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How are SSDI benefits calculated?

On Behalf of | Dec 22, 2021 | Social Security Disability

If you are thinking about applying for Social Security Disability (SSD) benefits, you are probably wondering how much you would receive if the Social Security Administration (SSA) approves you. You need to know if the level of benefits would be worth the time and effort to apply (and, likely, go through with an appeal).

The numbers that matter

Basically, the SSA calculates a disabled worker’s SSD benefits similarly to how it figures out how much Social Security a retiree is entitled to. It is based on how long you worked and what you earned during your working years.

The starting point is your average monthly income, starting from the year you turned 22 and ending the year you became too disabled to work anymore. The SSA then figures out which were your highest-earning years and drops a certain number of other years. The number of years excluded from the calculation depends on how long you worked. If you worked from 22 to 40, the SSA would drop your three lowest-income years from the formula. If you worked until you were 50, your five lowest-income years would be dropped.

The PIA formula

Once it has the years it wants to examine, the SSA plugs them into its primary insurance amount (PIA) formula. Keep in mind that the agency caps the amount of income it counts into the formula. For 2021, the cap is $142,800. If you ever earned more than that in a single year and applied for SSD this year, the SSA would only consider $142,800 of that year’s income.

Help for disabled people in Raleigh

The more years you worked and the higher the income you earned in those years, the more the PIA formula will calculate for you to receive. The amount may be fairly modest, but SSD is a huge financial help for thousands of families in North Carolina who have lost income due to a major disability or chronic illness and earned the right to benefits.

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