Disability Law Group discusses how social security disability benefits are calculated.

How Are Social Security Disability Benefits Calculated?

The amount of Social Security disability benefits you are entitled to is based on your covered earnings, which are the wages that you paid Social Security taxes on prior to your disability. Social Security Disability Insurance (SSDI) is a program that provides benefits to certain disabled individuals who are no longer able to work. In order to be eligible for SSDI, you must: (1) be insured under the SSDI program and (2) meet the Social Security Administration’s (SSA’s) disability definition. However, if you qualify and receive disability payments from other sources, your SSDI benefits payment may be reduced. Below is an overview of the way SSDI benefits are calculated.   

How benefits are calculated 

Although the actual formula used to calculate SSDI benefits is extremely complicated, the SSA calculates SSDI benefits by using one’s Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA). 


The first thing SSA does when calculating a benefit amount is to determine an applicant’s AIME. In order to do this, the SSA adjusts the applicant’s lifetime earnings to account for the increase in general wages that occurred during the years he or she worked. The SSA uses up to 35 of an applicant’s working years in making this determination. The SSA then takes the years with the highest indexed earnings, adds them up, and divides them by the total number of months for those years. This calculation is then rounded down to determine the applicant’s AIME.


An applicant’s Primary Insurance Amount (PIA) is the base amount of his or her benefits. The SSA uses a total of three percentages of an applicant’s AIME to determine his or her PIA. The amounts that result from this calculation are called bend points, and these are updated every year to reflect the national average wage index. For example, the PIA for an individual who becomes eligible for SSDI in 2019 is the total of the following:

  • 1.90% of the first $926 of an applicant’s average monthly earnings
  • 2.32% of an applicant’s average monthly earnings over $926 through $5,583
  • 3.15% of an applicant’s average monthly earnings over $5,583

Although the process of calculating one’s monthly SSDI benefits is complicated, the SSDI application process doesn’t have to be—particularly with the help of a Michigan disability law attorney. Therefore, if you are unable to work due to a medical condition, the skilled Michigan disability law attorneys at Disability Law Group are here to help you get the benefits you deserve. At Disability Law Group, our experienced attorneys will assist you with every step of the Social Security disability benefits process, from filing the initial application to appealing your denial in court if necessary. If you live in Macomb County, Oakland County, Wayne County, or elsewhere in Michigan and would like to apply for disability benefits or fight a denial, we are on your side. At Disability Law Group, disability is all we do. Please contact us as soon as possible for a free consultation.