How much your SSDI (Social Security disability) benefit will be is based on your "covered earnings"—the wages that you paid Social Security taxes on—prior to becoming disabled.
What is SSDI? Social Security Disability Insurance (SSDI) is the federal insurance program that provides benefits to qualified workers who can no longer work. To be eligible, you must be insured under the program (by having paid FICA or SECA taxes over a number of years) and you must meet the Social Security Administration's definition of disabled. SSI payments, on the other hand, aren't based on past earnings.
Your SSDI benefits may be reduced if you get disability payments from other sources, such as workers' comp, but regular income won't affect your SSDI payment amount.
The Social Security Administration (SSA) uses your Average Indexed Monthly Earnings (AIME) and Primary Insurance Amount (PIA) to calculate your SSDI benefits. The formula Social Security uses is quite complicated, and most people won't be interested in trying to calculate their benefits on their own, especially because Social Security can give you a good estimate.
To give you an idea of how much SSDI pays, for 2021, the average SSDI payment $1,277 per month, but those whose income was fairly high in recent years can receive up to $3,148.
SSDI payments don't vary by state; your SSDI payments will stay the same no matter which state you live in.
If you're interested in how Social Security calculates your AIME and PIA, here's how.
First, the SSA will determine your AIME. To do this, the SSA will adjust, or index, your lifetime earnings to account for the increase in general wages that happened during the years you worked. This is done to make sure that the payments you get in the future mirror this rise.
The SSA will use up to 35 of your working years in the calculation. The SSA takes the years with the highest indexed earnings, adds them together, and divides them by the total number of months for those years. The average is then rounded down to reach your AIME.
You can see an example of how the SSA calculates an AIME on the SSA's website.
Your Primary Insurance Amount (PIA) is the base amount of your benefits. The SSA uses the total of three fixed percentages of your AIME to determine your PIA. The dollar amounts that result from the calculation are called "bend points." Bend points are changed each year to reflect the national average wage index.
The PIA for someone who becomes eligible for SSDI benefits in 2021 is the sum (total) of the following:
If the sum of the percentages isn't a multiple of $0.10, it will be rounded to the next lower multiple of $0.10.
The easiest way to calculate SSDI benefits is to go to www.ssa.gov/mystatement, log in, and check your benefits statement. It will tell you exactly how much SSDI you will get if you become disabled this year.
By the time they get an approval letter from Social Security, most disability applicants are eligible for back payments of benefits. The number of months of back payments you'll receive will depend on when you applied for SSDI and the date the SSA decided you became disabled (called your "established onset date," or EOD.) How much you'll receive in total SSDI backpay depends on your monthly SSDI benefit amount.
In addition to getting payments going back to your application date, you can get up to 12 months of retroactive payments for the year prior to your application date (or your "protective filing date," discussed below)—if you were disabled that long ago. You can't get benefits for the months before your EOD (again, your disability onset date).
Once you are approved for benefits, there is a five-month waiting period, starting at your disability onset date, before you can be paid benefits. This means that, to receive the maximum amount of backpay (going back for the 12 months before your application date), you must have an EOD of at least 17 months prior to your application date (or your protective filing date). (The one exception to this rule is for ALS; claimants who have been diagnosed with ALS, or Lou Gehrig's disease, do not have a five-month waiting period.)
You can establish a protective filing date (PFD) by making a written statement to the SSA that you intend on filing for disability benefits. A PFD is also established when you begin an online application, even if you don't complete it. If you want to learn more, read our article about back payments.
Some disability payments, such as workers' compensation settlements, can reduce your SSDI benefit amount. These are called "offsets." Most other disability benefits, however, such as veterans benefits or payments made by private insurance, do not affect your SSDI benefit amounts.
Every year everyone's Social Security benefits are recalculated to adjust to the increasing cost of living. How much of an increase depends on the annual COLA amount for SSDI, which is determined by increases in the Consumer Price Index (CPI).
Updated September 27, 2021