If you’re applying for Social Security Disability Insurance (SSDI), one of the most important questions you may have is: How much will I receive in benefits? The amount of your SSDI payments is based on your lifetime earnings before your disability, rather than your specific medical condition or financial need. Understanding how SSDI payments are calculated can help you plan for your financial future and ensure you’re receiving the benefits you’re entitled to.
How SSDI Payments Are Calculated
SSDI benefits are based on your Average Indexed Monthly Earnings (AIME), which is a calculation of your lifetime earnings up to the point you became disabled. The SSA adjusts your historical earnings for inflation, then averages the highest-earning years to determine your AIME. Once your AIME is calculated, SSA applies a formula known as the Primary Insurance Amount (PIA) to determine your monthly benefit amount.
The formula is progressive, meaning that it replaces a higher percentage of your lower earnings and a lower percentage of your higher earnings. Here’s how the PIA formula works in 2024:
- 90% of the first $1,115 of your AIME.
- 32% of your AIME between $1,115 and $6,721.
- 15% of your AIME above $6,721.
Example Calculation
Let’s say your AIME is $4,000. Here’s how SSA would calculate your SSDI benefit:
- 90% of $1,115 = $1,003.50
- 32% of the amount between $1,115 and $4,000 (which is $2,885) = $922.20
Total monthly benefit = $1,003.50 + $922.20 = $1,925.70
Factors That Can Affect Your SSDI Payments
- Cost of Living Adjustments (COLA): Each year, SSA adjusts SSDI payments based on inflation. In 2024, SSDI recipients will see an increase of 3.2% due to COLA.
- Dependents: If you have dependent children or a spouse, they may be eligible to receive benefits based on your earnings record. Typically, dependents can receive up to 50% of your benefit amount, although the total family benefit is capped.
- Work History: SSDI benefits are higher for individuals who have worked longer and earned more over their lifetime. If you have a shorter work history or lower earnings, your SSDI benefits will be smaller.
Tips for Maximizing Your SSDI Benefits
- Provide a Complete Work History: When applying for SSDI, ensure that you provide SSA with a complete work history, including all employers and periods of employment. Missing information could lead to an underestimation of your lifetime earnings.
- Monitor COLA Adjustments: Stay informed about annual cost-of-living adjustments (COLA) to make sure your benefit amount reflects inflation increases. SSA typically announces COLA changes in the fall, and they take effect in January.
- Check for Dependent Benefits: If you have dependents, such as children under 18 or a spouse, make sure to apply for dependent benefits. This can increase your family’s overall monthly income.
Common Mistakes to Avoid
- Not Reporting All Earnings: If you’ve worked multiple jobs or had gaps in employment, make sure to report all earnings to SSA. Missing earnings could result in a lower AIME, reducing your monthly benefits.
- Failing to Understand Reductions: If you’re receiving other disability benefits (like workers’ compensation), your SSDI payments may be reduced due to an offset. Be sure to account for this when planning your finances.
How an Attorney Can Help
Calculating your SSDI benefits can be complex, especially if you’ve had multiple employers, self-employment income, or gaps in your work history. An experienced disability attorney can help ensure that your earnings record is accurate and that you’re receiving the correct benefit amount.
At Disability Law Group, we work closely with clients to ensure their SSDI payments are calculated correctly and to maximize the benefits they receive. If you have questions about your SSDI payments or need help with your disability claim, contact Disability Law Group today.
