In response to the 2024 Cost of Living Adjustment for Social Security Disability Insurance (SSDI), a number of federal payments are slated for modification. The adjustment, set at 3.2%, will have far-reaching effects on various aspects of the SSDI program.
Foremost among these adjustments is the recalibration of the SSDI payment structure for the year 2024. Under these changes, the maximum monthly benefit cap will be fixed at $3,822, equating to an annual sum of $45,864.
Knowing How the SSDI Payments Are Calculated for Beneficiaries
The determination of SSDI payments is a complicated process reliant on several key factors. At its core is the Average Indexed Monthly Earnings (AIME), which is derived from an individual’s cumulative work-related tax contributions over their employment history. The Social Security Administration (SSA) employs the AIME as the base for establishing one’s Primary Insurance Amount (PIA), which, in turn, forms the basis for their SSDI benefits.
In recognition of the need to maintain the relative value of income over time, accounting for factors such as inflation and the cost of living, the SSA indexes the individual’s wages. This indexing process considers the highest-earning 35 years of an individual’s working history, breaking down the AIME into three distinct segments.
The first segment encompasses earnings up to $1,115, the second spans earnings falling between $1,115 and $6,721, while the third pertains to earnings surpassing $6,721.
Who Could Apply for SSDI Benefits?
Losing the ability to work is never in anyone’s life plan. However, in the event that it does occur, SSDI is there to support the financial safety for those who meet the eligibility requirements. Let’s understand together why SSDI is an earned benefit. To be eligible, you must have a sufficient work history, including recent contributions in the form of Social Security taxes deducted from your income. These contributions translate into valuable Social Security work credits, which are the key to accessing SSDI benefits. The number of work credits required can vary.
Work credits are contingent on your total annual earnings. For each year in which you work and pay Social Security taxes, you can earn up to four credits. In 2023, you must accumulate $1,640 in earnings to obtain one Social Security credit, and $6,560 to secure the maximum of four credits. Therefore, to qualify for SSDI, you’ll need to amass an adequate number of these credits, the exact amount depending on your age at the onset of your qualifying disability.
In most cases, you’ll need a total of 40 credits, with at least 20 of them earned in the ten years leading up to the commencement of your disability. This specific criterion ensures that you have a recent and substantial work history to be considered eligible for SSDI benefits.