How Are Social Security Disability (SSDI) Benefits Calculated in NJ?

Social Security Disability Insurance (SSDI) is a program that provides benefits to workers who have become unexpectedly injured before reaching the age of retirement. You can earn coverage under this program by working and paying social security taxes on your earnings.

In New Jersey, your SSDI benefits are calculated based on your work history, earnings record, and the severity of your disability. Unfortunately, the process of applying for these benefits can complicated. There are multiple reasons that the Social Security Administration (SSA) may choose to deny your claim.

If you need to apply for SSDI benefits in New Jersey, get help from our experienced New Jersey disability lawyers at Young, Marr, Mallis & Associates by dialing (609) 557-3081.

Calculating SSDI Benefits in New Jersey

SSDI benefits in New Jersey, like in other states, are calculated based on several factors. These factors can include an applicant’s work history, earnings record, and the severity of their disability.

The Social Security Administration (SSA) will follow certain guidelines when awarding these benefits. Still, each case is unique. Our experienced Mount Laurel, NJ disability attorneys can review your application to determine how each of the following factors may affect the amount of benefits awarded in your case:

Work Credits and Eligibility

To qualify for SSDI benefits, an applicant must have accumulated a sufficient number of work credits. Work credits are earned by working and paying Social Security taxes. The number of work credits required for eligibility depends on the applicant’s age at the time of disability onset. In general, younger individuals require fewer work credits than older individuals. The SSA determines an applicant’s eligibility based on their work history and the number of work credits they have earned.

Average Indexed Monthly Earnings (AIME)

After establishing eligibility, the SSA calculates the applicant’s Average Indexed Monthly Earnings (AIME). The AIME is determined by adjusting the applicant’s lifetime earnings for inflation using the national average wage index. The SSA considers the applicant’s highest-earning years, up to a maximum of 35 years, when calculating the AIME. The more an applicant has earned during their working years, the higher their AIME will be.

Primary Insurance Amount (PIA)

The AIME is then used to calculate the applicant’s Primary Insurance Amount (PIA). The PIA is the base amount of SSDI benefits the applicant is entitled to if they reach full retirement age. Full retirement age varies depending on the applicant’s birth year. For example, for individuals born in 1960 or later, full retirement age is 67. The SSA applies a formula to the AIME to determine the PIA.

Disability Benefit Calculation

The next step involves adjusting the PIA to account for the applicant’s disability and age at the time of disability onset. The SSA uses a formula to calculate the applicant’s disability benefit, which takes into consideration the PIA and the applicant’s disability onset date. The formula reduces the PIA based on the number of months between the full retirement age and the disability onset date. The reduction is typically a fixed percentage for each month.

Family Benefits

In certain cases, family members of the disabled worker may also be eligible for SSDI benefits. Spouses, children, and even divorced spouses may be entitled to auxiliary benefits based on the disabled worker’s record. The total amount of benefits payable to the family is subject to a maximum limit known as the Family Maximum Benefit. If the sum of all family benefits exceeds this limit, each family member’s benefit is reduced proportionately.

Cost-of-Living Adjustments (COLA)

SSDI benefits are subject to annual Cost-of-Living Adjustments (COLA) to account for inflation and rising living expenses. The SSA determines the COLA based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The COLA percentage is applied to the applicant’s benefit amount to ensure that it keeps pace with the cost of living.

Common Reasons Why SSDI Applications are Denied in New Jersey

There are many potential reasons why your application for SSDI benefits may be rejected. For instance, the following are common reasons why SSDI applications are denied in New Jersey:

Insufficient Medical Evidence

One of the primary reasons for denial is a lack of sufficient medical evidence to support the claimant’s disability. This could occur if the medical documentation fails to demonstrate the severity and duration of the impairment, or if there is a lack of medical records altogether. It is crucial for applicants to provide detailed medical records, including diagnoses, treatment history, and objective medical evidence, to support their claim.

Failure to Meet the Duration Requirement

To qualify for SSDI benefits, the disability must be expected to last for at least 12 months or result in death. If the medical evidence does not establish the anticipated duration of the impairment or if the condition is expected to improve within 12 months, the application may be denied. It is important to provide medical documentation that clearly indicates the long-term nature of the disability.

Engaging in Substantial Gainful Activity (SGA)

SSDI benefits are reserved for individuals who are unable to engage in substantial gainful activity, meaning they cannot work and earn above a certain income threshold. If the Social Security Administration determines that the claimant’s work activity exceeds the SGA limit, their application may be denied. It is crucial to provide accurate and detailed information about any work activity to avoid this denial reason.

Failure to Follow Treatment

If an applicant fails to comply with prescribed medical treatment without a justifiable reason, their SSDI application may be denied. The Social Security Administration expects individuals to undergo appropriate medical treatment to improve their condition or alleviate symptoms whenever possible. Failure to follow prescribed treatment may raise doubts about the severity of the disability and its impact on the ability to work.

If You Need to Recover SSDI Benefits in New Jersey, Our Law Firm Can Help

Seek guidance from our experienced Trenton, NJ disability lawyers by calling Young, Marr, Mallis & Associates at (609) 557-3081 to review your case for free.