How are SSDI Benefits Calculated?

Social Security Disability Insurance (SSDI) is part of the Social Security retirement program, but it’s for workers who become disabled before they reach retirement age. Only workers who have paid Social Security (FICA) taxes for many years are insured by the SSDI program.

Calculating Social Security Disability Payments

The amount of money paid for SSDI payments is unique for every individual. The Social Security Administration (SSA) uses a complex formulas to calculate disability benefits for each individual, up to the maximum monthly benefit of $2,639 for 2016. SSDI benefit awards are calculated by strict income and work requirements which can be explained to Illinois claimants by Social Security attorneys Chicago.

When an individual is approved for SSDI benefits, monthly payments are calculated based on an average lifetime earnings before the disability began. It is not based on the severity of the disability or the claimant’s income. According to Social Security Administration records, the average SSDI payment for recipients in 2016 is $1,166. On average, most SSDI recipients receive between $700 and $1,700 per month, but payments are reduced if recipients receive disability payments from other sources.

SSA bases disability benefits on the amount of income on which a person has paid Social Security taxes, referred to as “covered earnings.” A formula that consists of set percentages for different income amounts are used to calculate disability payments.

  • AIME – Averaged Indexed Monthly Earnings
  • PIA – Primary Insurance Amount

A formula is applied to each individual’s AIME to calculate their PIA. For example, in 2016, 90 percent of the first $856 of a person’s AIME is added to their PIA. In addition, 32 percent of AIME ranging from $856 to $5,157, plus 15 percent of AIME over $5,157 are added. These combined amounts are added up to calculate a person’s monthly disability payment. For Illinois residents filing SSDI, Social Security attorneys Chicago can explain formulas and clarify monthly payments.

When Do SSDI Payments Begin?

Once approved for Illinois SSDI, benefits will begin after an individual has been disabled for five complete months, even if benefits are approved right away.

If Illinois disability benefits are denied, and an appeal is filed through Social Security attorneys Chicago, approval can take six to twelve months for some disability cases. In those cases, once benefits are approved, disability backpay will typically be paid starting with the sixth month after the onset date of the disability.