Receiving Social Security benefits is a way of life for many retirees. In fact, in 2019, about 64 million Americans received more than $1 trillion in Social Security benefits.
While the estimated average Social Security benefit in 2021 is $1,277 for a disabled worker with no children and $2,224 for a disabled worker with a spouse and one or more children, you may be wondering if you’ll be entitled to more than that.
Here’s how Social Security disability benefits are calculated to determine the maximum monthly disability benefit one can receive from Social Security, as well as who’s eligible to receive the maximum and how it changes year to year.
- Social Security disability benefits provide assistance to those who suffer from conditions that will last for at least a year or result in death.
- The starting point for qualifying for benefits involves working for a sufficient amount of time and paying Social Security taxes from your earnings.
- Your years working and paying the tax translate to “work credits.” One work credit equals $1,470 in 2021.
- You may need as many as 40 work credits to qualify, depending on your age. Younger workers who become disabled will need less.
What Are Social Security Disability Benefits?
Social Security disability benefits are monthly payments paid by the Social Security Administration (SSA) to disabled workers who have worked long enough to earn those benefits and whose medical condition will last at least one year or result in death.
Disabled workers, as well as their spouses and children, may be eligible to receive Social Security disability benefits.
Like other Social Security benefits, these funds are collected via taxes taken from your paycheck. If you do not work in a job that takes Social Security taxes out of your pay, you may not be eligible for Social Security disability benefits. These benefits are paid out to beneficiaries from a separate account than traditional Social Security retirement benefits. The Disability Insurance Trust Fund is used to payout these benefits. The funds are allocated according to the Federal Insurance Contributions Act and the Self-Employment Contributions Act.
Social Security Disability Benefits by the Numbers
Generally speaking, the maximum Social Security disability benefit you and your family can receive is between 150% and 180% of your disability benefit, though each family member may be eligible to receive up to 50% of your monthly benefit amount. Keep in mind, there is a limit to the amount one family can receive in disability benefits.
Your spouse can begin receiving Social Security disability benefits at age 62 or older, or at any age if they’re caring for a child under age 16 or who is disabled.
Children can receive benefits as long as they’re unmarried and meet one of the following criteria:
- Under the age of 18
- Between 18 and 19 years old and a full-time student in grade 12 or below
- Age 18 or older with a disability that started before age 22
Benefits for children generally cease once they turn 18 unless they are disabled. If the child is still in school when they turn 18, the benefits will continue until they graduate or until two months after they turn 19, whichever comes first.
Widows and widowers can also receive benefits if they are between 50 and 60 years old, meet the definition of a disabled adult, and their disability started before or within seven years of their spouse’s death.
Social Security benefits generally increase year over year, depending on the cost of living. This is called the Cost of Living Adjustment, or COLA. In January 2021, Social Security beneficiaries receive a 1.3% COLA increase to their benefit.
Applying for Social Security Disability Benefits
In order to apply, you’ll need to have earned enough work credits. Generally, you need 40 work credits, but younger workers may need less. For example, workers who become disabled before age 24 only need six work credits in the last three years leading up to their disability in order to be eligible to apply. Workers between 31 and 61 years of age will need between 20 and 39 credits, while workers age 62 and older will need 40.
In 2020, one work credit equals $1,410. You can earn up to four work credits per year if you earn $5,640 or more. In 2021, one work credit equals $1,470, and for four credits you need to earn $5,880.
If you’ve earned enough work credits, you can apply for disability benefits as long as you also meet the following criteria:
- You are age 18 or older
- You are not currently receiving Social Security benefits
- You are unable to work because of a medical condition that is expected to last at least one year or result in death
Your condition must significantly limit your ability to stand, sit, lift, walk, and remember for at least one year. If it doesn’t, then the SSA won’t consider you disabled.
Another important requirement to apply for benefits is that you must not have been denied benefits within the last 60 days. However, if a past application was denied, you can request an appeal via the Social Security Administration’s Internet Appeal application.
Additionally, the Checklist for Online Adult Disability Application has more detail on the information you’ll need to provide when applying, ranging from basic information, such as work history, children, and any military service, to your medical history, such as your doctor or other health care provider’s names, medical records, and any medications you take.
Other Important Considerations
The Social Security Administration’s online calculator can help you estimate your Social Security disability benefits. Just type in information such as your birthday, age at retirement, whether you want your benefit shown in today’s dollars or inflated dollars, and your earnings by year, and you’ll receive a look at what your monthly disability benefit could be.
It’s important to note that the process of applying for and receiving disability benefits may take time, which means you won’t start receiving payments right away—even if you are approved. According to the Social Security Administration, your first payment won’t be made until six months after your application is approved.
But what if your Social Security disability benefit isn’t enough? Another option is to apply for Supplemental Security Income (SSI). The SSI program pays benefits to blind or disabled adults and children, or people age 65 and older who meet certain income requirements. This program is intended to help those with limited financial resources, as well as disabled persons who are in need of supplemental income.