How are Social Security Disability Insurance (SSDI) Payments Calculated?
The amount of your monthly benefit amount is called the Primary Insured Amount (PIA). Your PIA is based on the amount of money that you have earned on which you paid Social Security taxes in the past. It is generally the same calculation used to compute a person’s retirement benefit at full retirement age. The formula used to calculate your monthly benefits determines your average indexed monthly earnings (AIME). To calculate your AIME, the IRS takes up to your highest 35 years of earnings and adjusts them for inflation. If you are approved for SSDI and remain disabled until your reach full retirement age, it will convert automatically to a retirement benefit.
Other family members can draw benefits from your work record in some situations (for example, minor child survivors’ benefits, widow(er) benefits, adult disabled child benefits). The amount of these benefits is also calculated based on your earnings record. The most that you and your family members can receive is called your family maximum, which may be as much as 1.5 times your PIA.
You can find a great deal of useful information, including your PIA if you set up a my Social Security Account. You can create an account at www.ssa.gov/myaccount/retire-calc.html. Social Security provides several calculators to assist you in understanding what your potential benefit might be at www.ssa.gov/benefits/calculators.
Also, be aware that your SSDI benefit may be reduced if you receive other public benefits, such as Worker’s Compensation and government-paid pensions, but are not affected by pensions from private employment.
If you are not eligible for SSDI benefits because you have not worked enough or worked enough recently, you may qualify for Supplemental Security Income (SSI) benefits. Eligibility for SSI benefits is determined by having income and resources below the regulatory thresholds and by being found “disabled.” These benefits are a fixed amount and may be reduced for various financial considerations.