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By Michelle Shvarts
Principal Attorney

If you’re facing a disability that prevents you from working, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs can offer crucial financial support. But have you ever wondered how the SSA determines your monthly benefit amount? While the calculations might seem complex, understanding the basic principles can empower you as you navigate the application process.

SSDI vs. SSI: Different Programs, Different Calculations

It’s important to understand the key difference between SSDI and SSI. SSDI is an insurance program funded by payroll taxes you pay while working. The amount you receive is based on your average covered earnings over your working lifetime. On the other hand, SSI is a needs-based program funded by general tax revenue. To qualify, you must have limited income and resources.

SSDI: A Formula Based on Your Work History

For SSDI, the calculation revolves around a key term: Average Indexed Monthly Earnings (AIME). Here’s how it works:

  1. Identifying Your Working Years: The SSA considers your earnings history, typically using up to 35 years of your highest-earning years.
  2. Indexing for Inflation: To account for rising living costs, your earnings from past years are adjusted using a national average wage index.
  3. Calculating AIME: The indexed earnings are then averaged, resulting in your AIME. This figure essentially represents your average inflation-adjusted monthly income throughout your working career.

The Primary Insurance Amount (PIA): The Foundation of Your Benefit

Once you have your AIME, the SSA uses a formula to determine your Primary Insurance Amount (PIA). This formula considers your age when you become disabled, with a progressive structure. In simpler terms, those with higher lifetime earnings receive a higher PIA, but the increase is not proportional. This ensures a level of social safety net for everyone.

For example, in 2024, the formula uses a combination of percentages applied to different segments of your AIME:

  • 90% of the first $1,174 of your AIME
  • 32% of your AIME between $1,175 and $7,078
  • 15% of any AIME above $7,078

Additional Factors Affecting Your SSDI Payment

While the PIA forms the base, a couple of other factors can influence your final monthly benefit:

  • Dependents: If you have a spouse or minor children who qualify, they may be entitled to additional benefits based on your PIA.
  • Offset for Workers’ Compensation: If you’re also receiving workers’ compensation benefits, the SSA may reduce your SSDI payment to avoid exceeding a certain income threshold.

SSI: A Needs-Based Calculation

For SSI, the calculation focuses on your current income and resources. The SSA has a Federal Benefit Rate (FBR) that sets the maximum monthly benefit amount for an individual or couple. However, your actual benefit amount is determined by subtracting your countable income from the FBR.

  • Countable Income: This includes income from wages, pensions, Social Security retirement benefits, and even some in-kind support like food and housing. The SSA has specific rules for what counts as income and what doesn’t.
  • Resource Limits: SSI also has limits on the value of assets you can own, such as bank accounts, investments, and real estate (excluding your primary residence).

The Importance of Accuracy in Reporting

It’s crucial to accurately report your income and resources when applying for SSI. Inaccuracies can lead to delays, denials, or even overpayments that you may have to repay.

The Takeaway: Knowledge is Power

Understanding the basic calculations behind SSDI and SSI benefits can be empowering. While the specifics might seem complex, knowing the general principles can help you navigate the application process and ensure you’re receiving the support you deserve. Remember, consulting with a Social Security disability attorney can provide valuable guidance throughout the process. Contact the team at Disability Advocates Group today for help with your SSI or SSDI claim.

Note: This blog post is intended for general informational purposes only and should not be construed as legal advice.

About the Author
Ms. Shvarts and the rest of the team at Disability Advocates Group are dedicated to assisting individuals in Florida obtain Social Security Disability Benefits (SSDI) and Supplemental Security Income (SSI) benefits.