Ssdi Family Maximum

[jmack]

someone tell me, what exactly is considered "family maximum"? and does it include the disabled individual?

saved1

[Pete53]

The family maximum is the total amount that SSD will pay a family. I don't think it really applies unless multiple members are getting SSD at the same time.

If your kids are under 18 they usually pay them 1/2 of your award. If you have 3 kids its 1/3rd of the 1/2.

[Rich T]

Family max for SSDI is the max amount a family can receive. For wife and 3 kids ex. you get $900 mo, wife gets $450 for being mother of underaged kids, each kid gets $150 = total $1,800. When oldest kid reaches 18 that one goes to -0- others go up to $225. After youngest reaches 16 mother 's stops. Youngest kid gets SSDI on father's record until 18, or 19 while in school, but only 1/2 of father.

I had wife and 1 kid at home when wife went onto SSDI. The family max stayed and amounts were divided up. One for me, one for child, one for mother and one for wife's SSDI, BUT the family max stayed the same. We lost out as far as income went because wife had to start paying medicare premiums.

[Pete53]

Rich:

Thanks for your post. My wife did not get anything when I went on SSD but she was working. My kids shared half just like you said and it ended when they graduated from HS at 18 plus a few extra months. As one reached the cutoff the younger ones got more money.

[free_spirit_etc]

The family maximum is usually 150% of your benefit amount. The spouse (caring for kids under 16 or disabled) and kids (under 18) can get 1/2 of your award up to 150% of your benefits.

So if your benefit is $1000 - your spouse and kids can draw up to $500 each - UP TO a family maximum of $1500. This does NOT include YOUR OWN payment - You would get $1000. Your spouse would draw $500. One child or two children would draw $500 each. If you have 3 children - each would draw $333.33 (instead of the $500). When the oldest child quit drawing benefits - the younger two would get their benefits increased to $500 each.

Spouses CAN draw benefits if they work - but the benefits are offset by their earnings.

They deduct $1 from your benefits for each $2 you earned above $12,960.

So $500 a month in benefits would be $6,000 a year. If your spouse earned $15,000 a year

$15,000 - $12,960 = $2040 divided by 2 ($1 deduction for $2 earned over $12,960) = $1020

$6000 in benefits - $1020 (earnings offset) = $4980 / 12 = $415 per month payment to spouse.

The higher YOUR benefit - then the higher your spouse's 1/2 benefit - so the more they can earn before all their benefit is offset by their income.

I THINK if the spouse's benefits are offset by earnings that would make more $$ available to the kids - IF they weren't already drawing their own max amount. But you will want to check that out - as I am not sure.

So no matter how many dependents you have

1. They can only draw about 150% of your benefits combined.

2. They can only draw 50% of your benefit amount individually.

If your spouse is making big bucks - their working can definately be worth it.

But if your spouse is only making enough where their benefits are reduced - you might want to do some calculations to decide if their extra income is worth it.

i.e. Your spouse can earn $12,960 a year and draw full spouse benefits (1/2 your amount). Any amount over that needs to be thought out. If they are making $18,960 a year - that last $6,000 cuts the benefits they can recieve by $3,000 (1/2 deduction). So if they are buying gas, paying childcare, etc. etc. - you can decide if it is really worth it for them to make the extra $$$ or if they would be better off cutting back and earning less (and saving time, gas expenses, etc.)

Free

Free

[free_spirit_etc]

Here is a very detailed account on how they determine the actual family maximum benefits:

http://www.teamncpa.org/main/calc_content.php?PageID=9

Additional Benefits

If your spouse does not claim benefits in his or her own right, your spouse is entitled to a monthly payment equal to 50 percent of your PIA. Additionally, if you have dependent children at the time of your retirement, each child is also entitled to a benefit equal to 50 percent of your PIA. Thus it is possible that your PIA can be more than doubled, depending on your family situation. However, there is a maximum benefit your family can receive based on your own earnings.

To illustrate how the family maximum is applied, continue with the previous example by assuming that your adjusted preretirement income was $42,000 a year. Thus your Primary Insurance Amount (PIA) (hot link to the page in this document on How your monthly Social Security payment is calculated) is $1,377.30. Also assume that you have a non-qualifying spouse and one dependent child. In 2000 the family maximum formula limits the amount paid on a single PIA to:

150 percent of the first $679

Plus 272 percent of any amount between $679 and $980

Plus 134 percent of any amount between $980 and $1,278

Plus 175 percent of any amount above $1,278.

Thus the family maximum in this example is: (1.5 X $645) + (2.72 X ($980 - $679)) + (1.34 X ($1,278 - $980)) + (1.75 X (1,377.30 - 1,278) or $2,359.30.

Before applying the family maximum, the total payment would have been $2,754.60, but the formula caps the payment at $2,359.30.

