How Does the Social Security Administration Figure Your Payment Amount?

Social Security Disability Insurance Benefits

One of the most common questions claimants ask is “how much money can I expect to make”? The amount of disability a claimant is entitled to make for their Social Security Disability Insurance (SSDI) amount will be different than other claimant’s amounts because it is based on the claimant’s lifetime average earning which were covered by Social Security. The amount awarded will also be adjusted each year to account for cost of living changes. Some years the amount will not change.

The Social Security Disability Insurance payments may also be reduced if the claimant is receiving benefits from Workers’ Compensation due to a work related injury or from other disability programs. Other resource and income will not affect the Social Security Disability Insurance payment amount.

Supplemental Security Income Benefits

The Social Security Administration will calculate a Social Security Disability claimant’s Supplemental Security Income payment on the amount of the claimant’s countable income, the claimant’s living arrangements (if another person is providing food and shelter) and the state where the claimant resides.

The basic rate paid for Supplemental Security Income (SSI) is called the Federal Benefit Rate which is $674 per month for an eligible individual and $1,011 per month for an eligible couple (for 2010).  The Federal government may choose to adjust the Federal Benefit Rate each year. How does the state where the claimant resides affect their Supplemental Security Income payment? Some states choose to add what is called a state supplement onto the Federal Benefit Rate. The amount the state chooses to add and the requirements to qualify for the state supplement may vary by state.

How do you calculate your own Supplemental Security Income amount? First you take your Federal Benefit Rate, add your state supplement and subtract your countable income.  What is income? It can be anything you have received during the month which you can use to buy food, clothing or shelter. Sometimes you may also receive what the SSA calls “in-kind” income which is in the form of food, clothing or shelter, rather than cash.  The Social Security Administration has listed the following as income:

  • Wages from a job, whether in cash or another form
  • Net earnings from a business if the claimant is self-employed
  • The value of food or shelter that someone gives to the claimant, or the amount of money someone gives to them to help them pay for food or shelter
  • Department of Veterans Affairs benefits
  • Railroad retirement and railroad unemployment benefits
  • Annuities, pensions from any government or private source, workers’ compensation, unemployment insurance benefits, black lung benefits and Social Security benefits
  • Prizes, settlements and awards, including court ordered awards
  • Proceeds of life insurance policies
  • Gifts and contributions
  • Support and alimony payments
  • Inheritances in cash or property
  • Interest earned, including interest on savings, checking and other accounts
  • Rental income
  • Strike pay and other benefits from unions

Not all income, however, is counted. Students may also have an earned income exclusion for Supplemental Security Income. These earnings are not counted against their benefits if the student is attending school, college or university. The maximum amount allowed for students in 2010 is $1,640 per month up to a maximum of $6,600. Additionally, according to the Social Security Administration the following is not considered income when calculating a claimant’s Supplemental Security Income benefit amount:

  • Medical care and services;
  • Social services
  • Money from the sale, exchange or replacement of things a claimant owns
  • Most types of interest and dividend income
  • Income tax refunds
  • Earned Income Tax Credit payments
  • Payments made by life or disability insurance on charge accounts or other credit accounts
  • Proceeds of a loan
  • Bills paid by someone else for things other than food, clothing or shelter
  • Replacement of lost or stolen income
  • Weatherization assistance

As you can see, calculating Social Security Disability Insurance or Supplemental Security Income benefits may be complicated. Contact the Social Security Administration or a Social Security Disability lawyer who can answer your questions and determine if you can qualify for SSDI or SSI benefits.

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