Social Security Disability Insurance: What It Is and How It Pays

Close up of Social Security Disability Claim Form.
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When most people talk about Social Security, they’re referring to the program’s retirement benefits, which provide monthly checks as early as age 62 for some beneficiaries. But the Social Security program also has a host of other benefits.

In fact, the so-called “Social Security taxes” withheld from your paycheck every payday are technically known as “Old Age, Survivors and Disability Insurance” taxes, or OASDI. As the full name explains, in addition to “old age” or retirement benefits, you’re also paying taxes to support payouts for survivors and disability insurance.

Here’s how to qualify for disability benefits and what you might expect in terms of a payout if you’re eligible.

Learn More: Understanding the Basics of Social Security
Also See: The Biggest Problems Facing Social Security

What It Is

Social Security disability insurance (SSDI) is similar in some ways to private or corporate-sponsored disability plans. In other words, if you’re disabled to the point that you’re unable to work, the program will pay you a monthly income benefit. Just like Social Security retirement benefits, funds for Social Security disability insurance come from current workers, whose taxes fund the SSDI Trust Fund.

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Although the general structure of SSDI may be similar to other disability insurance plans, eligibility is much more difficult. Only the most severely disabled qualify for SSDI. However, the payouts are not partial or temporary. 

As defined under the Social Security Act, a disabled person eligible for SSDI must have a severe medical condition that either prevents work for at least one year or is expected to result in death. A qualifying person must be unable to do any type of work, not just work in a former chosen field.

Generally, you can qualify for SSDI only if you meet the same work requirements as for retirement benefits. This means that you need to have completed at least 40 quarters of coverage, with 20 coming in the past 10 years before you became disabled. Allowances are granted, however, for younger workers.

See More: All the States That Don’t Tax Social Security

How Much Does It Pay?

Although it’s fairly tough to qualify for SSDI, the benefits are by no means a windfall. As of November 2021, the average monthly benefit awarded was just $1,282.39, although this amount is expected to increase to $1,358 for 2022.

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Just like with Social Security retirement benefits, however, your SSDI payout will be tied to your individual income. To calculate your benefit, the Social Security Administration examines your earnings record from age 22 and until the age you became disabled. Between one and five of your worst-paying years are dropped for purposes of the calculation, depending on how long you’ve been working.

Are There Spousal or Family Benefits?

Qualifying spouses and children of eligible disabled workers can also draw Social Security disability benefits. A spouse must have a disabled child or a child under 16 or be over 62 to draw a disability benefit. Divorced spouses still qualify, as long as they were married for at least 10 years.

A child can qualify for SSDI benefits if they are under 18 or in high school and under 19. People who were disabled before age 22 also can receive Social Security disability benefits. [7]

Find: All You Need To Know About Collecting Social Security While Still Working

What Are the Maximum Payouts for SSDI?

For 2022, the absolute top payout a recipient could get from SSDI is $3,345 per month, up from $3,148 in 2021. However, as payouts are based on earnings, only high-income individuals qualify for the top SSDI payout. Qualifying spouses and children receive, at a minimum, the same as eligible disabled recipients, up to a maximum of 150% of the disabled person’s payout amount.

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What Is SSI?

Supplemental Security Income (SSI) is a safety net program for low-income individuals that may also pay disability benefits. To qualify, you must be 65 or older and either blind or disabled. Unlike SSDI, SSI doesn’t require work credits to qualify. However, you must have limited income and resources. Specifically, your assets must not exceed $2,000 for an individual or a child, or $3,000 for a couple, and your monthly income for 2022 must not exceed $841 for an individual or $1,261 for a couple. Those are also the maximum payout amounts for 2022.

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About the Author

After earning a B.A. in English with a Specialization in Business from UCLA, John Csiszar worked in the financial services industry as a registered representative for 18 years. Along the way, Csiszar earned both Certified Financial Planner and Registered Investment Adviser designations, in addition to being licensed as a life agent, while working for both a major Wall Street wirehouse and for his own investment advisory firm. During his time as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans for hundreds of clients.
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