Social Security benefits are most commonly associated with retirees. But approximately 9 million working-age Americans receive Social Security Disability Insurance, or SSDI. In fact, the Social Security Administration estimates that a worker born in 2000 has about a 1 in 4 chance of becoming disabled before reaching their full retirement age of 67.
SSDI recipients receive the same cost-of-living adjustment, or COLA, that other beneficiaries receive. That means in 2023, anyone who receives Social Security disability benefits will see their monthly check increase by 8.7%.
Here's what the upcoming COLA means for SSDI beneficiaries.
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What's the maximum SSDI benefit in 2023?
In 2023, the maximum Social Security disability benefit is $3,627 a month -- $282 more than in 2022. The maximum SSDI benefit in any given year is the same as the maximum Social Security benefit at full retirement age, which is 67 if you were born after 1959. That's because benefits for those who qualify under Social Security's strict rules for disability are calculated as if the worker already reached full retirement age.
But the average SSDI benefit is significantly lower. Even when you factor in 2023's unusually high COLA, the average monthly disability benefit will be just $1,483. That's $344 lower than 2023's average Social Security retirement benefit of $1,827 a month.
Although Social Security treats retired workers as though they've already reached retirement age, disability benefits tend to be lower because Social Security uses your average indexed monthly earnings to calculate both types of benefits. Your highest-earning years tend to come later in your career. Workers with disabilities tend to miss out on their most lucrative years of work, so average SSDI benefits are lower.
What if disability benefits aren't enough?
Whether you receive SSDI or retirement benefits, surviving on Social Security alone can be a challenge. If you're struggling with expenses, use benefits.gov to see if you could be eligible for other forms of assistance. The online form takes 10 to 30 minutes to complete. After you've been eligible for SSDI benefits for 24 months, you'll also qualify for Medicare, which should provide some relief.
If you can work part-time, you can do so without jeopardizing your benefits, but you can't engage in what Social Security calls "substantial gainful activity." In other words, you'll face strict income limits. In 2023, you can earn up to $1,470 a month if you're not blind or $2,460 a month if you're blind. Earnings above these amounts will make you ineligible for disability benefits.
However, there is an exception: Social Security allows disability recipients a nine-month trial work period, during which they can test their ability to work without affecting benefits. During these nine months, you can receive your full SSDI payment, no matter how much you earn. You can use your nine months consecutively or spread them out over a 60-month period. Social Security will count any month in which you earn at least $1,050 (or work more than 80 hours if you're self-employed, regardless of earnings) as one of your trial work period months in 2023.
Losing benefits is a real concern, given that about two-thirds of initial SSDI applications are denied. Many workers with disabilities experience ups and downs in their conditions. They may be able to work temporarily or on a limited basis, but their disability may preclude them from holding a permanent, full-time job.
The bottom line: If you're on SSDI and find that your 2023 benefit isn't enough, you do have options for earning money if you're able to perform some work. But it's essential that you follow Social Security's complex rules. Otherwise, you could risk your disability benefits.
