Seven Things You Want to Know about Social Security Disability Payments
When people apply for Disability benefits, they always want to know how much their Social Security Disability payments will be and when they will start.
The short answer is: “It depends.”
Your monthly payout will hinge on a variety of factors, including which federal Disability program you qualify for: Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI).
So while you may have to wait until the end of the Disability process to find out the specifics of your situation, you can still get a good idea of what to expect down the road. Here are seven things you want to know about Social Security Disability payments:
How Much You Could Receive.
How much you could receive in Social Security Disability payments depends on whether you get approved for SSI or SSDI. Both programs offer cash benefits to disabled individuals who cannot work, but they are actually very different.
SSI is basically a welfare program that provides cash to disabled individuals who have never worked or have worked very little. The other option, SSDI, which is also commonly referred to as SSD, is available to disabled workers who have paid into the system through payroll contributions (FICA taxes withheld from your paychecks.)
SSDI
If you qualify for Social Security Disability Insurance, the amount of your monthly benefit depends on how long your worked and paid taxes into the system. The Social Security Administration uses a complicated formula based on your lifetime earnings to determine your monthly benefit, which could range from a several hundred dollars to more than $2,600.
In addition to yourself, your spouse and children may also be eligible for monthly Social Security Disability payments, which are referred to auxiliary benefits.
- In 2016, the maximum monthly benefit amount is $2,639.
- In 2015, the average monthly payment for a disabled worker was $1,165.
- The average monthly payment for a spouse of a disabled worker in 2015 was about $318.
- The average monthly payment for a child of a disabled worker in 2015 was about $350.
SSI
If you qualify for Supplemental Security Income, the amount of your monthly Disability payment depends on where you live and how much monthly income and assets you have. The program is designed to provide cash to meet basic needs for food, clothing and shelter.
- In 2016, the maximum monthly benefit amount is $733 for an individual.
- In 2016, the maximum monthly benefit amount for a couple is $1,100.
- In 2015, the average monthly payment for an SSI recipient was $541.
When Benefits Start.
SSDI
If you get approved for SSDI, there is a mandatory five-month waiting period before the Social Security Administration sends your first payment. Your will receive your first payment during the sixth full month after Social Security determined your Disability began.
Because there is a backlog of Disability cases, however, most individuals will have already served the five-month waiting period by the time they get approved for benefits. Because of the backlog, you will likely also be entitled to back pay or retroactive benefits.
SSI
There is no waiting period for SSI Disability benefits. You will start receiving monthly payments shortly after being approved. You may also be entitled to back pay.
How You Get Paid.
In March 2013, a law went into effect requiring everyone to receive Social Security Disability payments electronically. This is the case regardless of whether you receive SSI or SSDI payments.
Once you get approved, you can sign up for direct deposit, which sends payments directly into your bank account. Or, if you don’t have a bank account, you can sign up for the Direct Express card program and have your benefits deposited into a debit card account.
When You Get Paid.
SSDI
SSDI benefits are paid each month; the day you receive them depends on your birthday.
- Individuals with birthdays that fall between the 1st and 10th of the month are paid on the second Wednesday of the month.
- Birthdays between the 11th and 20th are paid on the third Wednesday of the month.
- Birthdays between the 21st and 31st are paid on the fourth Wednesday of the month.
If your payment date lands on a federal holiday, you will receive your payment on the nearest preceding day that is not a holiday.
SSI
SSI benefits are paid on the first day of each month, unless it falls on a Saturday, Sunday or legal holiday. In that case, your benefits will be paid on the banking day before the weekend or holiday. For example, if the first day of the month falls on a Saturday, you should receive your payment the Friday before.
** The Social Security Administration’s 2016 calendar shows the scheduled dates for all Social Security Disability payments, including SSI and SSID.
How Long You Can Collect.
In general, your Disability benefits will continue as long as your medical condition has not improved and you cannot work. Once you hit retirement age, your benefits will simply change over. This is true for both SSDI and SSI.
If you collect SSDI, your monthly benefits will become Social Security Retirement benefits. If you collect SSI, your payments will become SSI for the elderly.
Social Security Disability Payments and Taxes.
SSDI
In general, if SSDI is your only source of income, you will not have to pay taxes on your Disability benefits. You will only have to pay taxes if you have substantial income in addition to your SSDI benefits. According to the Social Security Administration, only about one-third of all individuals receiving SSDI will have to pay taxes. You may have to pay taxes if:
- You file a tax return as an “individual” and your income is more than $25,000.
- You file a joint tax return and you and your spouse share a combined income of more than $32,000.
- You are married and file a separate return, you will probably have to pay taxes on your benefits.
SSI
Supplemental Security Income is not taxable.
