How Are SSDI Benefits Calculated for Eligible Workers?
A severe medical condition is stressful enough without having to worry about how you'll pay your bills. When working isn't an option, seeking financial support can feel incredibly intimidating, especially when you don't know how the Social Security Administration determines the amount you may receive. Having a knowledgeable SSDI attorney on your side can make a major difference in the outcome of your case.
At Leavitt Meunier Law LLC, we're dedicated to helping you get the SSDI benefits you need. Understanding how these benefits are calculated can help you better manage your expectations. Our team can help you review your covered earnings history, Average Indexed Monthly Earnings, Primary Insurance Amount, and other factors that can affect your final payment.
From our firm in Metairie, Louisiana, we serve clients in Alexandria, Houma, Baton Rouge, and New Orleans, as well as Hattiesburg and Gulfport, Mississippi. Contact us today to schedule an initial consultation.
The Basics of Benefit Calculations
When applying for SSDI, you may believe that the severity of your illness dictates your monthly check. However, the Social Security Administration bases the amount of your SSDI benefit primarily on your covered earnings history. Severity determines whether you qualify, not how much you receive.
To determine this amount, the administration uses a mathematical formula rather than looking at your medical records. The calculation is based on your covered earnings reported to the Social Security Administration. We can review your work history to confirm that your record is accurate.
You'll also have to complete a mandatory waiting period before you receive your first check. The administration requires a five-month waiting period that begins on your established disability onset date. Our team of SSDI attorneys can evaluate your work history to confirm your eligibility.
Finding Your Average Indexed Monthly Earnings
The first major step in the calculation process involves finding your Average Indexed Monthly Earnings (AIME). This number represents your historical income adjusted for wage growth over time. Because inflation changes the value of a dollar over time, this adjustment keeps things fair for older wages.
The administration uses a strict process to calculate your AIME. This calculation looks at the span of your career to identify your earning years, but the exact timeline depends on your age when you became disabled.
Determining your calculation years: Instead of using a flat number of years for everyone, the agency counts the years from age 22 up to the year you became disabled and then excludes a set number of your lowest-earning years to find your base computation period.
Adjusting for historical inflation: Your applicable past earnings are adjusted using SSA's wage-indexing rules.
Calculating the monthly average: The administration totals these adjusted earnings and divides them by the total number of months within your specific computation period to determine your final monthly figure.
Because this calculation is based on your age, younger workers generally have fewer years included in the computation period. But if your computation period includes years with no earnings, those years can be included as zero-earnings years, which may reduce your AIME. Consult our SSDI benefits attorneys if you need help reviewing your earnings record for any costly errors before you apply.
Applying the Primary Insurance Amount Formula
Once the agency determines your AIME, they'll use that number in another detailed formula. This next step calculates your Primary Insurance Amount or PIA. The PIA is the basic amount used to determine your monthly SSDI benefit before any other deductions apply.
To calculate your PIA, the administration splits your AIME into three distinct portions. These portions are separated by specific numerical thresholds known as bend points:
Calculating the first portion: The formula applies the highest percentage to the portion of your AIME up to the first bend point.
Calculating the middle portion: The formula applies a lower percentage to the portion of your AIME between the first and second bend points.
Calculating the final portion: The formula applies the lowest percentage to any portion of your AIME above the second bend point.
The bend points generally change every year based on changes in the national average wage index. We can help you calculate your projected PIA, so you have a clear expectation of your monthly payments.
Additional Factors That Affect Your Payment
Sometimes, your final monthly check differs from your basic PIA calculation. Certain factors can affect the amount you receive, while others may change your total household benefits over time. Our team can help you make sense of any potential changes.
Several elements influence the final amount you receive in your bank account each month. The administration applies these rules when determining applicable benefit amounts.
Accounting for other public benefits: Receiving workers' compensation or other public disability payments can lower your final benefit amount. This happens when the combined benefits exceed the applicable federal limit, generally the higher of 80% of your average current earnings or your family's total Social Security benefit before reduction.
Applying annual cost of living adjustments: Your payments may increase each year to keep up with inflation rates.
Adding family maximum benefits: Your spouse and dependent children may qualify for auxiliary benefits based on your work record.
For disability benefits, the family maximum is generally 85% of the worker's AIME, subject to a floor of 100% of the PIA and a ceiling of 150% of the PIA. We will review all your income sources to get an accurate estimate of your monthly benefit.
Talk to a Compassionate SSDI Benefits Attorney Today
Dealing with a debilitating illness is hard enough without having to seek benefits from the government. We understand how stressful it can be to wonder how you'll afford basic necessities while waiting for a decision. You shouldn't have to face this difficult process alone.
At Leavitt Meunier Law LLC, we can help shoulder the burden by handling the details of your claim. From our office in Metairie, Louisiana, our team assists clients in Alexandria, Houma, Baton Rouge, and New Orleans, as well as Hattiesburg and Gulfport, Mississippi, in calculating the SSDI benefits they may be entitled to. Contact us today to schedule a consultation.