How much will your Social Security Disability Insurance payment be?
Oct 25, 2021
You are thinking about applying for Social Security Disability but are wondering, “How much will I get?” “Will it be enough to live on?” “Why do different people get different amounts?” Social Security benefit amounts are complicated, but let’s try to shed a little light on the topic.
Average Indexed Monthly Earnings
The first thing Social Security does is calculate your Average Indexed Monthly Earnings (AIME). Like it sounds, this is the average amount of money you made monthly when you were still working. Social Security will look at up to the last 35 years to determine the amount and adjust it based on the cost of living. This is a very general description of how AIME is calculated. For more details, look at this Social Security page.
Primary Insurance Amount
Primary Insurance Amount is the amount you, as an individual, will receive as Social Security Disability Payments. This is calculated using a complicated formula, but we will try to describe it here. You receive a percentage of your AIME, but it is not a flat percentage for the whole thing. Instead, Social Security breaks your AIME into three chunks. You get 90% of the first chunk, 32% of the second chunk and 15% of the last chunk. These chunks are divided by what are called Bending Points. The amount of the two Bending Points for 2021 are $996 and $6002. Therefore, you get 90% of your AIME that lands between $0 and $996, 32% of your AIME that lands between $996 and $6002, and 15% of your AIME that is over $6002. The bending points are adjusted each year and can be found here.
An Example Calculation
Let us say your AIME is $7,000:
First Chunk ($0 -$996) $996 X 90% = $896.40
Second Chunk ($996 - $6002) $5006 X 32% = $1,601.92
Third chuck ($6002 and above) $998 X 15% = $149.70
The amount you would receive each month (Primary Insurance Amount) is $2,648.02. More explanation on Primary Insurance Amounts and the bending points are discussed on the SSA website.
Family Member Benefits
If you are disabled, family members that are dependent on your income can also receive Social Security Disability payments. For example, your child can receive 50% of your Primary Insurance Amount if they are eligible. That said, there is a maximum family benefit amount, which is just as complicated to determine as your Primary Insurance Amount, so it will not be discussed here. Overall, it is roughly 85% of your AIME. As you can see, these calculations are complicated and having an attorney help you can be beneficial.
At Pedersen Law Office, LLC we understand how confusing Social Security Disability can be; that is why we offer free consults. We will discuss your application and disability and help you through the entire process. Our law office serves the communities of Appleton, Neenah, Menasha, Oshkosh, Green Bay and their surrounding areas.