Disability benefits provide crucial financial support for Americans who are unable to work due to a physical or mental condition. With the cost of living varying significantly across the United States, the value of disability payments also differs greatly depending on which state you live in. Some states have much higher disability benefit rates than others, allowing disabled residents to cover more of their expenses.
So which states pay the most for disability? The states with the highest disability benefit payments tend to be those with a high cost of living, especially housing costs. States on the east and west coasts, like California, New York and Massachusetts, usually offer more generous disability benefits. Midwestern and southern states tend to have lower disability payments on average.
When comparing disability benefit levels between states, several factors need to be considered:
- Cost of living differences
- Average wages
- State budget situations
- Political priorities
While a high benefit rate looks attractive, you also need to balance that against taxes, other costs, and the local job market. A higher disability payment doesn’t help much if few suitable jobs are available.
We’ll look at how benefit rates vary across the country, both for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Comparing average payment levels offers insight into which states provide the most financial assistance if you qualify for disability benefits.
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) provides benefits for people unable to work due to disability who previously paid Social Security taxes when employed. Your benefit amount is based on your prior earnings record, up to a program maximum.
In January 2023, the national average SSDI payment is $1,358 per month. But averages range from $1,150 in Mississippi to $1,824 in Massachusetts. Below are the top 10 highest paying states for SSDI benefits.
Top 10 Highest Paying States for SSDI
| Rank | State | Average SSDI Payment |
|---|---|---|
| 1 | Massachusetts | $1,824 |
| 2 | New Jersey | $1,730 |
| 3 | New Hampshire | $1,710 |
| 4 | Maryland | $1,674 |
| 5 | California | $1,656 |
| 6 | Alaska | $1,648 |
| 7 | Connecticut | $1,611 |
| 8 | Washington | $1,608 |
| 9 | Rhode Island | $1,580 |
| 10 | New York | $1,556 |
The regional pattern is clear with this top 10 list. Eight of the ten highest paying states are in the Northeast or on the West Coast. These parts of the U.S. generally have higher wages, so lifetime earnings and disability benefit calculations tend to be greater as well.
Given the high cost of living in places like Massachusetts and California, the higher payments help offset expensive housing, food, healthcare, and other necessities. The only exceptions to the coastal trend are Alaska and New Hampshire, which have very high costs of living for more rural states.
At the lower end for SSDI benefits are southern states like Mississippi, Arkansas, Alabama, and Louisiana, where average monthly payments range from $1,150 to $1,300. Benefits in these states are constrained by lower average incomes and consequently lower lifetime Social Security contributions.
However, the lower cost of living in southern states means the lower disability payments still provide valuable income support in places like Mississippi. Overall, SSDI benefits replace about 40% of past earnings regardless of which state you reside in.
Supplemental Security Income
Supplemental Security Income (SSI) is a separate disability program that does not depend on your work history. SSI pays benefits to low-income disabled adults and children who have limited income and assets.
Unlike SSDI, SSI benefits are not directly tied to your prior earnings. But where you live still impacts payments, as states can supplement the federal SSI benefit.
The current federal SSI payment for an individual is $914 per month in 2023. But some states add additional funding on top of the federal amount. These state supplements can significantly increase total SSI benefits.
Below are the top 10 highest paying states for combined federal and state SSI benefits. State supplements are responsible for the higher monthly payments.
Top 10 Highest Paying States for SSI
| Rank | State | Total SSI Payment |
|---|---|---|
| 1 | California | $1,153 |
| 2 | Massachusetts | $1,136 |
| 3 | New York | $1,129 |
| 4 | Vermont | $1,119 |
| 5 | New Jersey | $1,074 |
| 6 | Washington | $1,046 |
| 7 | New Hampshire | $1,042 |
| 8 | Nevada | $1,030 |
| 9 | Connecticut | $1,020 |
| 10 | Alaska | $1,014 |
The SSI list includes many of the same high-payment states as the SSDI rankings. Coastal states like California, New York, New Jersey, and Washington provide significant state supplements to enhance the federal SSI benefit.
Vermont and Nevada are exceptions with higher SSI payments than their SSDI averages. And some states like Maryland and Rhode Island rank high for SSDI but don’t supplement SSI much.
Southern states generally pay lower SSI benefits due to smaller state contributions. But the cost of living is also lower in those areas compared to California or New York.
Cost of Living Considerations
Simply looking at the benefit rate paid doesn’t give the full picture of how far disability payments will go in each state. You also have to consider what living expenses cost in the area.
$1,800 per month in SSDI benefits provides a different standard of living in California compared to Alabama. While you may receive more dollars in a high-paying state, goods and housing may be much more expensive.
Some cost of living data for the top paying SSDI states:
| State | Average SSDI | Cost of Living Index |
|---|---|---|
| Massachusetts | $1,824 | 135.5 |
| New Jersey | $1,730 | 127.3 |
| New Hampshire | $1,710 | 106.4 |
| Maryland | $1,674 | 126.1 |
| California | $1,656 | 139.6 |
States like Maryland, Massachusetts, and California have very high cost of living indexes. So while the monthly dollar amounts appear generous, prices for housing, food, and other expenses are elevated in these areas.
The cost of living differs less dramatically between states for SSI payments. But it is still a relevant factor when deciding where to live on a limited, fixed income.
Moving to a state with a high benefit rate can backfire if you underestimate local prices. It’s important to run a detailed budget to determine if the higher disability payment will adequately cover your costs.
Other Factors Impacting State Comparisons
Aside from cost of living considerations, here are other variables that affect state comparisons:
Taxation of Benefits
Several states exempt Social Security disability benefits from state income taxes, while other states fully tax this income. For example, California does not tax Social Security, keeping more of your monthly benefit. But New Jersey taxes disability income at the same rate as wages.
Housing Costs
Housing is typically the largest monthly expense, especially rent or mortgage payments. While rents are higher in places like New York City, some rural parts of high-paying states have more affordable housing markets. You need to research specific areas rather than just the state as a whole.
Healthcare Costs
If you have significant medical bills, states with expanded Medicaid coverage under the Affordable Care Act may offer better subsidies and lower out-of-pocket costs. Health expenses can take a big bite out of disability income.
Support Programs
Some states and cities have robust disability advocacy communities as well as public and nonprofit assistance programs. Those support networks help offset limitations of disability benefits. Research what resources each state offers disabled residents.
Employment Opportunities
While unable to work full-time, some people receiving disability do hold part-time jobs for extra income and as part of vocational rehabilitation efforts. More jobs and disability-friendly employers provide work possibilities.
Conclusion
Deciding where to live on long-term disability benefits involves more than just comparing payment amounts. You want a location where your particular monthly income can fund your expected lifestyle.
States that pay the most in cash may not always align with a high satisfaction quality of life after accounting for expenses. Run the numbers for your situation before prioritizing states with the highest benefits.