If you’re thinking about applying for Social Security Disability Insurance (SSDI), you probably want to know one thing first: how are SSDI benefit amounts calculated? The short answer is that SSDI is based on your work and earnings history, not how severe your disability is. Your medical condition gets you in the door, and your past earnings decide the dollar amount.

What Actually Drives Your Monthly Check

SSDI looks at the wages you paid Social Security taxes on (your FICA earnings). Generally, the more you earn over time, the higher your benefit. Age doesn’t reduce SSDI like early retirement can, and having enough work credits only affects eligibility, not the final amount.

Step 1: SSA Calculates Your AIME

SSA starts by figuring out your Average Indexed Monthly Earnings (AIME). They adjust your past earnings for overall wage growth (“indexing”), then average your highest-earning years to get a monthly number. Think of AIME as your career’s “batting average” for covered earnings.

Step 2: AIME Becomes Your PIA

Next, SSA runs your AIME through a formula with two “bend points” to get your Primary Insurance Amount (PIA). The formula is progressive:

• The first slice of your AIME is multiplied by a higher percentage.
  
  
• The next slice is multiplied by a smaller percentage.
  
  
• Anything above the second bend point gets an even smaller percentage.
  
  

Add those pieces together, and you have your PIA, the base for your SSDI benefit. Bend points change each year, so SSA applies the ones for your filing context.

Will My Amount Ever Go Up?

Yes. Once you’re receiving SSDI, your benefit can increase through Cost-of-Living Adjustments (COLA). COLA is applied automatically each January to help keep up with inflation. You don’t need to reapply.

What About Benefits for My Family?

In some cases, family members (such as a spouse caring for your minor child, or your dependent children) can receive benefits on your record. There’s a family maximum, which caps how much can be paid out in total. That cap doesn’t reduce your own SSDI; it just limits the additional amounts paid to family members so the household stays within the maximum.

Can Other Payments Reduce SSDI?

Certain payments can trigger offsets. Two common examples are workers’ compensation and some public disability benefits. If the combined total would be too high compared to your prior earnings, SSA may reduce your SSDI. Private long-term disability policies usually don’t reduce SSDI, but they may reduce your payment when you start getting SSDI. Keep copies of all award letters so you know exactly who is paying what.

Working While on SSDI

You’re allowed to try going back to work using programs like the Trial Work Period and Extended Period of Eligibility. These safety nets let you test your capacity without immediately losing benefits. That said, earnings above certain monthly thresholds can eventually suspend or stop checks. Planning and documentation are key—especially if your health fluctuates.

Will I Owe Taxes on SSDI?

Maybe. Some people pay federal income tax on a portion of SSDI, depending on total household income. Many do not. State tax rules vary, so it’s worth a quick check with a tax pro if you’re unsure.

How to Get a Realistic Estimate

The best way to see your number is to create a My Social Security account and view your personalized estimate based on your actual earnings record. This avoids guesswork and shows how different scenarios, like future work or COLA, might change your payment. If your history includes self-employment, gaps, or possible offsets, it can help to have a professional review everything so there are no surprises.

Bottom Line

How are SSDI benefit amounts calculated? SSDI pays you based on your earnings history, converted through the AIME → PIA formula, then adjusted each year with COLA. Family benefits may increase the total paid to your household (up to a cap), and certain other disability payments can reduce SSDI. For the clearest picture, pull your official estimate and talk through the details with someone who lives this process every day.

Want help reading your earnings record, checking for offsets, or planning around a return to work? We’ll walk you through it in plain English. Contact Disability Attorney Services LLC.: Request a free consultation.