Social Security Disability Insurance provides financial assistance to individuals who are unable to work due to a disability.
Those seeking support should understand how the Social Security Administration determines SSDI payments.
Eligibility criteria
According to the SSA, in December 2021, more than 9 million people nationwide collected SSDI. To qualify for SSDI benefits, individuals must meet specific eligibility criteria set by the SSA. This includes having a medical condition that prevents substantial gainful activity and meeting the duration of work requirements.
Work history and earnings
The SSA uses the individual’s work history to calculate the average lifetime earnings of the applicant. The focus is on the years when the applicant earned the most. The SSA uses this average to determine the monthly benefit amount.
Primary insurance amount
The primary insurance amount is the base amount of SSDI payment that an eligible individual can receive each month. The formula that calculates it takes into account the applicant’s average indexed monthly earnings. The SSA applies a percentage to a portion of the AIME to arrive at the PIA.
Cost-of-living adjustments
SSDI payments may be subject to cost-of-living adjustments to account for increases in the cost of living over time. The SSA makes these adjustments annually based on changes in the Consumer Price Index.
Dependent benefits
In some cases, SSDI beneficiaries may receive additional payments for dependents, such as spouses or children. The amount of dependent benefits is typically a percentage of the beneficiary’s PIA, up to a maximum family benefit.
Other sources of income
Other sources of income the beneficiary receives, such as workers’ compensation or pensions may affect SSDI payments. These sources of income can impact the amount of SSDI payment through offset provisions.
Disabled people who cannot work and earn a living should apply for SSDI.
