How is the amount of monthly Social Security disability benefits (SSD) determined? This is a common question for disabled workers seeking these much-needed benefits.
SSD benefits are determined by your work-related income for which you paid the necessary Social Security taxes. This is the same way that the government calculates Social Security retirement benefits.
Average monthly income and PIA
For starters, the Social Security Administration (SSA) figures out your average monthly income during your working life. That number is then worked into a formula to find out your primary insurance amount (PIA) or full retirement benefit. The PIA formula is the same whether you seek to claim disability or retirement benefits.
For SSD claims, the government relies on different time frames to determine the PIA amount because many workers become disabled before they reach full retirement age. The years of income needed to determine this benefit depend on the age at which you became disabled and were unable to work due to injury or illness.
Determines highest-earning years
Here is a quick breakdown:
- The government counts your working years from when you became 22 to the time you became disabled and could no longer work.
- The SSA then discards one to five of those years.
- The remaining years are your “highest-earning years” used for the PIA calculation.
For example, say you worked until you were 60, but became disabled. Using the rules above, the SSA would rely on the 33 best years of your income to determine PIA. However, if the disability struck when you were 50, the PIA would be determined from your 23 highest-earning years.
According to the SSA, the average monthly benefit that disabled workers received in 2020 was $1,277. This is money that you and your family need. The government calculates the amount based on the money earned during your working years.