How Are SSD Benefits Calculated?
Social Security Disability (SSD) benefits are calculated based on the disabled worker’s earnings history, using a formula similar to that used for retirement benefits.
The Social Security Administration (SSA) looks at the applicant’s average indexed monthly earnings (AIME) over their most productive working years. The AIME is calculated by adjusting past earnings for inflation and then averaging them over a specific period. Once the AIME is determined, the SSA applies a formula to calculate the primary insurance amount (PIA), which is the basis for the monthly benefit amount.
The formula to determine the PIA involves applying specific percentages to portions of the AIME. Currently, the PIA is calculated by adding 90 percent of the first $1,226 of the AIME, 32 percent of the AIME over $1,226 and up to $7,391, and 15 percent of the AIME over $7,391. These bend points are adjusted annually for inflation.
The final PIA amount is what the individual would receive in monthly SSD benefits, subject to any deductions or offsets, such as those related to other public disability benefits. Additionally, cost-of-living adjustments (COLAs) may increase SSD benefits annually to account for inflation.
What Can Affect Your SSD Payment?
Certain types of income can also cut into your potential SSDI payments. These include:
- Workers’ compensation benefits
- State disability benefits
- Government pensions
According to the SSA, if you receive both SSDI payments and workers’ compensation or other non-SSDI benefits, 80 percent of your average pre-disability earnings is the most you can receive.
SSD Backpay
Depending on the circumstances, you could also be entitled to SSD backpay. Backpay is a lump-sum payment that you may receive to cover the period between the established onset date of your disability and the date SSA approves you for SSD benefits. If you’re eligible for it, backpay compensates you for the time you spent waiting during the often lengthy application and appeals process.
As part of the application process for SSD benefits, the SSA will determine the onset date of your disability, which could be up to 12 months before the application date if the disability existed then. Backpay is typically calculated from the date of application or the established onset date, whichever is later, minus a mandatory five-month waiting period.
To qualify for SSD backpay, you must meet the SSA’s definition of disability and have sufficient work credits to be eligible for SSD benefits. The amount of backpay depends on how long the application process took and when your disability began. If the SSA initially denies your claim but you successfully appeal the denial, your backpay amount could be substantial, covering months or even more than a year of retroactive benefits.
Backpay is usually issued as a lump sum, either through direct deposit or a check, and there are no restrictions on how it can be used.
Disclaimer
Please note that our calculator is meant to give you an idea of what SSD benefits you could be entitled to. Do not construe it as a guarantee. The Social Security Administration applies a complex formula to determine SSD benefit payments, and many factors could affect your Social Security benefits. The figure the calculator provides you is an estimate of your potential monthly SSDI benefit.
Contact Us Today for Legal Advice Catered to Your Needs
Applying for Social Security Disability benefits is a complex process, and far too many eligible people receive an initial denial due to simple mistakes. According to the Social Security Administration’s own numbers, just over two-thirds of disability claims are initially denied, and just one in five applications receive initial awards. Simply put, the deck is stacked against you. But fortunately, you don’t have to sit at the table alone.
Instead, you can get help from Morgan, Collins, Yeast & Salyer. We have the Kentucky Courage it takes to pursue the maximum benefits you’re entitled to under the law. We’re prepared to handle your claim to give you the peace of mind that comes from knowing a professional is on the job.
Here’s what you can expect when you come to us for help:
- We’ll start with a free initial case review. We’ll get to know you and understand your situation, advising you on what to expect during the process.
- We’ll complete your application. We’ll double-check that your application has everything it needs, reducing the chance of an initial denial.
- We’ll organize your medical evidence. SSA won’t approve your claim unless you can prove that you’re disabled from work. We’ll review your medical records and work with your doctors to provide this supporting evidence.
- We’ll appeal your case as necessary. If SSA denies your initial claim, we’ll appeal the decision through the proper channels and represent you at hearings as needed.
Don’t wait another moment to get the help you need during this difficult time. Contact Morgan, Collins, Yeast & Salyer today for a free consultation.