If both you and your spouse qualify for Social Security, each of you can claim benefits in your own right. However, depending on earnings, one spouse may be better off claiming benefits as a dependent. Dependent children can receive benefits based on the parent's account with the highest PIA.

Formula for Maximum Family Benefits

The total monthly benefits which a worker's family may receive based on his or her primary insurance amount (PIA) are limited, in general, by a formula that depends on the PIA. There is a special formula for computing the maximum benefits payable to the family of a disabled worker.

Computation of the Old-Age and Survivor Family Maximum

The formula used to compute the family maximum is similar to that used to compute the PIA. It involves computing the sum of four separate percentages of portions of the worker's PIA. For 1999 these portions are the first $645, the amount between $645 and $931, the amount between $931 and $1,214, and the amount over $1,214. The dollar amounts in the formula which govern the portions of the PIA are frequently referred to as the "bend points" of the family-maximum formula. Thus, the family-maximum bend points for 1999 are $645, $931, and $1,214. See table of bend points below for amounts in years beginning with 1979.

Consequently, for the family of a worker who becomes age 62 or dies in 1999 before attaining age 62, the total amount of benefits payable will be computed so that it does not exceed:

150 percent of the first $645 of the worker's PIA, plus

272 percent of the worker's PIA over $645 through $931, plus

134 percent of the worker's PIA over $931 through $1,214, plus

175 percent of the worker's PIA over $1,214.

This total amount is then rounded to the next lower multiple of $.10 if it is not already a multiple of $.10.

Determination of the 1999 family-maximum bend points

The bend points for 1999 are obtained by multiplying the corresponding 1979 bend points by the ratio between the national average wage index for 1997, $27,426.00, and the average for 1977, $9,779.44. This amount is then rounded to the nearest dollar. For 1999, the ratio is 2.8044551. Multiplying the 1979 bend points of $230, $332, and $433 by 2.8044551 produces the amounts of $645.02, $931.08, and $1,214.33. These amounts are then rounded to $645, $931, and $1,214.

Bend Point Table

Dollar amounts (bend points) in PIA and family maximum formulas, 1979-1999

Dollar amounts in PIA formula Dollar amounts in maximum family benefit formula

Year First Second First Second Third

1979 $180 $1,085 $230 $332 $433

1980 194 1,171 248 358 467

1981 211 1,274 270 390 508

1982 230 1,388 294 425 554

1983 254 1,528 324 468 610

1984 267 1,612 342 493 643

1985 280 1,691 358 517 675

1986 297 1,790 379 548 714

1987 310 1,866 396 571 745

1988 319 1,922 407 588 767

1989 339 2,044 433 626 816

1990 356 2,145 455 656 856

1991 370 2,230 473 682 890

1992 387 2,333 495 714 931

1993 401 2,420 513 740 966

1994 422 2,545 539 779 1,016

1995 426 2,567 544 785 1,024

1996 437 2,635 559 806 1,052

1997 455 2,741 581 839 1,094

1998 477 2,875 609 880 1,147

1999 505 3,043 645 931 1,214

http://www.ssa.gov/OACT/COLA/familymax.html

Formula for Family Maximum Benefit

Updated October 18, 2006

Introduction The maximum family benefit is the maximum monthly amount that can be paid on a worker's earnings record. There is a special formula for computing the maximum benefits payable to the family of a disabled worker. The following, however, is devoted to the more common family maximum for retirement and survivor benefits.

Computation of the Retirement and Survivor Family Maximum The formula used to compute the family maximum is similar to that used to compute the PIA. It involves computing the sum of four separate percentages of portions of the worker's PIA. For 2007 these portions are the first $869, the amount between $869 and $1,255, the amount between $1,255 and $1,636, and the amount over $1,636. These dollar amounts are the "bend points" of the family-maximum formula. Thus, the family-maximum bend points for 2007 are $869, $1,255, and $1,636. See table showing bend points for years beginning with 1979 (table also shows PIA formula bend points).

For the family of a worker who becomes age 62 or dies in 2007 before attaining age 62, the total amount of benefits payable will be computed so that it does not exceed:

(a) 150 percent of the first $869 of the worker's PIA, plus

(B) 272 percent of the worker's PIA over $869 through $1,255, plus

© 134 percent of the worker's PIA over $1,255 through $1,636, plus

(d) 175 percent of the worker's PIA over $1,636.

We then round this total amount to the next lower multiple of $.10 if it is not already a multiple of $.10.

Amounts in formula Average wage indices For 1977: 9,779.44

For 2005: 36,952.94

Bend points for 1979 First: $230

Second: $332

Third: $433

Computation of bend points for 2007 First bend point

$230 times $36,952.94 divided by $9,779.44 equals $869.09, which rounds to $869.

Second bend point

$332 times $36,952.94 divided by $9,779.44 equals $1,254.51, which rounds to $1,255.

Third bend point

$433 times $36,952.94 divided by $9,779.44 equals $1,636.15, which rounds to $1,636.