Social Security Disability (SSD) benefits help cover the costs of living and other expenses for people who have disabilities that prevent them from working. Eligibility is difficult to determine, and those who qualify also have to consider how the benefits formula works. Take a closer look at how SSD benefits calculations work, and learn how the professionals at Thomas J. Ueberschaer, P.A. can help.
The SSD Benefits Formula
The amount you can receive from SSD benefits depends on how many work credits you’ve earned throughout your career. Note that this amount is not dependent on the details of your disability. SSD benefits are calculated by looking into what you have paid into Social Security from your income in the past. The first step is to determine your average indexed monthly earnings or AIME. This figure represents your average earnings from Social Security-covered income and is adjusted for wage growth.
After your AIME is determined, SSD benefits depend on your primary insurance amount or PIA. This figure represents your full retirement benefit, which is based on your age when you become unable to work. For example, your PIA will be different if you become unable to work at age 60 compared to becoming unable to work at age 45. PIA uses a progressive formula in which you get less for generating more income. Think of this as the opposite of marginal taxes, in which the taxes increase after certain income thresholds. With PIA, your base benefits decrease after certain income thresholds.
Work Credits
To qualify for SSD, you must have earned enough work credits. Work credits are earned from standard income from your job, and the amount required to get a single work credit varies based on the year in question. The more recent the year is, the more you will have to earn in income to get a single work credit. The typical current rate is one work credit for every $1500 or so in earnings. Additionally, you can earn a maximum of four work credits each year.
The amount of work credits you will likely need to qualify for SSD benefits is at least 40. Among those 40, half of those credits should be those earned in the previous ten years before the onset of your disability. Given that the maximum amount of credits per year is four, you can earn a maximum of 40 credits in ten years. Since the requirement for SSD benefits is only 20 credits in the past ten years, you do not have to earn the full four in a year as long as the total 40 credits are earned altogether, with half of that in the past ten years. The more you’ve paid into Social Security throughout your work history, the more credits you will likely have.
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Ask Tom Today!Common Misconceptions
There are a few misconceptions to be aware of regarding SSD benefit calculations. Some may say that everyone gets denied the first time they apply. This is not necessarily true, but the initial acceptance rate is low. You shouldn’t be discouraged if denied the first time, but it is not inevitable. Having a lawyer on your case can help you get accepted the first time.
It is also commonly and incorrectly believed that one cannot get SSD benefits if they receive workers’ compensation. This is untrue, as you can receive both at once. It’s important to note, however, that your SSD benefits will be reduced by the workers’ compensation offset rule.
Some believe the government cannot take SSD benefits to pay child support obligations. This is not true. The government can garnish part of your SSD benefits. Only SSI benefits are immune since they are needs-based.
Maintaining Accurate Records
The better your financial records, the better your SSD claim will likely be. Keep detailed records of your earnings as much as possible, in addition to medical records detailing when the onset of your disability occurred and when it interfered with your ability to work. Of course, having an SSD lawyer on your side will make it easier to gather all the necessary information.
Seek Professional Help
At Thomas J. Ueberschaer, P.A., we have extensive experience handling SSD benefit cases, including those with unique complexities. Contact our team today to ensure you get all the benefits you are entitled to by calling 850-741-7381 or filling out our online contact form to schedule a free consultation.