Residual (partial) disability benefits: How the Monthly Number Is Actually Calculated
Residual (partial) disability benefits: basis = pre-disability vs current earnings, ratio 50% of loss, taxed follows primary claim.

| Wage basis | Pre-disability vs current earnings |
|---|---|
| Replacement ratio | 50% of loss |
| Tax treatment | Follows primary claim |
Residual benefits pay the percentage of income you lost, not a flat check. A surgeon back at 50% capacity earning 60% of prior income collects roughly half the full benefit.
The calculation
| Parameter | Detail |
|---|---|
| Benefit component | Residual (partial) disability benefits |
| Wage basis | Pre-disability vs current earnings |
| Ratio | 50% of loss |
| Tax treatment | Follows primary claim |
Two policies can both say ‘60%’ and pay thousands apart — the difference lives in the wage basis and the tax line, not the headline ratio.
Worked example
Take a $120,000 package that is $90,000 base plus $30,000 bonus. A ‘salary’ policy pays 60% of $90,000 = $4,500/month. An ‘income’ policy paying 60% of documented average earnings pays $6,000. Same person, same premium tier — $18,000 a year apart.
What to check in your contract
- The word after ‘disability income’ — salary, earnings or income.
- Whether employer-paid premiums make benefits taxable.
- Whether the ratio applies before or after SSDI offset.
Residual (partial) disability benefits: the headline ratio is marketing — the wage basis and tax line are the contract.