Calculating SSDI benefits.

Social Security Disability Insurance may be a vital financial lifeline for a worker with a disability. Claimants must meet specific qualifications to receive SSDI benefits.

Calculation

Eligibility depends on a worker’s record of covered earnings. The Social Security Administration calculates average monthly income over a person’s working life which is adjusted for historical wage increases. It then places that figure into a formula for determining the primary insurance amount or full retirement benefit.

This PIA formula is designed to give proportionally higher benefits to lower wage earners.

SSA uses a formula for SSDI claims that is different than determining retirement benefits because a worker may receive a disability before they reach retirement age. The number of years used to calculate benefits depends on the age that a worker became unable to work because of an injury or illness.

Calculating the amount of earnings history depends on complicated requirements governing elapsed or computation years. It generally works as follows:

• SSA totals the number of years from the period that claimant turned 22 to the year before they received their disability.

• SSA then takes out one and five years. There a more drop out years based upon the length a claimant worked.

• This number is the how many of the claimant’s highest-earning years will be included into the PIA calculation.

Example

Consider a claimant who worked continuously since they were 21 but could no longer work after suffering a disability when they reached 60. The SSA would use that worker’s 33 best income years, indexed for wage trends, to calculate their PIA.

If the disability began when the worker was 50, the PIA would be the 23 highest-earning years. It would be 15 years if the disability began at 40.

A worker will receive 100 percent of their PIA if their SSDI claim is approved. But that full benefit is usually lower for SSDI recipients than for retirees because a worker’s higher-earning years can increase their calculated benefits.

The average monthly retirement and SSDI benefits were approximately $1,558 and $1,280 in Aug. 2021.

Other considerations

SSDI benefits may be reduced if a worker collects public disability payments such as Florida disability benefits or workers’ compensation. Benefits are not reduced for private disability benefits.

SSDI benefits convert to a retirement benefit, usually the same amount, when a recipient reaches full retirement age.

The earnings-based benefit is not used for the other SSA program for people with disabilities, Supplemental Security Income. SSI eligibility is based on financial need and benefits do not depend upon work histories.

Attorneys can help workers who receive a disability pursue their legal rights. They can assist them with navigating the SSDI application process.