How your disability benefits are calculated

On Behalf of | Jul 15, 2022 | Social Security Disability

As we’ve mentioned many times on the blog, Social Security disability benefits can provide you with a true financial lifeline at a time when you’re unable to work and you’re worried about keeping food on the table and a roof over your head.

But even if you think that you might qualify for disability benefits, you might still have questions about what your benefits will look like if they’re awarded to you. That’s an understandable concern, which is why we hope that this post will provide a little bit of insight into the process.

How are disability benefits determined? 

Disability benefits, unlike those related to Supplemental Security Insurance, are based on your past earnings. To reach an appropriate figure, the Social Security Administration looks to figures such as your Average Indexed Monthly Earnings and your Primary Insurance Amount. The formulas tied to these calculations can be quite complex, which is why many people don’t put forth the time and effort to try to calculate what they may be entitled to.

An attorney who is experienced in this area of the law, though, may be able to help you assess the estimate that the Social Security Administration has given you to determine if it’s appropriate. With that said, let’s briefly look at how these calculations are made.

Calculating the average indexed monthly earnings

Here, the Social Security Administration essentially looks at your highest earning years for up to 35 years of employment, adds them together, then divides them by the number of months in that period. That figure is then rounded down to reach this number.

Calculating the primary insurance amount

To calculate this figure, the Social Security Administration uses three percentages applied to your Average Indexed Monthly Earnings. So, to reach your base benefit amount, the Social Security Administration will add together 90% of the first $1,024 of your Average Indexed Monthly Earnings with 32% of your Average Indexed Monthly Earnings from $1,024 to $6,172 and 15% of your earnings above $6,172.

So how much are you going to be awarded if you succeed in your claim?

It obviously depends on your earnings. The average benefit is more than $1,300 per month, but disability awards range from $100 per month to more than $3,000 per month. By the time your claim processes, though, you might be entitled to some sort of backpay. This can help offset the losses that you’ve accumulated over the last several months, hopefully providing you with the immediate relief that you need.

What does all of this mean for you? 

This all means that you need to have a realistic expectation of the benefits that you might recover. It also means that you need to be prepared to present the best employment records you can find. After all, the more you’ve made over the course of your employment history, the more you’re likely to recover in disability benefits.

But we know that navigating the disability claims process is more complicated than it seems. You can run into issues proving that you meet the government’s definition of disability, and; therefore, you might have to find a way to navigate the appellate process.

However, you may be able to increase your chances of recovering the benefits you need and deserve by working closely with an attorney who is experienced in this area of the law. One of these lawyers can help you gather the evidence, develop the legal strategy that you need to position yourself for success and make the arguments necessary to increase the likelihood that your claim will be approved.

If you’d like to learn more about what a legal advocate can do for you in these matters, now may be the time to reach out to an attorney of your choosing to learn more about what their representation has to offer.