If you qualify for SSDI disability benefits, you will be paid according to the Social Security Administration (SSA)’s assessment of your average annual income. Every year when you get your regular statement from the SSA, you will get a summary of your annual earnings, whether you qualify for benefits, and an estimate of your expected disability benefits.
This estimate is only that, and your actual benefits may be different when you receive them because of law changes, cost of living adjustments, and other payments you might be getting at the same time as your disability benefits.
Cost of Living Adjustments for Disability Benefits
SSDI is intended to provide disabled workers with fair compensation for their years of work. This compensation would not be fair if it did not increase as inflation increased. Therefore, your disability benefits will slowly increase as the cost of living increases. You will be notified when your benefit amount changes.
Other Payments That Affect Your Compensation
If you are receiving other types of compensation in addition to your disability benefits, some of them may cause your SSDI payments to be reduced. These include workers’ compensation and other public disability benefits.
The total of these benefits when combined cannot exceed 80% of your average current income before you became disabled. The average current income calculation is somewhat mysterious, but it is an intent to reflect the amount you have been earning just before you became disabled. Since workers’ compensation may be up to 67% of your income, you may end up with dramatically reduced social security benefits.
Your SSDI payments will also be affected if you start getting a pension from a job where you didn’t pay Social Security Taxes.
Other Payments That Don’t Affect Your Compensation
However, not all types of benefits will affect your SSDI compensation. These are:
- Veterans Administration benefits
- State and local government benefits, if you paid Social Security taxes on your wages
- SSI benefits
You are able to receive the full amount of these benefits as well as your SSDI benefits.
Will I have to Pay Taxes on My Disability Benefits?
Maybe. You will likely only have to pay taxes if you have substantial additional income beyond your SSDI payments. This is true of about one third of all SSDI recipients.
Will Benefits Change When I Reach Retirement Age?
No. Although your benefits will change from being disability benefits to retirement benefits, the amount will remain the same.
If you want to learn more about the amount of disability benefits you may receive, please contact us for a free evaluation of your disability benefits eligibility.