Are you a New Jersey resident who stopped working because of a disability? You may be eligible to receive monthly Social Security Disability benefit payments due to your qualified impairment. This blog post explains how to tell if you qualify for disability benefits and how much you would receive in your monthly disability payment.

At London Eligibility Disability Advocates for Social Security and Medicaid, we help disabled people like you apply for and claim all the disability payments and other benefits to which they are entitled. If you think you might be eligible for disability benefits, Medicaid, or Supplemental Security Income (SSI), contact us to find out how we can help you.

How Much Will Your Disability Benefit Be?

Every Social Security Disability Insurance (SSDI or SSD) recipient receives a different monthly benefit payment. The benefit amount is based on the claimant’s 35 highest annual incomes over the course of their working life. Before we cover the formula the Social Security Administration (SSA) uses to figure out your benefit amount, let’s look at what the government considers to be a “disability.”

People suffer from disabilities in varying degrees of severity. Disabilities can also affect people for different lengths of time. Given this wide range of variation in the disabilities people experience, the Social Security Administration needed to define what “disability” would qualify someone to receive disability benefits. The SSA applies the following definition to distinguish between disability claims that qualify for benefits and those that do not qualify:

“A disability is a medically determinable physical or mental impairment that lasts or is expected to last for 12 months (or result in death), and that prevents the person from performing substantial gainful activities (SGAs).”

What are substantially gainful activities?

In 2023, the SSA considers a substantial gainful activity to be any activity through which a person can earn at least $1,470 per month. Those who are blind can earn up to $2,460. The three required criteria to collect a disability payment from Social Security are:

• 1). a medically determinable impairment that
• 2). lasts or is expected to last 12 months, and
• 3). prevents you from earning more than $1,470 per month.

If you worked and paid taxes on your earnings, and your circumstances fit these three conditions, you should apply for SSD benefits.

Calculating the Amount of Your Monthly Disability Benefits

Determining what amount of your Social Security Disability benefits requires you to plug some simple data into the same formula used by the Social Security Administration.

First, you need to identify your 35 highest earning years. You can do this by logging on to my social security account, the SSA’s website. If you don’t already have an online account, it’s easy to open one. On the site, you can see the amount you have earned every year since you started working.

The SSD program takes your highest 35 annual earnings and indexes those figures to ensure that the benefit payments reflect the increase in the overall standard of living that occurred over the person’s working career. The SSA website lists the indexing factors to allow you to do the calculations yourself.

The SSD Benefits Formula

Take your highest 35 annual incomes. If you do not want to index the figures, you can proceed with the calculations, but your resulting benefit amount will probably show a number lower than your slightly actual benefit.

Add the 35 highest annual incomes together, then divide by 35 to find your average annual income. Then divide that figure by 12 to arrive at your average monthly income. The Social Security Administration will have indexed the income figures to produce what they call your Average Indexed Monthly Earnings (AIME).

Average Indexed Monthly Earnings (AIME)

Social Security refers to your ultimate monthly disability benefit amount as your Primary Insurance Amount (PIA). To find your PIA, you will apply the following formula to your Average Indexed Monthly Earnings (AIME):

Add

• 1). 90 % of the first $1,115 of your AIME, plus
• 32 % of the amount of your AIME above $1,115 through $6,721, plus
• 15 % of the amount of your AIME above $6,721 (if any).
• Round down the total to the nearest $0.10 if not already a multiple of 10.

Here is an example of how you use this formula.

Suppose your Average Indexed Monthly Earnings were $5,416.66.

• 1). 90 % of the first $1,115 of $5,416.66 = $1,238.88, plus
• 2). 32 % of AIME above $1,115 thru $5,416 (5,416 – 1,115 = $4,301) $4,301 x .32 = $1,376.32, plus
• 3). 15 % of AIME above $6,721 (if any) = 0
• 4). Total = $1,238.88 + $1,376.32 + 0 = $2,615.20
• 5). BENEFIT AMOUNT (PRIMARY INSURANCE AMOUNT) = $2,615.20.