Social Security Disability Benefits Do Not Equal a Livable Wage in Any State

May 5, 2023

One of the most common and persistent myths about Social Security Disability benefits is that they are too generous, and they somehow reward and encourage people not to work.

Nothing could be further from the truth: Average disability benefits do not cover anyone’s living expenses in any of the 50 states and the District of Columbia

There are only three states where the average disability check is enough to cover even half the cost of living there. And in D.C., the benefits do not even amount to one-third of the livable wage, a theoretical income level that allows individuals or families to afford adequate shelter, food, and other necessities

Before we plunge into what typical benefits are paid to beneficiaries here in Illinois and how those compare to a livable wage, it is helpful to understand the two kinds of disability payments under Social Security law—SSDI and SSI.

Social Security Disability Insurance (SSDI) pays benefits to you and certain members of your family if you have a health impairment that prevents working now, but you worked long enough and recently enough to qualify for coverage, and you paid into Social Security through FICA tax withholdings from your paycheck (or contributions if self-employed). To qualify for SSDI, you must have accumulated a sufficient number of recent work credits. Like Social Security retirement benefits, the actual amount you will be paid in disability benefits will depend on how long you worked and how much you earned.

Supplemental Security Income (SSI) is based on financial need, not work credits. The Social Security Administration (SSA) says, “It is designed to help aged, blind, and disabled people, who have little or no income.” SSI disability benefits are for individuals who have disabilities and have either never worked or who haven’t earned enough recent work credits to qualify for SSDI benefits. Some workers have a historical work history but have not worked recently enough to qualify for SSDI; these workers can file for SSI and collect until they reach retirement age, when their Retirement Insurance Benefit will replace SSI (if higher). To be eligible for SSI, you must have less than $2,000 in certain assets (or $3,000 for a couple) and, at most, a very limited income. Potential reform is being discussed in Washington that may offer some help to SSI recipients.

Medical eligibility for disability benefits is determined in the same manner for both SSDI and SSI. To qualify:

  • You must have a disability that has lasted or is expected to last for at least one year or result in death.
  • You must be unable to do the work you performed in the past 15 years.
  • You must show you cannot adjust to other work considering your age, education, and work experience.

For either program, it is not enough just to say you can’t work because of your health problems—you must be able to prove it with solid medical evidence. (for more, read our blog post “The Secret to Winning your Disability Case”).

You must also qualify based on work credits or financial need. The road to being awarded disability benefits can be complex, confusing and difficult to navigate, and in the end, if you are awarded benefits, monthly checks are very modest.

In Illinois, the average SSDI benefit payment is about $1,438 a month, which equals about $17,256 a year. According to MIT living wage calculations, the living wage for a single person residing in Cook County is $39,990, which means that SSDI benefits only cover about 43% of the cost of living. This is for a single person; the cost of living is, of course, considerably higher for couples and families with children.

SSI benefits are even lower. The maximum payment amount is known as the Federal Benefit Rate (FBR), and it changes each year, based on inflation and other factors. The maximum 2023 benefit amount for individuals who are eligible for SSI is $914 per month.

For married couples in which both partners receive SSI, the combined monthly maximum benefit is $1,371. The annual total for a couple receiving SSI benefits is $14,580, well below the federal poverty level of $19,720.

But that is the maximum benefit, and many SSI recipients don’t receive the maximum benefit. This is because the Social Security Administration factors in all sources of your income and all your financial resources when setting your monthly SSI payments. (For more information, see our article, Do My Assets Affect My Ability to Receive Disability Payments?)

You can learn more about the ins and outs of Social Security Disability by exploring the Nash Disability Law website. There, you will find an extensive collection of informative articles, and a special web section which details how the SSA evaluates specific qualifying impairments for disability benefits.

All of this information is free for you, whether you are a client of our disability law firm or not. Our disability lawyers can also give you a free evaluation of your specific situation.

Call or email us at Nash Disability Law We have Social Security Disability attorney offices in Chicago and Palos Hills and we can help you avoid costly disability benefits mistakes We only get paid if you win your case.