How are SSD/SSI benefits calculated?


Quick Answer

The formula used to calculate your Social Security Disability Benefits is called the Average Indexed Monthly Earnings, or AIME. The years you have worked and the income generated during that time is taken into consideration.

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Full Answer

To determine how much in Social Security Benefits to grant you, the Social Security Administration computes the years you have worked and how much you have contributed to Social Security. The amount of money you have made will essentially determine how much you receive in disability payments. However, there are maximum and minimum amounts fixed despite what you may have earned.

Once the years you were actively employed and the respective earnings have been determined, the years that you had the highest income are taken into consideration. Then, they will divide the total amount by the total months in those years, rounding down to the next lower dollar amount.

This method of disability benefits computation is preferable because it takes into consideration issues of inflation and cost of living adjustments over the years the claimant has actively been employed. In calculating your benefits, the Social Security Administration will go back 35 years to get information. However, that does not mean you have to have worked for 35 years to be eligible for Social Security Disability benefits. All you need is 20 work credits from the last ten years.

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