Social Security Disability Montly Income

[flyboynm]

What is the name of your state (only U.S. law)? NM

How does Social Security determine your average monthly income prior to disability? Is it based upon your last year of work, average of the last 5 years of income or ... ?

Thank you in advance.

 

[canhelp]

there is no one single method that applies to everyone and all situations.
it depends on how your earnings were generated.
the Social Security Administration is the best source of information about their rules and programs.
it can be a complex calculation. You start with the calculation of your Primary Insurance Amount.


section 700 of the SSA handbook is a good reference:


We base your PIA on the Average Indexed Monthly Earnings (AIME). We index your earnings from 1951, through the second year before the year of your first eligibility or death, whichever comes first. “Indexed” means that your earnings are adjusted to put them in proportion to the earnings level of all workers for those years. Your actual reported earnings are used to compute the AIME for the years beginning with the year before your first year of eligibility.

This example shows how to calculate the PIA for an individual retiring at age 65 in the year 2000. Assume Mr. Francis retires at age 65 in 2000. The significant year for setting the index factor is 1995, which is the second year before the year in which he reached age 62. Average wages of all workers in 1995 are compared to average wages of all workers in each year after 1950. If Mr. Francis' earnings were $3,000 in 1951 and the wages of all workers in 1995 were 8.8160978 times higher than the average wages of all workers in 1951, (the index 1951 factor is 8.8160978). Therefore, the 1951 indexed earnings for Mr. Francis are $26,536.72 ($3,000 x 8.8260978). Index factors apply for each year to be indexed, depending on the ratio of average wage levels for all workers in each year compared to 1995. It is equally true that a different year of attainment of age 62 would change the index factors. In Mr. Francis' situation, earnings in years beginning with 1996 will not be indexed but will be the actual amounts reported.