If you’re applying for Social Security Disability Insurance (SSDI), one of the most important questions on your mind is likely, “How much will my benefits be?” SSDI benefits are based on a calculation of your earnings during your working years, but there are several factors that go into determining the amount you will receive.
In this blog, we will break down how SSDI benefits are calculated and what you can expect in terms of payment. Contact PLBH at (800) 435-7542 for direct help from an SSDI attorney.
The Basic Formula for SSDI Payments
The Social Security Administration (SSA) uses your lifetime earnings to calculate your SSDI benefits. This calculation is done through a formula called the Primary Insurance Amount (PIA). The PIA is determined based on your Average Indexed Monthly Earnings (AIME), which is an average of your highest-earning years, adjusted for inflation.
The formula to calculate your benefits involves these steps:
- Determine Your AIME – The SSA takes your top 35 years of earnings, adjusts them for inflation, and calculates your average monthly earnings. This is your AIME.
- Apply the PIA Formula – The SSA then applies a formula to your AIME to calculate your monthly benefit. The formula is progressive, meaning that lower-income workers receive a higher percentage of their earnings replaced than higher-income workers.
The Progressive PIA Formula
The SSA uses a formula that replaces a higher percentage of your income at lower levels and a lower percentage at higher levels. In 2024, the formula works like this:
- 90% of the first $1,115 of your AIME
- 32% of your AIME between $1,115 and $6,721
- 15% of your AIME over $6,721
This means that if your average monthly earnings were low, you would receive a higher percentage of your earnings in benefits than someone with higher earnings.
Factors That Influence Your SSDI Payment Amount
In addition to your work history and AIME, several other factors can affect your SSDI payment amount:
1. Cost of Living Adjustments (COLA)
Each year, the SSA adjusts SSDI benefits to account for inflation through Cost of Living Adjustments (COLA). This ensures that the value of your benefits keeps pace with rising living costs. If inflation is high, you may receive a COLA increase to your monthly benefits.
2. Family Benefits
In some cases, your family members may also be eligible to receive SSDI benefits based on your record. For example, your spouse and dependent children may be eligible for additional benefits. However, there is a family maximum that limits the total amount of benefits your family can receive.
3. Work Credits and Your Age
The amount of work credits you’ve accumulated can affect your eligibility, but your age at the time of disability can also play a role. Younger individuals who have not had time to accumulate many work credits may qualify for lower benefits.
4. Past Employment in Non-Covered Jobs
If you worked in jobs that did not pay into Social Security (such as certain government positions), those years will not count toward your AIME, potentially lowering your SSDI payment.
How to Estimate Your SSDI Benefits
The SSA provides tools that allow you to estimate your SSDI benefits. You can use your Social Security Statement, which is available online through the SSA’s website, to see your estimated benefits based on your earnings history.
To access your statement:
- Visit the SSA’s website and create a “my Social Security” account.
- Once logged in, you can view your earnings history and see estimates for your SSDI benefits, retirement benefits, and other programs based on your work record.
Impact of Working While Receiving SSDI
If you’re receiving SSDI benefits and considering returning to work, it’s important to understand how your benefits may be affected. The SSA has specific rules about working while receiving SSDI:
- Trial Work Period (TWP): You are allowed a trial work period where you can work and earn income without losing your SSDI benefits. During this time, you can work for up to nine months while still receiving full benefits, regardless of how much you earn.
- Substantial Gainful Activity (SGA): After your trial work period, if your earnings exceed a certain amount (SGA limit), your benefits may stop. In 2024, the SGA limit is $1,470 per month ($2,460 for blind individuals).
Working while receiving SSDI benefits can be a complex process, and it’s important to speak with a legal professional at PLBH to fully understand how your benefits will be impacted.
Consult with an Attorney for Help with SSDI Benefits
Navigating SSDI benefits can be challenging, especially when it comes to calculating your payments and understanding how work or family factors may affect your benefits. The attorneys at PLBH are experienced in handling SSDI cases and can provide guidance tailored to your specific situation. If you need help with your SSDI benefits or have questions about your potential payments, contact PLBH at (800) 435-7542 for expert advice and representation.