Three moves turn your earnings into an SSDI benefit. SSA indexes your past earnings to recent wage levels, averages your highest years into a monthly figure called AIME, and runs that average through a weighted formula to produce your primary insurance amount. For 2026, that formula bends at $1,286 and $7,749 for workers first eligible that year.
How is SSDI calculated from your earnings record?
Every SSDI calculation runs in the same fixed order: index the earnings, average them, then apply the benefit formula. Under federal regulations, your monthly disability benefit equals your primary insurance amount, or PIA, so the PIA is the number the whole calculation is built to produce.
SSDI, which stands for Social Security Disability Insurance, is computed under the same rules as a retirement benefit. The regulation figures the PIA as if it were an old-age benefit and as if you were 62 at the start of your five-month waiting period. The PIA is the amount paid at full rate, with no early-retirement reduction, which is why an approved disability benefit is not cut for claiming before retirement age.
The three steps below follow that order. None of them looks at your diagnosis, your household income or what you own. The medical decision settles whether you are paid, and the earnings record settles how much. If you are still deciding whether to file, our SSDI claims page covers the application side, and our glossary defines the acronyms on SSA notices.
How Social Security indexes your past earnings to recent wages
Indexing converts old earnings into recent-wage terms before anything is averaged. Each year of your earnings is multiplied by the ratio of the national average wage index for your indexing year to the average wage index for the year you earned the money.
Your indexing year is the second year before the earliest of three events: reaching 62, becoming disabled, or dying. Earnings in the indexing year and later are used at face value, without indexing.
In household terms, indexing is what you do when you compare a starting salary from the 1990s with a starting salary today. You adjust for how much wages in general have grown, so an early-career paycheck is not averaged at its old face value. Without that step, a worker disabled at 50 would have early wages counted at a fraction of their real weight.
How many years of earnings count in an SSDI calculation
A disability claim can use fewer years than a retirement claim, because the count depends on your age when you became disabled. SSA counts your elapsed years, starting with the year you turned 22 (or 1951, if later) and running through the year before you became disabled.
From those elapsed years, SSA drops one year for every five, ignoring fractions, up to a limit of five dropout years. What remains is the number of computation years, which can never be fewer than two. A person disabled at 37 has 15 elapsed years (22 through 36), three dropout years, and 12 computation years. If you have fewer than three dropout years, the regulation allows qualifying child care years with no earnings to be dropped as well, up to a combined total of three.
SSA then takes your highest indexed years, up to the number of computation years, adds them, divides by the number of months in those years, and rounds down to the next lower dollar. The result is your average indexed monthly earnings, or AIME. If you have fewer years of earnings than computation years, the empty years count as zeros. Whether you are insured for SSDI at all is a separate question, answered by your work credits.
The 2026 PIA bend points in the SSDI formula
For 2026, the PIA formula bends at $1,286 and $7,749 of AIME, and those bend points apply to workers whose year of eligibility is 2026. SSA defines that year as the year a worker reaches 62, becomes disabled before 62, or dies before 62, as shown in SSA's bend point table.
The percentages are written into section 215(a)(1)(A) of the Social Security Act: 90 percent of AIME up to the first bend point, 32 percent of AIME between the bend points, and 15 percent of AIME above the second. The total is rounded down to the next lower multiple of 10 cents. Here is the formula applied to an AIME of $3,000 for a worker first eligible in 2026:
| Portion of AIME | Rate | Amount |
|---|---|---|
| First $1,286 | 90% | $1,157.40 |
| $1,286 to $3,000 ($1,714) | 32% | $548.48 |
| Above $7,749 | 15% | $0.00 |
| PIA, rounded down to the next 10 cents | $1,705.80 |
The weighting shows in the first row. The first slice of earnings is replaced at 90 percent, so the formula returns a larger share of earnings to lower-paid workers than to higher-paid ones. The bend points move each year with the average wage index, which is why the eligibility year matters. Once the PIA is set, the statute says it is thereafter increased by cost-of-living adjustments.
How workers' compensation can reduce your SSDI benefits
Workers' compensation and certain public disability payments reduce SSDI when the combined total passes 80 percent of your average current earnings before you became disabled. SSA explains the rule in its publication on workers' compensation and other disability payments, and the amount over that cap comes off the SSDI payment.
The payments that count are workers' compensation for a job-related injury or illness and public disability benefits paid by a federal, state or local government for conditions that are not job-related, such as civil service disability or state temporary disability. Private pensions and private insurance do not reduce SSDI, and neither does SSI. State and local government benefits are exempt when Social Security taxes were deducted from your earnings.
SSA's own example uses $4,000 in average current earnings. Eighty percent of that is $3,200, so if SSDI and workers' compensation together come to $4,200, the $1,000 difference is subtracted from SSDI. The formula result and the amount that reaches your bank account are not always the same number, and this offset is one of the reasons why.
The family maximum on SSDI benefits paid to your household
The family maximum caps the total monthly benefits paid on one disabled worker's record, including what a spouse and children receive. For a worker first entitled to SSDI after June 1980, 20 CFR 404.403 compares 85 percent of AIME with the PIA, takes the larger, compares that with 150 percent of the PIA, and uses the smaller result.
Carry the same $3,000 AIME forward. Eighty-five percent of AIME is $2,550, which is larger than the $1,705.80 PIA. One and a half times the PIA is $2,558.70. The smaller of $2,550 and $2,558.70 is $2,550, so that is the family maximum in this example.
The cap works like a household budget line. When benefits for a spouse and children would push the total past it, the family members' benefits are reduced so the total fits. The regulation notes that some families receive no added benefits at all, because the maximum does not exceed the PIA. SSA's 2026 average for a disabled worker with a spouse and children is on our page about how much disability pays.
Questions People Ask About This
Does a VA disability rating reduce my SSDI benefit?
No. SSA's publication on other disability payments lists Veterans Administration benefits among the payments that do not reduce SSDI, so a VA rating does not trigger the workers' compensation offset. Your SSDI amount still comes from your earnings record and the formula on this page, whatever your VA percentage is.
When does the workers' compensation offset stop?
The reduction lasts until the month you reach full retirement age or until the workers' compensation or public disability payments stop, whichever comes first. If the other payments end early, the reduction ends with them. Keep records of every change in those payments so the offset can be checked against what you were actually paid.
Do cost-of-living increases apply to my SSDI amount?
Yes. The Social Security Act sets the PIA by formula and then increases it by later cost-of-living adjustments, and the adjustment for 2026 is 2.8 percent. SSA's own worked example shows a worker first eligible in 2027 becoming able to receive a first increase effective for December 2027, so the increases follow the year of eligibility rather than the date a claim is approved.
Sources
- SSA Office of the Chief Actuary, Bend points
- SSA Office of the Chief Actuary, PIA formula
- Social Security Act section 215
- SSA Office of the Chief Actuary, Indexing factors
- SSA Office of the Chief Actuary, Benefit calculation examples
- 20 CFR 404.211 (SSA copy)
- 20 CFR 404.317 (SSA copy)
- 20 CFR 404.403 (SSA copy)
- SSA, How Workers' Compensation and Other Disability Payments May Affect Your Benefits, Publication No. 05-10018
- SSA, 2026 COLA Fact Sheet