How Your Monthly SSDI Benefit Is Calculated

Social Security Disability Insurance (SSDI) provides financial assistance to individuals who can no longer work due to a severe medical condition. This federal program replaces a portion of lost income for those who have contributed to the Social Security system. Understanding how SSDI benefits are calculated involves several steps, considering your past earnings, work history, and various adjustments.

Work Credit Requirements

Eligibility for Social Security Disability Insurance benefits requires earning a sufficient number of “work credits.” These credits determine if you have worked long enough and recently enough under Social Security. You earn work credits by working in jobs where you pay Social Security taxes. The earnings needed for one credit change annually to keep pace with average wage levels.

For 2025, you receive one work credit for each $1,810 in earnings, up to a maximum of four credits per year. These credits remain on your Social Security record indefinitely, regardless of changes in employment or periods out of the workforce.

The number of work credits needed for SSDI depends on your age when your disability begins. Most adults require 40 work credits, with at least 20 of those credits earned in the 10 years immediately preceding the onset of their disability. Younger workers have different requirements; for example, if you become disabled before age 24, you might only need six credits earned within the three-year period ending when your disability started. Similarly, individuals aged 24 to 31 generally need credits for working half the time between age 21 and the time their disability began. Meeting these work credit requirements establishes your eligibility for benefits, but it does not determine the specific amount you will receive.

Average Indexed Monthly Earnings

Once work credit requirements are satisfied, calculating your monthly SSDI benefit begins with determining your Average Indexed Monthly Earnings (AIME). This figure measures your average earnings over your working life, adjusted to reflect changes in general wage levels. The indexing process ensures past earnings are comparable to recent earnings, accounting for historical wage growth.

The Social Security Administration (SSA) primarily uses earnings from years when you worked and paid Social Security taxes. For most individuals, the SSA considers earnings from all years worked, up to the year you turn 60. These earnings are then “indexed” to account for the rise in the national Average Wage Index (AWI) over time.

After indexing, the SSA identifies your 35 highest-earning years from your entire work history. These 35 years, whether consecutive or not, are then used to calculate your AIME. If you have fewer than 35 years of earnings, the remaining years are filled with zeros, which can reduce your overall average. The total indexed earnings from these 35 years are summed. This sum is then divided by the total number of months in those 35 years. The resulting monthly average is your Average Indexed Monthly Earnings, which serves as the foundation for the next step in calculating your SSDI benefit.

Primary Insurance Amount Determination

The Average Indexed Monthly Earnings (AIME) serves as the direct input for calculating your Primary Insurance Amount (PIA). The PIA represents the monthly benefit you would receive if you began collecting Social Security benefits at your full retirement age, or in the case of disability, the amount before any potential adjustments. This calculation is designed to be progressive, meaning it replaces a higher percentage of earnings for lower-income workers than for higher-income workers.

The SSA uses a specific formula involving “bend points” to convert your AIME into your PIA. These bend points are dollar amounts that divide your AIME into three distinct segments. For individuals becoming eligible for benefits in 2025, the first bend point is $1,226, and the second bend point is $7,391. These amounts are adjusted annually to reflect changes in the national average wage index, ensuring the formula remains relevant over time.

The PIA formula applies different percentages to the portions of your AIME that fall within each segment. Specifically, 90% of the first $1,226 of your AIME is used. For the portion of your AIME between $1,226 and $7,391, 32% is applied. Finally, for any portion of your AIME exceeding $7,391, 15% is used. The sum of these three calculated amounts yields your Primary Insurance Amount. This structured approach ensures a baseline level of support while acknowledging higher lifetime earnings.

Adjustments to Monthly Benefits

Even after the Primary Insurance Amount (PIA) is calculated, several factors can adjust the final monthly SSDI benefit paid to a recipient. These adjustments ensure fairness and prevent excessive benefit levels when other income sources are present. Such modifications typically result in a reduction of the calculated PIA.

One common adjustment is the “family maximum benefit.” This rule limits the total amount of Social Security benefits that can be paid to a worker and their family members based on that worker’s earnings record. While the worker’s own benefit (their PIA) is never reduced by this rule, the benefits paid to eligible family members, such as a spouse or children, may be proportionally lowered if the combined total exceeds the family maximum. For SSDI recipients, this maximum typically ranges from 100% to 150% of the worker’s PIA. The specific percentage depends on the worker’s AIME and the number of beneficiaries claiming on the record.

Another significant adjustment involves “workers’ compensation” and other “public disability benefits.” If you receive SSDI and also get workers’ compensation or a public disability benefit (such as from a state or local government, not based on Social Security-covered employment), your Social Security disability benefit may be reduced. The Social Security Administration implements an “offset” to ensure that the combined amount of your SSDI and these other benefits does not exceed 80% of your average earnings before you became disabled. If the total surpasses this 80% threshold, your SSDI benefit is reduced by the excess amount.

This offset applies whether the other benefit is received as regular monthly payments or as a lump-sum settlement. In the case of a lump sum, the SSA prorates the amount to determine a monthly equivalent for the offset calculation. Benefits from private sources, such as private pensions or insurance policies, generally do not affect your SSDI payments. Similarly, certain needs-based benefits like Supplemental Security Income (SSI) or Veterans Affairs (VA) disability benefits typically do not result in an offset against your SSDI.