Disability benefits, specifically Social Security Disability Insurance (SSDI), are calculated based on your work history and earnings, not on the severity of your disability or your household income. The key factors are your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA).
Here's a breakdown:
Calculating Your SSDI Benefit
The Social Security Administration (SSA) uses a formula based on your earnings record to determine your monthly SSDI benefit. This involves several steps:
1. Average Indexed Monthly Earnings (AIME)
- What it is: AIME represents your average monthly earnings over your working life, adjusted for changes in general wage levels.
- How it's calculated: The SSA reviews your earnings record and selects up to 35 of your highest earning years. These earnings are "indexed" to account for wage growth over time. The indexed earnings are then averaged to arrive at your AIME.
- Example: If you worked for 30 years, the SSA would use those 30 years of earnings to calculate your AIME. If you worked for more than 35 years, the 35 years with the highest indexed earnings are used.
2. Primary Insurance Amount (PIA)
- What it is: PIA is the basic benefit amount you're entitled to receive at your full retirement age. It also serves as the foundation for calculating your SSDI benefit.
- How it's calculated: The SSA uses a formula applied to your AIME to determine your PIA. This formula is complex and changes each year to reflect changes in the national average wage. It involves applying different percentages to different portions of your AIME.
- Benefit Calculation: The PIA is then used to calculate your disability payment amount.
Factors NOT considered:
- Severity of Disability: While you must meet the SSA's definition of disability to qualify for SSDI, the severity of your disability doesn't directly impact the amount of your benefit.
- Household Income: Your household income or assets are generally not considered when determining your SSDI benefit amount. SSDI is an earned benefit based on your work history.
| Factor | Considered in Calculation? | Affects Benefit Amount? |
|---|---|---|
| Average Indexed Monthly Earnings (AIME) | Yes | Yes |
| Primary Insurance Amount (PIA) | Yes | Yes |
| Severity of Disability | No | No |
| Household Income | No | No |
Note: This explanation focuses specifically on how the amount of the disability benefit is calculated under SSDI. It does not cover the medical requirements for eligibility for disability benefits.
