Where Disability Benefits Are Worth the Most: How Your State Stacks Up

An older woman sits in a wheelchair by a window and looks at paperwork. — (Image credit: Getty Images)

Social Security disability benefits are awarded to people who cannot work due to an injury, illness or other health condition. Looking at Social Security disability benefits by state, Atticus found that benefits are never worth enough to cover someone’s living expenses. In fact, there are only three states where the average disability benefit is worth enough to cover even half of the cost of living. In some areas, the average benefit covers one-third or less of annual living costs.

There are two main types of disability benefits, both managed by the Social Security Administration (SSA).

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Social Security Disability Insurance, also called SSDI, exists for people who have previously worked and paid Social Security taxes, but can no longer work because of a medical condition. Supplemental Security Income, or SSI, is available to people who can’t work, have little or no work history and have very low income.

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According to data released in 2022, the average SSDI benefit for disabled workers is $1,358.30 per month. The exact value of someone’s monthly SSDI benefit depends on their work experience, but it’s possible for someone to earn up to a maximum of about $3,300 per month.

In January 2023, the Social Security Administration’s highest cost-of-living-adjustment (COLA) since 1981 went into effect, increasing benefits by 8.7% for all SSI and SSDI recipients.

“Even with the COLA increase, SSDI and SSI benefits do not match up to the livable wage in any state in the U.S.,” said Sarah Ashmore, attorney at Atticus.

The average monthly SSI check is worth $568.13, according to SSA data. However, SSI recipients are also capped at $841 of total monthly income in 2022. So a person with no outside income could qualify for the maximum SSI benefit, but a person who earns some monthly income would have their SSI benefit reduced by the amount they earn. SSI benefits are also reduced if someone has savings or valuable assets.

Learn more about how SSDI and SSI benefits are calculated.

Where Disability Benefits Go the Furthest

Because costs of living vary across the country, we found the average SSDI benefit in each state and then compared that to the state’s cost of living. We found that SSDI benefits aren’t enough to live on in any state.

Based on data from MIT’s Living Wage Calculator, which looks at typical expenses for people living in each state, the income needed to meet the cost of living in many areas is between two and a half and three times higher than the income an average SSDI recipient would earn.

In most states, someone whose sole source of income is SSDI would earn only enough to cover between 40% and 50% of living expenses. There are three states where SSDI covers at least half of someone’s living expenses, with Wyoming being the highest at about 52%. On the other end of the spectrum, there are six states where SSDI benefits would cover less than 40% of living expenses. Residents of Washington, D.C., would have the hardest time, with the average SSDI benefits covering just 30% of living expenses.

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Note that we looked at the living wage required for a single individual, with no children. Couples and people with children would experience higher costs of living.

Are Disability Benefits Enough to Live On?

For someone receiving Social Security disability, benefits are a vital source of income. Their monthly benefits may represent most or all of their income. However, in many places across the United States, it’s difficult or impossible to live on just disability benefits.

Someone who receives the average Social Security disability benefit ($1,358.30) for the whole year would receive $16,299.60 from SSDI. That’s only slightly more than the federal minimum wage (about $15,080 annually), and it’s well below the cost of living in every state.

In fact, someone with annual income of $16,299.60 from SSDI would barely earn at the federal poverty level, which is $13,590 for an individual in 2022. (The federal poverty line in Alaska is set at $16,990 for 2022, higher than what someone with the average SSDI payment would earn.)

Living on Social Security disability is difficult in most areas of the country, but there are some potential avenues for help. We’ve created this list of resources for people with disabilities, including places someone can reach out to for financial assistance, legal support or help with housing and health care. And if you need help applying for disability benefits — whether you’ve never had them before or lost them at any point — start with our complete guide to the disability benefits application.

What About SSI?

Supplemental Security Income benefits are often the primary source of income for recipients. But the strict income cap for SSI means that recipients can’t earn more than $841 of total income, including benefits and all outside income sources. For that reason, we considered how far that maximum benefit would take someone instead of looking at the average benefit.

Someone earning the maximum SSI benefit for the whole year would make just $10,092, about $5,000 less than the federal minimum and well below the cost of living in every state.

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Comparing the maximum SSI benefit to the cost of living in each state, SSI payments are enough to cover less than a third of living expenses. There are only 15 states where annual SSI benefits are worth at least 30% of the living wage, with South Dakota being the highest at just under 33%. Meanwhile, SSI benefits are worth less than 25% of living expenses in eight states.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Sarah is an attorney at Atticus Law, P.C. where she serves clients seeking Social Security Disability Insurance and worker’s compensation. Prior to joining Atticus, she was a civil public defender in Brooklyn, N.Y., where she represented low-income tenants in eviction proceedings, and a business reporter in Seattle, Wash., where she covered the booming Seattle tech industry. She is a graduate of the University of Washington School of Law.