How is Social Security Disability Calculated? | Your Complete Guide

by | Aug 22, 2023 | SSD Benefits

If you are wondering, “how is Social Security Disability calculated?” you are not alone. One of the top questions we are asked about Social Security Disability benefits is how the benefits are calculated. When you’re ready to begin the application process, it is helpful to understand how your benefits will be calculated.

At Disability Apply, we are qualified experts to assist you with the process of being approved for disability benefits. We have the skills and knowledge necessary to prove your case to the Social Security Administration (SSA). Contact us for immediate assistance or keep reading to discover how an SSD benefits expert can support your case.

How Disability Benefits Are Determined

Social Security disability benefits are calculated based on a number of factors. To determine if you qualify, the SSA takes into account various factors to determine whether you qualify for Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) benefits. For most people, the medical requirements are the same for both programs and disability is determined through the same process.

Once you have established your disability with the SSA, the amount you receive each month is determined based upon many factors such as earnings history, work history, current income, and total income, as well as which benefits you are eligible for (SSDI or SSI).

You can also use the SSA online benefits calculator to determine a rough estimate of your monthly allowance. It is important to note that these calculators cannot guarantee that you will receive that amount or that you will meet the eligibility requirements.

Understand the Average Indexed Monthly Earnings

In 2019, the Social Security Disability monthly payment average was $1,234 per month. Some high income individuals received as much as $2,600 each month.

The range is due to the algorithm the SSA utilizes based on your earnings history to determine the exact amount you will receive.

To calculate the amount you will be receiving per month, the SSA will use your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA) to arrive at the precise allowance. We know this can be difficult to determine, which is why many individuals opt to base their payment on the estimated benefits calculator.

– Your AIME is centered on up to 35 years of your work earnings history. The equation the SSA utilizes for this takes the highest indexed earnings from those years, adds them together, and then divides them by the number of months in those years. The final number is rounded down to provide your AIME amount.

– The SSA will also use your PIA to calculate your monthly benefits. The PIA is based upon the sum of three separate percentages of portions of AIME. Sounds confusing? It definitely is confusing!

Here is a further break down of the PIA addition formula:

90 percent of the first $960 of your average indexed monthly earnings; PLUS
32 percent of your average indexed monthly earnings between $960 – $5,785; PLUS
15 percent of your average indexed monthly earnings over $5,785

The resulting figures are your “bend points,” which represent the base amount for your benefits.

For an easier calculation, the SSA provides the exact amount you would receive if you were to become disabled in your Social Security Administration statement. You should receive a copy of this document each year, or you can log into the SSA website to access it.

Potential Benefit Reductions to Consider

It is important to note that the AIME and PIA calculations do not include other considerations, which may reduce your benefits amount.

These offsets can include other forms of government-regulated disability payments that you may have previously or currently received, such as workers’ compensation settlements or temporary state disability benefits.

If you received either of these benefits, your monthly allowance is reduced to a maximum of 80% of your AIME amount.

We Are Ready to Help You!

We know that the Social Security Disability calculation can seem tricky and confusing. That’s why we specialize in handling Social Security Disability benefits cases!

We pride ourselves on being prepared and educated in disability benefits so that we can help you receive approval for benefits. It is our goal to take the stress and uncertainty out of the application process.

Disability Apply is your go-to for Social Security Disability representation. Contact us today.

Do You Qualify for Social Security Disability Benefits?

    1. Do you expect to be out of work for at least 12 months?

    2. Did you earn taxable income for 5 of the last 10 years?

    3. Are you currently receiving disability benefits?

    4. Have you seen a doctor within the last 12 months?

    5. Are you currently working with a disability advocate?

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