No matter what the amount of your monthly Social Security Disability Insurance (SSD or SSDI) benefit payment is, everyone you talk to seems to get a different monthly benefit amount. When the size of every recipient’s benefit payment is different, it’s natural to wonder exactly how the payment amounts for each SSD recipient are determined.

Why are some people you know getting higher monthly SSD benefit payments and others are getting lower payments? That’s the question we at the Disability Law Office of Daniel Berger, Esq will answer in this blog post. Attorney Berger established an exclusive legal practice helping people living with disabilities apply for the SSD and SSI benefits they deserve. At NYDisability.com, Daniel Berger’s whole team of expert SSDI and SSI advocates are ready to answer your questions and fight for your benefits.

Social Security Disability (SSD) Payments EQUAL Social Security Full Retirement Payments

Some people are surprised to learn that the amount they receive as monthly SSD benefit payments is exactly the same as they would receive when they reach full retirement age (FRA) Social Security Retirement benefits.

SSDI benefits are reserved for people suffering long-term disabilities after having worked a substantial number of years. The fact that many, if not most, SSDI qualified “long-term” disabilities are actually permanent disabilities means that most SSD recipients will not return to work full-time. In a very real sense, receiving SSDI benefits marks the beginning of retirement. The benefits an SSD recipient receives before they reach full retirement age will become Social Security Retirement benefits once they do reach their FRA.

How Your SSDI Benefit Amount Is Calculated

The reason SSDI benefits are reserved for workers and former workers is that they are the people who paid into the system to fund the program. Payroll taxes are paid by employees and their employers (50% each) every pay period. Self-employed people pay the entire amount of the tax due.

Some workers earn more than others and so the amount of taxes they pay varies. It is your lifetime average monthly income that is the beginning point in determining the amount of your SSDI benefit.

Highest Earning 35 Years: The SSA takes your highest-earning 35 years total income and then “indexes” those figures to account for an increase in the cost of living over the years. The indexing formula adjusts each of your annual income totals with that year’s national average. Those 35 years of indexed annual incomes are added together and divided by 35, and then again by 12, setting your Average Indexed Monthly Income (AIME).

Average Indexed Monthly Income (AIME) to Primary Insurance Amount (PIA): Once your AIME is established, that figure for your average monthly income is run through the same formula used for every SSD recipient and every Social Security Retirement recipient. The figure produced by this formula is what is called the Primary Insurance Amount (PIA) which is the amount of your benefit.

The formula changes slightly every year to adjust for inflation. In 2022, the formula is as follows:

  • 90% of the first $1,024 of your AIME, plus
  • 32% of the amount of your AIME over $1,024 up to $6,172, plus
  • 15% of the amount of your AIME over $6,172
  • Round down to the whole dollar.

The figure produced by this formula is your Primary Insurance Amount (PIA).

Sample Case #1:

Assume that an SSD applicant named Sam has an average indexed monthly earning (AIME) in the amount of $4,379. Let’s run that AIME through the formula to find out Sam’s monthly SSD benefit amount:

  • 90% of the first $1,024 of Sam’s AIME ($4,379) = $921.60, plus
  • 32% of Sam’s AIME over $1,024 through $6,172 ($4,379 – $1,024 = $3,355 x .32) = $1,073.60, plus
  • 15% of Sam’s AIME over $6,172 = 0

$921.60 + $1,073.60 + 0 = $1,995.20 (rounded down to nearest whole dollar) = $1,995

Sam’s AIME of $4,379 produces a monthly SSD benefit amount of $1,995.

Sample Case #2:

Now, if a higher paid worker named Sue has an average indexed monthly earning (AIME) of $9,166, what will her Primary Insurance Amount (PIA) be?

  • 90% of the first $1,024 of Sue’s AIME ($9,126) = $921.60, plus
  • 32% of Sue’s AIME over $1,024 through $6,172 ($6,172 – $1,024 = $5,148 x .32) = $1,637.36, plus
  • 15% of Sam’s AIME over $6,172 ($9,126 – $6,172 = $2,954 x .15) = $443.10

$921.60 + $1,637.36 + 0 = $2,558.95 (rounded down to nearest whole dollar) = $2,558.

Sue’s AIME of $9,166 produces a monthly SSD benefit amount of $2,558.

Call NYDisability.com and Daniel Berger Disability Law Office for Help

Attorney Daniel Berger is among the most experienced SSD and SSI lawyers anywhere. He has devoted his legal career to helping all disabled people get the highest possible benefits to which they are entitled. Daniel Berger created NYDisability.com to ensure that everyone who is thinking about filing an SSD or an SSI claim has an immediate resource to turn to for all the information and assistance they need.