How It All Adds Up - Understanding How Other Payments Affect Your Social Security Disability Payment

If you have applied for Social Security disability, you may have calculated how much extra income you will have in your household. Unfortunately, your calculations may not be correct. Payments that you may be receiving from certain other sources may result in your benefit being reduced. The good news is if the income is from private sources, it may not affect your benefit at all. Understanding which payment is what will give you a better chance of correctly calculating how much income you will have coming in.

What Benefits Will Reduce Your Benefit

When you are looking forward to additional income coming into your household, it can be very confusing to find out that monies that you are already receiving will offset, or reduce, the amount of Social Security Disability Insurance (SSDI) you are slated to receive. Some of these monies are those that come from the following sources:

  • Workers' Compensation
  • Public disability benefits
  • Government pensions not covered by Social Security
  • Foreign employment income

These benefits, in addition to your SSDI, cannot exceed 80% of your earnings prior to you becoming disabled.

What Benefits Will Not Reduce Your Benefit

Fortunately, there are benefits which will not reduce your benefit. Most of these are from private sources, or investments that you have previously made. These may include:

  • Private pensions
  • Private disability insurance benefits
  • Passive investment income

These sources of income will not be considered when your benefit is being calculated. If your investment income is from an activity such as rental properties, which you manage and perform the upkeep on, it could be viewed as a job, and may keep Social Security from viewing you as being disabled. If a management company performs these activities, it could be viewed as passive income.

How Your Social Security Disability Benefit Is Calculated

A Social Security Disability Insurance (SSDI) benefit can be a financial asset to your household. Unfortunately, it is not a benefit that you will get rich off of. In 2014, the average disabled worker only received $1,148 a month. If your spouse qualifies, or you have one or more children who qualifies for a benefit, your amount could be much more.

Your benefit is based on the average lifetime covered earnings that have been reported to Social Security on your record. This means that if you have earned income from a source that was not reported, or that did not pay into Social Security, your benefit could be reduced.

To calculate your benefit, Social Security uses a very complex formula. Without knowing the exact numbers that are being entered, it would be difficult for you to come up with an estimate of what your disability is worth. Social Security sends out an annual statement that includes an estimation of your projected disability amounts, as well as your projected retirement amounts. You also have the ability to review your earnings record, as well as estimated benefits, online.

You May Receive More Than You Think

Once you have figured out how much your monthly benefit will be, you may want to consider some of the other benefits that may come along with it. In addition to a monetary payment, you may also qualify for a lump sum back payment.

Because disability cases can take so long to decide, Social Security will take into consideration when you became disabled, and can possibly pay you your monthly benefit back to that date. They will take into consideration:

  • The date you became disabled, or your established onset date (EOD) - This date will be established through a review of your medical record, as well as your work history.
  • The date you applied for benefits - For the purposes of Social Security disability, your EOD cannot be before your application date.
  • Your five-month waiting period - You are not eligible to receive benefits until the sixth month following your EOD.

You will receive this money in one lump sum payment once you have been approved.

What You Need To Do

Although many people attempt to navigate the Social Security disability process alone, it can be very difficult to do. For the best results, hire a Social Security attorney. They will have the experience to review and evaluate your case. The assistance Social Security attorneys offer may make a difference in your application being approved.