The approval of a claim is only the first step in receiving Social Security disability insurance benefits. After a Portland resident is approved for benefits, the resident must wait a full six months for the first benefit check to arrive. Subsequent benefits are paid after the month due. For example, May benefits are paid in June.
The benefit dollar amount that a disabled Portland resident receives is determined by the person’s lifetime earnings. In some cases, benefit amounts will be affected by other monies received, such as workers’ compensation and income from government and foreign sources.
For a disabled individual who receives benefits for two years, Medicare enrollment is automatic. Hospital insurance under Medicare comes at no cost. Additional coverage for outpatient medical insurance and prescription coverage requires monthly premiums.
Social Security disability benefits may be subject to federal tax, especially for those with high incomes, although there is an 85 percent ceiling on all benefit taxation. To calculate taxation, the Internal Revenue Service considers combined income which is a total of nontaxable interest, adjusted gross income and half of Social Security benefits.
A person who files federal taxes as an individual with a combined income of $25,000 to $34,000 may be taxed on up to half of the benefits. Benefit taxation is 85 percent on higher incomes. Benefits for those who file joint tax returns with a combined income – including both spouses – of $32,000 to $44,000 may be taxed at up to 50 percent. Above that, the 85 percent rate applies.
Every January, the Social Security Administration releases statements to those who have received benefits during the previous year, a summary to help calculate federal taxes. If benefits are expected to be taxed, it is sometimes easier to file quarterly estimates with the IRS or arrange to have taxes withheld from benefits.
Source: Social Security Online, “When your benefits start.”