Tuesday, June 17, 2014

Social Security & Workers compensation Benefit Calculation: How Do They Do That? (Part 1 of 2)

Social Security & Workers Compensation Benefit Calculation: How Do They Do That?
People wonder how much they will get paid if their claim is approved.  Naturally, the answer is: It Depends.

Calculation of benefits where the worker is entitled to State Disability and calculation of all cases where the claimant also has Workers Compensation is complicated to say the least.

This is an attempt to explain it.

Step 1: Determine the payment period.
If your case is approved, the cash benefit will be paid from your onset date while your claim is pending. That cash number is called the back benefit.  There are so many factors that influence the starting date and, thus, the back benefit; it is staggering.  As you read this, assume we’re talking about 12 months.  Using the national averages as a guide, you could expect $12,000 per year and expect 24 months in the back benefit period, for a total of $24,000 – IF there is no Offset.  If there is, you could end up with no back benefit at all.

What we want to know is will you actually get the full amount, or will it be reduced?

Step 2:  Determine which program applies to you?

Social Security Disability Insurance (SSDI) is not the same thing as Supplemental Security Income (SSI).  The most obvious difference is in the benefit amount.  In an SSI case, the maximum benefit in California today is $846.  That number changes almost month to month and certainly year to year.  Perhaps someday I’ll explain how to deal with SSI benefits. For now, I will concentrate on SSDI.

Who is covered under SSDI
SSDI is under Title II of the Social Security Act and pays benefits to disabled workers, widows of disabled workers, divorced widows of disabled workers (sometimes), children of disabled or retired workers and children who are now adults (age 22 or older) who became disabled before their 22nd birthday.  (There are other programs in Title II, like retirement.)

Step 3: Find out how many dollars you could get based on your earnings history.

To find out what your maximum benefit and your family’s maximum benefit are, go to www.ssa.gov and look for the area (currently in an oval on the left of the page) that says: “My Social Security”.  You will need to have an email address and a phone number to create the account.  You will create a login name and password. 

The safest passwords are those made up of what appear to be random letters and numbers plus one symbol. LgYL!0469 Looks random, but is really the first letter of a sentence I remember, an exclamation point and the last four numbers of my mother’s phone number. You really don’t want anyone getting into this account.  It has your SSN and will have your bank account numbers you want your benefits to go in. (It’s not my password, by the way.)

Once you create your account, you can find out what your benefit would be if you retired at various ages, what your benefit would be if you became disabled, and the family maximum which includes your minor or disabled children if you become disabled yourself or if you retire.

PIA:  Whatever that total number of dollars is is called your Primary Insurance Amount. (The National average is about $1,100 per month.)

You are entitled to the benefit no matter how much money you already have or property you own – not true with SSI.

Step Four:  Get some aspirin.  This may not kill you but it will probably give you a headache.

Step Five:  Do the math.

Stay tuned for next week's part 2 --- Offsets...
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