SSDI Benefits- Modest But Important for Disabled Americans

In recent news, there have been many articles in the press about workers turning to Social Security Disability Insurance (SSDI) when their unemployment benefits run out.  This criticism implies that people are submitting false disability claims instead of returning to work, but the reality is that disability benefits are very modest and significantly less than the amounts people would receive if they returned to their pre-disability income.

How are benefits calculated?  They are based on the average earnings (with the exception of 5 years of zero or lowest earnings) from the time a person started working as a young adult to the start of his disability, taking into account, through a formula, the increase in average wages for the earlier years.  The average award in December 2011 was just $1,111/month ($13,326 annually) with only 6% of beneficiaries receiving more than $2,000/month- a still decreased amount than what most workers would normally receive on the job- creating a situation that greatly reduces the standard of living for many Americans on disability.

Studies show that for most recipients, disability benefits make up 75% of their total income.  What’s even more astounding is that 25% live below the poverty line, and most live below 200% of the poverty line.  Few people would prefer that to working, if they were able.