The amount of someone’s monthly Social Security Disability (SSD) benefits payment is determined by a formula that uses the person’s lifetime taxable earnings as the base figure. Since the disability payment is based on earnings from work, there are not many opportunities to increase the base figure if the disability prevents the claimant from working.
However, there are a few circumstances in which you could increase your SSD benefits payments. Before we explain each possibility, let’s review how your Social Security Disability benefits payment amount is calculated.
How Your Social Security Disability Benefit Payment is Calculated
Social Security Disability (SSD) benefits are reserved for workers who paid taxes into the Social Security pot throughout their many years of employment. When one of these eligible workers suffers a qualifying illness or injury that prevents them from working, the SSD benefits are intended to replace a substantial portion of their income, just like Social Security retirement benefits do.
Many people don’t know that the amount a disabled person receives in SSD benefit payments is exactly the same amount they would receive as Social Security retirement benefits. The program presumes that someone with an impairment severe enough to qualify for SSD benefits probably won’t return to significant active employment. So the SSD benefit is an early collection of the retirement benefits the claimant had earned up to the time they were disabled.
Social Security Uses Your 35 Highest Earning Years to Determine Your Benefit Amount
To determine either a person’s Social Security Disability benefit or their Social Security Retirement benefit, the Social Security Administration (SSA) looks at the claimant’s 35 highest annual incomes and adjusts those figures to account for the rise in the cost of living since the year that income was earned.
Then the SSA adds together the 35 highest indexed annual incomes and divides the total by 35. That gives them the average annual income you earned in those years. Then, that figure is divided by 12 to produce your Average Indexed Monthly Earnings or AIME. This AIME figure gets used as the starting point for the SSD benefit calculation formula:
- 1). Add 90 % of the first $1,115 in the AIME, plus
- 2). 32 % of the AIME above $1,115 through $6,721, plus
- 3). 15 % of the AIME above $6,721 (if any).
- 4). Then round down to the nearest $0.10 if the figure is not a multiple of ten.
This formula produces the Primary Insurance Amount (PIA), your monthly benefit amount.
Increasing Your Disability Benefit with Higher Earnings Before Disability
As explained in the previous section, your SSD benefits payment amount is determined by your highest lifetime earnings. Those who can earn more during their working years will receive higher disability and retirement benefits. The maximum SSD payment possible in 2023 is $3,627 per month. If someone is already receiving SSD benefits, they would be unable to earn an annual income high enough to increase their benefit payment. Earning any more than the “substantial gainful employment” limit ($1,470/month in 2023) would disqualify them from receiving SSD benefits.
Increasing Your Disability Benefit by the Death of a Spouse (Survivor Benefits)
A more likely method of receiving an increase in your SSD benefit payment involves the spouse and former spouse of a deceased worker. For example, suppose a married couple both work and earn different incomes. If the lower-earning spouse became disabled before they retired, then their SSD benefit amount would be based on their own earnings history.
If the higher-earning spouse died, then the surviving spouse would be entitled to receive an SSD benefit amount based on the deceased spouse’s lifetime earnings. That would result in the surviving spouse’s benefit payment increasing because the deceased spouse’s earnings would have entitled them to a higher benefit had they lived.
This possible surviving spouse benefit boost also applies to surviving former spouses if they were married to the deceased worker for at least 10 years. When the decedent has a surviving spouse and a surviving former spouse, they both qualify for the full survivor’s benefit.
Increasing Social Security Benefits After Reaching Full Retirement Age
Remember that you receive the same benefit amount from both Social Security Disability and Social Security Retirement benefits. If you are receiving SSD benefits when you reach your full retirement age (FRA), your benefits from SSD stop, but your Soc. Sec. Retirement benefit payments begin for the same amount.
The difference is that after you reach full retirement age, you can earn an unlimited amount without jeopardizing your benefit payments. That means if you did resume working after you reach your FRA, you might earn a high enough annual income to have it qualify as one of the 35 highest earning years. If this occurs, then Social Security will recalculate your benefits based on the new equation using your new Average Indexed Monthly Income (AIME).
In reality, the newest annual income would need to be very substantial to result in a significant increase, but every dollar counts.
Annual COLA Increases Benefits
The Social Security Administration adjusts all benefit recipients’ monthly payments to reflect the inflation rate during a part of the previous calendar year. Recently, these Cost-of-Living Allowances (COLAs) have been very substantial. In 2022, COLA increased benefits by 5.9 %. In 2023, the COLA increased benefits by 8.7 %. These increases may only “keep up” with inflation, but the increases are important to every benefit recipient.