Calculating SSDI Benefits

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Calculating SSDI Benefits

Many people who apply for Social Security Disability Insurance (SSDI) benefits are unsure of how much compensation they would receive should their application be approved.  Unlike personal injury claims or work injury benefits, the severity of an injury does not play a role in determining SSDI benefits.  SSDI benefits are determined instead by calculating applicants’ average indexed monthly earnings (AIME) and running that amount through a predetermined mathematical formula.  Benefits are based solely on work and salary history.

Calculating AIME is a bit intensive and is typically done by the Social Security Administration (SSA).  For the year you turn 21 years old and every year after, the income on which you paid Social Security taxes is multiplied by a number called an indexing factor and averaged.  For example, let’s say someone earned $40,000 in 2010 and 2011.  In 2020, the income that person received in 2010 would be multiplied by 1.2512841 and the income earned in 2011 would be multiplied by 1.2132683.  For the purpose of calculating AIME, 2010 income is now considered $50,051 and 2011 income is now considered $48,531.  The AIME for just these two years would be $49,291.  To calculate a full AIME, one would need to make this calculation for every year in which you’ve earned income.

Once an applicant’s AIME has been calculated, determining benefits become much easier.  SSA follows a formula to determine an SSDI benefit amount.  In 2020 the formula is:  90 percent of AIME up to $960 plus 32 percent of AIME over $960 and under $5,785 plus 15 percent of AIME over $5,785.  The values of $960 and $5,785 in the formula are called ‘bend points’ and change every year.  So if a 2020 SSDI applicant’s AIME is $1500, the benefit amount would be $864.00 + $172.80 + $0, or $1,036.80.  For an AIME of $7000, the benefit amount would be $864.00 + $1,544.00 + $182.25, or $2,590.25.  The average SSDI benefit in 2020 is expected to be $1,258.  SSDI benefits are also subject to a maximum amount.

Are you curious about your expected SSDI benefit level?  Anyone aged 18 and up who has an email address, Social Security number, U.S. mailing address can create an account with the SSA to view their work history and see what their estimated SSDI benefit level would be.  The SSA website itself disclaims that it cannot provide your actual benefit amount until you actually apply, but the estimated benefit level should provide a good idea of what you would receive after a successful SSDI application.

The amount of SSDI benefits an injured worker is expected to receive doesn’t do very much if the worker does not submit an SSDI application that is approved by the government.  The Law Offices of Scott Warmuth helps people applying for SSDI benefits and appealing SSDI application denials.  For a free consultation with a Social Security Disability attorney, call our offices today at 888-517-9888.

SSDI Attorneys in Southern California

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