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How are Social Security Disability payments determined?

| Jul 15, 2014 | Social Security Disability |

People who become disabled in Illinois may be eligible for disability benefits through Social Security. One of the biggest questions that they may have is how much they will receive each month. Payments to approved recipients can vary, depending on factors such as previous income history, the existence of other financial support programs and current Social Security Administrations payment guidelines.

Income history

The first step the SSA uses to determine a benefit payment is people’s income history. For every year that people have earned wages and paid into Social Security, the SSA calculates an average indexed monthly earning. If a person worked as an independent contractor for a time, that income is not counted as eligible in determining benefits for Social Security Disability.

Once the income amounts are calculated, the SSA applies the base amount of their benefits scale to each income amount. It looks similar to the following:

  • Person made around $750 a month – 90 percent of that income is used as a benefit payment amount.
  • Person made about $2,500 a month – 90 percent of the $750 is used for benefit payment and then only 32 percent of the difference would be added as a benefit payment.
  • Person makes over $4,550 – 90 percent of the $750 would be used, plus 32 percent of income difference up to $4,500 and then 15 percent of any difference over that amount.

If a person has worked for over 20 years, the calculating of benefits can grow complicated relatively quickly, especially if they have worked at different income amounts.

Other financial support programs

In some cases, people may receive financial payments from other programs. If, for example, a person was working in a construction job and suffered a serious traumatic brain injury, that person may be receiving workers’ compensation or a compensatory settlement from the construction company or property owner. Such payments may lower the amount of money Social Security Disability pays out if the payments equal 80 percent or more of the person’s previous income.

On the other hand, veterans’ benefits have no impact on the amount of disability that a wounded soldier receives. Likewise, if a person has a private insurance policy for long-term disability, those payments will not be used to determine how much they receive from the SSA.

SSA payment guidelines

Each year, the SSA establishes benefit payment limits. For 2014, a person can receive no more than $2,642 a month in disability. For more information on how payments are calculated, people should meet with a Social Security Disability attorney.