How SSD Benefits Are Calculated and What Affects Your Payment
If you’ve applied for or are considering applying for Social Security Disability (SSD) benefits, you likely have many questions beyond simply “will I qualify?” How much will you receive? Will it change over time? Does your spouse’s income matter? What about Medicare, taxes, or your ability to work part-time? This guide answers those questions in one place, drawing on common scenarios our Virginia SSD attorneys handle every day.
How Is the Amount of Your SSD Benefits Calculated?
Your monthly SSD benefit amount is entirely individualized — it is based solely on your own lifetime earnings record, not your household income or your spouse’s earnings. The Social Security Administration (SSA) uses a complex formula that averages your taxable earnings over your working years to arrive at your benefit amount.
In practical terms, most recipients receive somewhere between $1,200 and $2,500 per month, though the range varies widely based on work history. According to 2025 SSA data, the average monthly benefit for a disabled worker is approximately $1,580, and the maximum possible benefit in 2025 is $4,018 per month. Higher lifetime earners tend to receive higher monthly payments, while those with limited work histories — such as part-time workers or primary homemakers — may receive less.
Does My Spouse’s Income Affect My Benefit Amount?
No. Unlike some government assistance programs that are means-tested (meaning household income can reduce or eliminate eligibility), SSD is not calculated based on your family’s total income. Even if you and your spouse file joint tax returns, the SSA evaluates only your individual earnings record when determining your benefit. A high-earning spouse does not reduce your benefit, and a non-earning spouse does not increase it.
Do SSD Benefits Stay the Same Every Year?
Not necessarily. Each year, the SSA evaluates whether to authorize a Cost of Living Adjustment (COLA) for all SSD recipients. COLA increases are tied to the Consumer Price Index (CPI), a federal inflation measure. The SSA authorized COLA increases every year from 1975 to 2008, then skipped adjustments in 2009 and 2010 due to low inflation. For 2025, SSD recipients received a 2.5% COLA increase, bringing the maximum monthly benefit to $4,018. A 2.8% COLA increase is confirmed for 2026. These annual adjustments help ensure your benefits do not lose purchasing power over time.
Can SSD Benefits Be Paid Retroactively?
Yes, for Social Security Disability Insurance (SSDI) — though not for Supplemental Security Income (SSI). SSDI can be paid retroactively to cover part of the period between when your disability began and when you applied. You may receive retroactive benefits for up to 12 months before your application date, but only if your medical records confirm you were disabled during that period.
There is an important distinction between retroactive benefits and “back pay.” Retroactive benefits cover the time before you filed your application. Back pay covers the period from your application date until your benefits actually begin, minus the mandatory five-month waiting period. For applicants who must appeal a denial — a process that can take years — the back pay amount can be substantial. One practical note: receiving a large lump-sum payment in a single tax year can bump you into a higher bracket, though filing amended returns for prior years may help reduce that tax burden.
Are SSD Benefits Taxable?
Whether your SSD benefits are taxed depends on your total income. If your only source of income is SSD, you generally will not owe federal income tax on those benefits. However, if you have additional income — or a working spouse — a portion of your benefits may become taxable. The federal income thresholds for SSD taxation have remained consistent:
- If you are single and your total annual income exceeds $26,000, up to 50% of your SSD benefits may be taxable.
- If you are married and your joint income exceeds $32,000, the same 50% taxability threshold applies.
Workers’ compensation benefits, by contrast, are not taxable at the state or federal level for the vast majority of recipients — an important distinction for those pursuing both types of claims. VA disability benefits are also generally not federally taxable, though military retirement pay based on length of service typically is. A qualified tax adviser can help you navigate these distinctions.
Does SSD Approval Also Come with Health Insurance (Medicare)?
Yes — and for many applicants, Medicare eligibility is just as valuable as the monthly cash benefit. When you are approved for SSD, you become eligible for Medicare. However, for most recipients, there is a 24-month waiting period before coverage begins. Specifically, Medicare takes effect on the first day of your 25th month after your disability onset date (not simply your approval date).
Because the SSA determines your disability onset date based on when you first met the definition of disabled — which may be before you actually filed your application — your wait for Medicare may effectively be shorter than 24 months from your approval. There is one notable exception to the waiting period: if you are approved for SSD due to ALS (Lou Gehrig’s disease), you are automatically enrolled in Medicare the first month your benefits begin.
Medicare enrollment through SSD is automatic — you do not need to apply separately. A few months before your coverage begins, you will receive a letter from the SSA explaining your start date and the premium amount that will be deducted from your monthly payment. Note that Medicare comes with premiums, co-pays, and deductibles in most cases; it is not entirely free.
Can My SSD Benefits Ever End If My Condition Is Not Permanent?
Yes, this is possible. When you are approved for SSD, the SSA classifies your case based on whether your condition is expected to improve. If improvement is anticipated, your case may be labeled “Medical Improvement Expected,” and the SSA will review your status in 6 to 18 months to determine whether you still qualify.
If the SSA concludes you have recovered sufficiently to return to work, it will send a written notice explaining its reasoning and the date it plans to terminate your benefits. You have the right to appeal that decision, and you should always do so. An experienced SSD attorney can significantly improve your chances of a successful appeal and help you understand whether your condition truly no longer meets the SSA’s definition of disability.
Can I Receive Both SSDI and Unemployment Benefits at the Same Time?
Generally, no. SSDI is designed for people who cannot work due to a disability. Unemployment benefits are for people who are able to work and actively looking for a job. Applying for both creates a conflict: receiving unemployment can be used as evidence that you are capable of working, which a Social Security examiner may cite to deny your SSDI claim. Conversely, if you are receiving SSDI, that may be used to establish that you were not eligible for unemployment benefits — potentially requiring you to repay those amounts. Virginia is among the states that require repayment of unemployment benefits received while ineligible.
The simple rule: if you can work, apply for unemployment. If you cannot work due to a medical condition, apply for SSDI. If you are unsure which applies to your situation, consult with an attorney before filing either application.
Talk to an Experienced Virginia SSD Attorney
Navigating the SSD process is rarely straightforward. The rules around benefit calculations, retroactive pay, Medicare eligibility, taxation, and ongoing reviews involve complex federal regulations that interact in ways that are easy to misunderstand — and mistakes can cost you significantly.
The experienced SSD attorneys at Kalfus & Nachman PC have helped hundreds of clients in Norfolk, Hampton, Newport News, Portsmouth, Virginia Beach, and Roanoke understand their rights and maximize their benefits. Whether you are filing an initial application, appealing a denial, or concerned about a potential termination of benefits, we offer free consultations and handle SSD cases on a contingency basis — you pay no fees unless we win your case.
Call us today at (855) 880-8163 or contact us through our website to schedule your free consultation.