Social Security Disability Insurance (SSDI, or sometimes just SSD) is a federal program administered by the Social Security Administration (SSA) that pays monthly benefits to you if you are disabled and unable to work. Unlike Supplemental Security Income (SSI), which also pays benefits to people who are disabled and unable to work but is based on limited income and resources, SSDI requires that you have worked and paid Social Security taxes for a certain length of time.
Calculating SSDI: Covered Earnings
If you are eligible for SSDI benefits, the amount you receive each month will be based on your average lifetime earnings before your disability began. This is all the benefit amount is based on, although it may be reduced if you are receiving disability payments from other sources, as discussed below. In other words, your SSDI benefit amount is not based on how severe your disability is, and unlike SSI, you cannot be denied SSDI because you have too much income or too many resources (assets).
Your earnings must be covered under the Social Security program in order to count towards the amount of SSDI benefits you will receive. “Covered earnings” are wages you have received from jobs that have paid into Social Security. If you have received a paycheck that had money withheld for “Social Security taxes” or “FICA,” the wages you made at that job are covered earnings and will count toward calculating your benefit amount. Most wages are covered earnings.
Your SSDI payment will be based on your average covered earnings over a period of years, known as your average indexed monthly earnings (AIME). A formula is then applied to your AIME to calculate your primary insurance amount (PIA)— the basic figure the SSA uses in setting your actual benefit amount.
To see your entire covered earnings history, you can check your annual Social Security Statement. Check your statement by logging on to my Social Security. You can also use a benefits calculator online at www.socialsecurity.gov/planners/benefitcalculators.htm to get an estimate of the amount of your disability benefits. Or, call your local Social Security office and they will be able to help you estimate what your benefits would be.
Disability Payments from Other Sources
If you receive disability benefits from a private source, like a private pension or private insurance benefits, these benefits will not affect your SSDI benefits. If, however, you receive public disability benefits, it may affect your SSDI benefits. For instance, if you were injured on the job and are receiving workers’ compensation benefits, it may reduce the amount of SSDI benefits you receive. Other disability benefits that are not job-related and are paid for by the federal, state or local government may also reduce your SSDI benefit amount. Examples of these include: temporary disability benefits paid by the state, military disability benefits, and state or local government retirement benefits that are based on disability.
The interaction between workers’ compensation (and other public disability benefits that may reduce your SSDI amount) and SSDI can be complicated and is different depending on what state you live in. If you qualify for more than one public disability benefit, you may want to speak with an attorney to make sure you do not miss out on any benefits you are entitled to.
The combined total amounts you receive from SSDI and all other public disability benefits cannot be more than 80% of the average amount you earned before you became disabled. If the amount is more than 80% of what your average earnings were before you became disabled, the excess amount is deducted from your SSDI benefits. Some public benefits are not counted towards the 80%. For example, if you are receiving SSI or Veterans Administration benefits, those will not reduce the amount of SSDI benefits you receive.