The Social Security Administration (SSA) uses a standard formula to determine how much money you will receive in monthly Social Security Disability (SSD or SSDI) benefits. At the Daniel Berger Disability Law Office, we believe you should understand every part of your SSD benefits, including how the government figured the amount of your monthly benefits.
The best disability lawyer needs to know the equations and formulas that apply to every client’s case to ensure that they are receiving the maximum benefit for which they are eligible. Don’t miss out on any part of your SSDI or SSI benefit payments. Get help from an experienced SSDI lawyer.
First, Find Your Average Lifetime Monthly Earnings
The calculation the Social Security Administration uses to determine the amount of your monthly Social Security Disability benefit is the same one used to set your monthly Social Security retirement benefit. The process begins by identifying the 35 years in which you earned the highest “covered” income.
Covered income is the money you earned on which you paid Social Security taxes. These are the weekly payroll taxes you and your employer paid over all the years you worked. Self-employed people pay the entire tax themselves rather than splitting the tax payments with an employer. Any income you earned on which you did not pay taxes is not counted. The SSA does not count any covered income above a capped amount; the cap in 2021 is $142,800.
Those taxes withheld from your paycheck or paid by self-employed workers are what fund the Social Security Disability program. That is why no one can receive SSDI benefits unless they earned enough work credits to qualify.
Your 35 highest earning years’ income is indexed and averaged to determine your Average Indexed Monthly Earnings (AIME).
Second, Apply This Formula to Your Average Indexed Monthly Income (AIME):
Next, the SSA applies the formula shown in this section to your Average Indexed Monthly Income (AIME). Social Security Disability benefits and Social Security retirement benefits are designed to provide financial support to disabled workers and “old-age” retirees respectively. The programs are not intended to supply benefits equal to your former income level. Your benefits are scaled back according to the following equation:
- 90% of the first $1,024 of your average indexed monthly earnings (AIME), plus
- 32% of your AIME between $1,024 and $6,172, plus
- 15% of your AIME above $6,172, and
- round that figure down to the next lowest multiple of $0.10 if not already a multiple of 10.
The result is called your Primary Insurance Amount (PIA). Your PIA is the amount of monthly Social Security retirement benefits that you will receive at your full retirement age. Since your full retirement benefit is the same as your SSDI benefit, your PIA is the amount you will receive in SSD benefits each month you are eligible.
Let’s run this formula through an example.
Assume a worker’s average monthly income was $4,548. If we put that amount through the equation above, what would the worker’s monthly SSDI benefit be?
- 90% of the first $1,024 = $921.60, plus
- 32% of the AIME between $1,024 and $6,172 = $1,127.68, plus
- 15% of the AIME above $6,172 = $0.00 (remember, the AIME was only $4,548)
Add $921.60 + $1,127.68 = $2,049.28 rounded down to next lowest $0.10 = $2,049.20
Principal Insurance Amount (PIA) = $2,049.20
An Expert SSD Lawyer Will Help to Get You Maximum SSD Benefits
You are not expected to apply the formulas and equations to your lifetime earnings yourself. That is one of the services you rely on an experienced SSDI lawyer for. Expert SSD lawyers like Daniel Berger and the people at nydisability.com work with these figures every day of their professional lives. They don’t assume that the Social Security Administration has given you credit for all you deserve to receive.
The best SSD firms like the Daniel Berger Law Office specialize in disability law. Part of that expertise involves checking and double-checking basic facts and figures for any mistaken omission that might affect your proper benefit calculation. The job of a skilled Social Security Disability lawyer includes many tasks that only those with years of experience excel at. Our goal is to maximize your chances of winning the highest SSD benefit award.
Ask Us Any Question at No Charge – Always Free Case Evaluation
Don’t hesitate to contact nydisability if you have any questions about filing for SSD or SSI benefits. You have no obligation, and we would be happy to give you all the information you need. And remember that we provide FREE Case Evaluations, so you have no excuse to delay. Let us help you win SSD benefits.