How Are SSDI Benefits Calculated?
POSTED BY Jan Dils . April 4, 2018
Even if you’ve managed to successfully navigate the complex and Byzantine social security benefits process, that doesn’t necessarily mean you’re done with dealing with the Social Security Administration. As any SSDI lawyer will tell you, the next stage of the process is to determine exactly how much you are owed and SSDI Benefit Calculation.
Unlike other forms of social security, social security disability insurance has nothing to do with how much income you have or how severe your condition might be.
While an SSDI lawyer that knows the specific intricacies of your case can give you a better insight into what kind of payment to expect, this guide should serve as an effective baseline that you can then estimate your own potential earnings off of.
Of course, an SSDI lawyer should always be contacted before pursuing a claim with the Social Security Administration.
Determining a Basic Payment on SSDI Benefit Calculation
As previously mentioned, social security disability insurance works differently from most other forms of social security. There are no additional benefits owed to someone with a more severe disability, and there is no adjustment to the payments made based on a person’s existing level of income.
Instead, the basic payment from social security disability insurance is instead reliant on a person’s previous lifetime earnings. For most social security disability insurance recipients, this translates to a monthly check that ranges between $700 and $1,700.
Although we’ve presented a simplified version of the Social Security Administration’s formula for determining a person’s expected earnings from social security disability insurance, the truth is that the formula used is considerably more complex.
This is because the Social Security Administration doesn’t just rely on taking a person’s lifetime earnings and dividing it by the number of months they worked. Instead, the Social Security Administration uses a more complex formula that applies weights to a number of different factors in order to give a person a more representative amount each month.
This representative amount is based on how much the Social Security Administration estimates that you’ve paid to social security in the form of taxes.
This system is referred to as “covered earnings.” From these covered earnings, a number of other formulas are derived. An individual’s average covered earnings for a specific period of time are known as an average index monthly earnings, which is shortened to AIME.
From an individual’s AIME, their primary insurance amount is then derived. This is the figure that the Social Security Administration ends up using to determine how much a person earns from social security disability insurance benefits each month.
From the PIA, the Social Security Administration then applies various fixed percentage points to the model, which are referred to as “bend points.” Bend points are adjusted on a yearly basis, ensuring that the Social Security Administration can tweak its percentage points as needed.
Since these bend points are adjusted on a yearly basis, it can be difficult to gauge the formula in a given year. While we have plenty of statistics for the various years in which the Social Security Administration has utilized this formula system, that doesn’t mean it can be used to easily predict any recognizable pattern for the coming years.
Still, there is hope for people that are genuinely curious about their covered earning potential. The Social Security Administration actually has a link on its website that allows users to easily see their covered earning statement.
Through this exhaustive statement, users can see a breakdown of their entire covered earning history. For those that pay into this system, the Social Security Administration sends out a breakdown every five years.
In addition, the Social Security Administration also sends one out on a yearly basis to anyone over the age of 60. By providing this information free of charge, it’s hoped that people will be conscious of how much money they are contributing into social security, and give them a better sense of what they can hope to collect through social security disability insurance.
Of course, the best way to ensure that someone is getting the social security disability insurance benefits that they’re owed is to make sure they have a knowledgeable SSDI lawyer by their side.
In addition to a covered earning statement every few years, interested parties can also contact the Social Security Administration directly by calling their phone number.
By speaking to a local Social Security Administration representative at one of their many field offices, an individual can find out virtually everything they need to know about their covered earnings report, or any other specific item involving social security that they’re curious about.
This transparency is a useful tool for those that are considering applying for social security disability insurance benefits and is also something worth keeping in mind for those that are still working towards their covered earning pool.
Given how difficult applying for social security disability insurance benefits is, it’s important to take advantage of any tools that the Social Security Administration provides when the opportunity presents itself.
Just as it is with claims submitted to insurance companies, the Social Security Administration will look for any excuse to deduct from benefits payments or deny them altogether.
While an experienced lawyer can help offset these setbacks and ensure that you’re paid a fair amount for your disability, there’s still no way of guaranteeing that the Social Security Administration will behave appropriately on the first phase of the claims process.
Potential Ways Your Payment Can Be Reduced in SSDI Benefit Calculation
Speaking of behaving appropriately, there are actually quite a few ways in which the Social Security Administration can deduct benefits while in SSDI Benefit Calculation from a social security disability insurance payment.
It’s worth mentioning that the Social Security Administration does make a distinction between private disability insurance payouts and government disability insurance payouts.
This means that if you have your own private disability insurance policy that you’re collecting money from, then the Social Security Administration will not touch that money or use it as a basis for deducting benefits from their own monthly payout.
Despite this concession, there are still plenty of other government-based programs that the Social Security Administration will gladly deduct payments from.
This includes workers’ compensation, temporary state disability benefits, and any other government program that pays out benefits to people affected with disabilities. When you collect money from these programs, all of it serves as a deduction from the Social Security Administration’s social security disability insurance payouts.
In addition to these types of deductions, there are also other restrictions on the maximum value of a Social Security Administration payout. In terms of a maximum benefit that any one person can be entitled to in 2016, the Social Security Administration has set the limit at $2,639.
Additionally, the Social Security Administration has put specific rules for SSDI Benefit Calculation in place that make it so that an individual cannot collect more than 80% of their average monthly earnings before their disability in social security disability insurance benefits.
While these restrictions can seriously impact the amount of money a person receives in a given month, there are still a few government-based programs that remain unaffected. With this in mind, there is a considerable amount of leeway for knowledgeable applicants to maximize their potential earnings from the Social Security Administration.
Although it’s difficult to navigate these complexities on your own, there are plenty of professional social security disability insurance benefits lawyers that can provide valuable insight into the Social Security Administration’s processes.
Once a claim has been processed and the Social Security Administration has settled on the amount that is due, the next stage is to determine how many months of backpay the applicant is entitled to. While this varies from applicant to applicant, it is typically based on a combination of when the applicant first made their claim and when the disability is claimed to have first taken effect.
This is yet another area where those unfamiliar with the intricacies of the Social Security Administration may not know what to look out for. Having a lawyer negotiate with the Social Security Administration can result in more backpay being earned than would have otherwise been possible. It’s ultimately up to you to find a lawyer that you can trust.
A recurring theme throughout this guide has been just how valuable a lawyer can be in maximizing the benefits earned. Not many people realize just how important it is to have a lawyer on their side for SSDI Benefit Calculation, especially when they’re going up against the government.
Unfortunately, the Social Security Administration is known for being particularly thorough in their evaluation process, so even the most deserving of people can have issues with getting the money they’re owed. This is why it’s so important to come to the process fully prepared and to have a lawyer that’s equally prepared by their side.