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How is Social Security Disability calculated?


Given the difficulty of applying for Social Security Disability benefits, many Illinois residents would like to know beforehand what kind of benefits they might qualify for. SSD benefit amounts are not based on financial need. The extent and effects of the disabling condition do not affect the benefit amount either. Instead, the Social Security Administration uses a set formula to calculate SSD benefits.




Basic guidelines

SSD benefit amounts are based on an individual’s earnings record and calculated with a weighted formula. Income amounts below certain thresholds are weighted heavily, while income amounts above higher thresholds are weighted less. For 2014, total SSD benefits are capped at $2,533.
The SSA uses an individual’s average monthly covered earnings during a set period of time to calculate the base benefit amount the individual qualifies for. If an individual did not pay Social Security taxes on any monthly earnings, those earnings are not factored into the calculation. For instance, income from government jobs with independent pensions is not considered covered earnings. The base benefit amount may be reduced if the individual already receives other government-regulated disability payments. Examples of these payments include temporary state disability benefits and workers’ compensation benefits. An individual’s total government-regulated disability benefits cannot add up to more than 80 percent of the amount the individual earned before becoming disabled. In additional to basic monthly SSD benefits, some individuals may be entitled to back payments or retroactive benefits. These are awarded if disability claim processing exceeds 5 months or if an applicant’s disability began more than 5 months before the date of application. These benefits are paid out as a lump sum and calculated based on the individual’s regular monthly benefit amount.

Making the calculation

Since benefits are calculated with a weighted formula, performing the calculations independently can be difficult. Fortunately, the SSA offers numerous resources for people who want to estimate their benefit amounts. These include:

  • Online tools to calculate disability benefits. These require the individual to manually enter earnings history; the final estimate is only as accurate as the earnings information provided.

  • Annual Social Security Statements. An individual’s statement, which can be accessed online, lists estimated benefits based on the SSA’s official earnings record for the individual.

  • SSA representatives. Individuals may also call an SSA field office and speak with a representative to get an estimate.

Individuals should remember that these figures are not exact. The final benefit amount may be altered if the individual receives other disability benefits or if the SSA’s earnings record differs from the record used to make the estimate.

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