If you suffer from severe health impairments that prevent you from working, you may wonder whether Social Security Disability Insurance (SSDI) will replace all of your work-related income. The short answer is probably not. If you are approved for SSDI benefits, the amount of your monthly benefit is based on something called your Primary Insurance Amount (PIA). While this amount reflects your earnings history in the past, the disability insurance program is not meant to fully replace the income you received when you were working.
Understanding Primary Insurance Amount (PIA) & the Benefit Calculation
Your Primary Insurance Amount is the amount that you would receive in retirement benefits at the normal retirement age of 66, depending on when you were born.
Typically, the PIA is the sum of three separate percentages of portions of average indexed monthly earnings. The formula that the administration uses to calculate benefits is complex but you can find more information here. Fortunately, you don’t have to calculate your benefit estimate on your own because the Social Security Administration will calculate your PIA for you.
To give you an idea of what you might receive, in January 2019 the average SSDI benefit amount was $1,234 per month. However, it’s not always a simple formula – further complicating the issue is that benefits paid to disabled workers and their families may be reduced for receipt of certain other disability benefits (such as Workers’ Compensation).
The Difference Between Retirement & Disability Benefit Amounts
While the Social Security Administration calculates disability benefits and retirement benefits slightly differently, the amount you receive in disability is generally the same as the amount you would receive for retirement benefits. The difference is that disabled workers may not have worked for as many years as retired workers have, which would generally bring down the amount they would be eligible for in retirement benefits. Some good news is that when you reach full retirement age, if you’re still receiving disability benefits, they will automatically convert into retirement benefits.
While complex, the Social Security Disability program serves as an essential life-line for people who are no longer able to work due to their conditions. If you are unable to work because of your health conditions, you should consult with a certified social security representative to assist with your claim.
About Citizens Disability, LLC:
Since 2010, Citizens Disability has been America’s premier Social Security Disability institution. Our mission is to give a voice to the millions of Americans who are disabled and unable to work, helping them receive the Social Security Disability benefits to which they may be entitled. Learn more about us and disability benefits SSDI & SSI or give us a call (800)492-3260.