If you are disabled and are receiving supplemental social security income from the government, you may be wondering how exactly those monthly amounts are determined. Your disability payments are not at all arbitrary, so it’s important to understand how they are calculated on a monthly basis.
Ultimately, your Social Security Disability Insurance (SSDI) payment is based on your mean lifetime earnings from before you became disabled. We’ll discuss the different factors that go into determining your monthly income and why it’s important to consult an SSDI lawyer for help on these somewhat complex matters.
Covered Earnings and SSDI Benefits
As we’ve already stated eligible candidates for SSDI payments will receive monthly benefits based on what they were making before the disability began. The type of disability or its severity does not factor into the payment amount. However, your SSDI benefits may be reduced if you’re receiving help from other sources. We’ll cover this more in the section below.
Your SSDI payment cannot be denied based on your assets, but your earnings prior to your disability must be covered under the Social Security program in order for them to count. This is where we get into the notion of “covered earnings.”
Covered earnings are wages acquired from jobs that withheld money to be paid into Social Security. This includes Social Security taxes or wages withheld for the Federal Insurance Contributions Act (FICA) tax. Most wages are considered covered earnings, which means they will count towards your calculated SSDI payment total.
Average Indexed Monthly Earnings
Your average indexed monthly earnings (AIME) are an average of covered earnings made over a certain period of time. This is what your SSDI payment is based on.
After this average is determined, a formula is applied in order to calculate your primary insurance amount (PIA). Your PIA is the figure used by the Social Security Administration to set your monthly benefit total.
You have the option to check your covered earnings history and get an estimate of your SSDI benefits on the administration’s website.
Help from Other Sources
As we’ve mentioned, your disability payments may be reduced if you are receiving benefits from other public sources such as a workers’ compensation fund, the military, state or local retirement agencies and more. Sources like private insurance or a private pension will not have any bearing on your SSDI benefits.
When other sources come into play, calculating your monthly SSDI payment can become rather complicated. For example, Colorado has specific rules regarding the interaction between SSDI payments and other public disability benefits like workers’ comp. Speaking with an SSDI lawyer can help you make sure you’re receiving all of the disability benefits you’re entitled to.
Please contact Heuser & Heuser today to see what we can do if you’ve been denied social security disability benefits or need help regarding your current SSDI payments. At the very least, we can improve your understanding of the system and reduce any stress associated with it. We look forward to speaking with you.