One frequent question we receive from clients is “How much am I going to get?” This question is asked after a claimant has been approved for disability benefits. Social Security uses a formula based on average earnings throughout a worker’s career, so everyone’s Primary Insurance Amount (PIA) is going to be different. It is important to understand that there is a maximum monthly benefit amount of $2,623 for people at full retirement age no matter how high their career earnings might be. Below, Social Security explains exactly how it determines a workers PIA.
How Do You Figure Your Cash Benefits?
The Primary Insurance Amount (PIA) is the figure used to determine almost all of your cash benefit amounts. These benefit amounts include your monthly benefits as a worker and benefits for your dependents and survivors. The PIA is based on your taxable earnings (see §713) averaged over the number of years you worked. This produces a monthly benefit that partially replaces the loss of your income because of retirement, disability, or death. The lump-sum death payment (see §428) is $255; however, it may be less if your PIA was computed under a totalization agreement. (See §107.) The only cash benefit not based on the PIA is the special monthly payment made to uninsured persons age 72 or over discussed in §346.
700.2
How Does SSA Determine Your Average Earnings?
There are generally two methods for determining average earnings. The method we use depends upon when you are first eligible (age 62) (or when you die if death occurs before you are eligible):
First eligibility or death before 1979; or
First eligibility or death in 1979 or later.
700.3
What If An Insured Worker Dies Before Reaching Age 62 In 1979 Or Later?
If an insured worker dies before age 62, his or her earnings are indexed differently to compute the PIA on which widow(er)’s benefits are based, if this results in a higher benefit. In this case, the worker’s earnings are indexed up to and including the earlier of the following:
The year in which the widow(er) reaches age 60; or
The second year before the widow(er) becomes eligible, but never earlier than the second year before the worker died.
700.6
Why Are Adjusted Earnings Used Instead Of Actual Earnings In Computing The PIA?
Adjusted earnings are used instead of actual earnings to reduce the difference between a younger worker’s average income and an older individual’s average earnings. If not, the younger worker’s benefit amounts would be based on fewer, more recent years of earnings while the older worker’s average earnings would include lower amounts that were earned and taxable in earlier years of Social Security coverage.
700.7
Are There Exceptions For Individuals Who Have Worked Several Years At Low Earnings?
A special minimum PIA is possible for workers who have worked under Social Security for many years at low earnings. (See §717.) At least 11 years of working at low earnings are required. Additional years are usually needed to bring the amount of the special minimum PIA to more than the PIA computed under the methods explained in subsections 700.3 – 700.5 above.
