies if your partner becomes disabled and starts receiving Social Security Disability Insurance or some other kind of public disability benefits.
In some cases, family income can also alter the total amount of SSD payments, such as when a child receives SSI benefits and either of their parent’s income or assets change.
5. Pension Payments
The amount of your disability payments may also be affected by your eligibility for and receipt of state or federal retirement benefits, such as those earned through work in public service.
Once you begin receiving retirement benefits, the Social Security Administration may reevaluate your disability benefits and reduce your monthly SSDI payment.
6. Offsets
An offset is one event that could reduce a person’s social security benefits. This occurs when a creditor attempts to collect a debt by using the benefits you receive. The following are some kinds of debts that might be offset against SSDI:
- Student loan defaults
- Unpaid child or spousal support payments
- Taxes due or unpaid
The first $750 of your Social Security earnings are shielded from federal taxation. If a debt is found to be legitimate, however, the SSA will deduct a certain amount from your benefits each month until you pay it back.
Your benefit payment will be reduced by any outstanding debt until that debt is paid in full. In the meantime, you’ll need to make do with the shortage.
Can I Work While On SSDI?
In order to receive benefits from Social Security Disability Insurance, workers must first make payroll contributions. This is why the Social Security Administration offers job incentives to help people get back into the workforce.
The Trial Work Period (TWP) allows a person to work up to their ability level while continuing to receive their full SSDI payment for a period of nine months during a rolling 5-year period.
After the TWP, there is the Extended Period of Eligibility (EPE), a three-year period during which a person is entitled to receive their entire SSDI benefit in any month in which they are unable to earn above SGA.
Subsidies are monetary compensation given to an employee in exchange for receiving special accommodations from an employer, such as a job coach or a lighter workload.
SSDI recipients have the option of using subsidies to lower their countable income during the EPE. If income can be reduced below the SGA level, benefits will continue to be paid.
Strategies for Maximizing Benefits from Social Security
To help you maximize your Social Security Disability benefits, we’ve put together seven proven methods. Some of them might not be relevant right now, but they could be in the future.
Cost of Living Adjustment (COLA)
The Social Security Administration raises Social Security Disability Insurance and Supplemental Security Income (SSI) benefits annually to account for inflation.
The Social Security Administration uses the Consumer Price Index to assess and adapt to changes in the cost of living. The Social Security Administration refers to these increases in benefits as Cost of Living Adjustments, or COLAs. Your Social Security Disability benefits will rise each year to account for inflation.
Recalculation of Disability Benefits
Recalculating your disability benefits is another option for increasing your payouts. The Social Security Administration may recalculate your benefits if they discover an error in the original calculation or if your wages were not properly accounted for. However, recalculations are quite unusual.
Working At Least 35 Years
To be eligible for Social Security Disability Insurance, you must have worked long enough and be disabled according to SSA guidelines. Social Security retirement benefits require ten years of employment and 40 work credits.
On the other hand, if you work for 35 years before retiring, you might get a better pension. This is due to the fact that your highest 35 years of earnings are used to calculate your Social Security benefit. Your retirement benefit will be reduced if you have fewer than 35 years of earnings by the time you apply for it.
Apply After Retirement Age
Retirement benefits from Social Security can start as early as age 62. Waiting until you reach full retirement age to file for disability benefits will increase the amount you receive. The official retirement age is 67.
By continuing to work past age 70, you can boost the amount of money you receive from Social Security. This is because your benefit payouts will increase since you’ve worked beyond the typical retirement age.
Social Security Spousal Benefits
Depending on the type of disability or retirement benefits you get, your loved ones may also be eligible for assistance. This also applies to any ex-spouses you may have. The spousal benefit could be as much as 50% of your own benefits.
If you apply for spousal benefits before you reach full retirement age, the Social Security Administration will lower the amount you get. Waiting until you reach full retirement age to begin receiving payments ensures that your spouse will receive his or her entire benefit amount.
Social Security Survivors Benefits
If a family member or other close relative passes away, you may be entitled to SSDI Survivor Benefits from the Social Security Administration.
The Social Security Administration offers monthly payments called survivor benefits to the family members of a deceased worker. Spouses, children, and parents who qualify can receive these benefits.
You do not need to have worked or paid into Social Security to get these payments. You and your family could be eligible for benefits based on the earnings of a worker who died. The deceased person must have worked long enough to qualify for benefits.
Get Legal Help With Your Social Security Disability Claim
If you want your monthly Social Security benefits to be higher, hiring a Disability attorney is a good idea. Your claim for disability benefits can be reviewed by a skilled attorney who can also provide guidance and representation throughout the process.
Budgeting for SSDI
Having the capacity to create and stick to a budget can make or break your financial stability. Creating a budget and sticking to it might provide you with insight into your spending habits.
Making a strategy for your money by creating a monthly budget is a great idea. It will help you budget for the future by providing an accurate picture of your current and projected spending.
Creating a monthly budget is as easy as following these six steps:
1. Study your income and expenses. Do you have other sources of money coming into the house besides your SSDI? Keep financial flow in mind as well. Consideration should also be given to the time at which you get money.
2. Create categories for the fixed budget. Monthly fixed costs include things like your mortgage or rent, car payment, cable subscription, etc. You can more effectively budget for everything else once you know what your fixed expenses are.
3. Break down your variable costs. All categories that change monthly are listed here. Things like groceries, gas, and vet bills for the family pet are all examples. Keeping tabs on these prices is useful for planning monthly expenditures because of their variability.
4. Prioritize paying down debt and building savings. Credit card debt should be paid off first because interest charges add up quickly. Once you’ve eliminated your debt, you should immediately begin saving as much as possible. Having a savings cushion for emergencies is usually a good idea.
5. Make some changes to your spending plan. Having completed the preceding steps, you can now identify your biggest areas of financial outlay. Make some changes to your spending habits if you can.
6. Maintain progress. Keep a monthly tally of your progress toward your savings targets. Even though it can stress you out, you get to maintain control of your finances.
Conclusion
SSDI benefits can often be quite difficult to survive on alone, especially if the amount you receive in benefits is very low. There are several reasons why your SSDI may be low. If you think the SSA has made a mistake in calculating your SSDI benefits, it may be helpful to consult an SSDI attorney or advocate.
