How Much Money Can You Make On Social Security Disability?

As professional Social Security Disability (lawyers/advocates), we understand how many questions people have regarding whether they qualify for disability benefits, how they should begin the application process, and how long they may have to wait before learning of the Social Security Administrations decision. But the most common question we hear from people who are thinking of filing an SSD claim is “How much money can I make on Social Security Disability?”

We’re here to help you answer all your questions about Social Security Disability benefits and your individual health and financial circumstances. Are you eligible? Do your medical records support a finding of disability? You’d be surprised how many people don’t realize they can be receiving SSD benefits every month but don’t know it. If you want to know more, call our office today to find out all the answers.

Determining The Amount Of Your Social Security Disability Benefits

The first step in finding out how much you can make on Social Security Disability (SSD or SSDI) is to find out if you have enough work credits. Work credits are earned at a rate of four per year for each year you earn a minimum amount of taxable income. To qualify for SSD benefits, a person typically needs to have 40 work credits, at least half of which were earned in the five years immediately preceding the date the disabilitye claim is filed.

The Formula To Find Your Social Security Disability Benefits Payment

To determine how much an SSD claimant’s monthly benefit payment will be, the Social Security Administration reviews the applicant’s entire taxable annual income history. The SSA identifies the 35 highest earning years the worker had and then “indexes” each year individually.

Indexing is a process in which the SSA adjusts each year’s income figure to account for the rise in the standard of living over the course of the worker’s employment history. 

When the figures for each of the 35 high-earning years are indexed, the 35 figures are added together and divided by 35 to find the average indexed annual earnings. Then, dividing that number by 12 produces the Average Indexed Monthly Earnings (AIME) figure. If the claimant worked fewer than 35 years, the SSA adds only the income that was earned in the fewer years and divides by 420, the number of months in 35 years. The resulting AIME figure is the starting point to which the SSA’s formula is applied.

The Formula for 2024:

• Add 90% of the first $1,174 of the AIME, plus
• 32% of the AIME between $1,174 and $7,078, plus
• 15% of the AIME above $7,078, if any.
• Round down the result to the next lowest $0.10 (dime) if not already divisible by 10.

The resulting figure is the amount of the claimant’s monthly SSD benefits payment. We can use a hypothetical worker to demonstrate how the formula actually works when applied.

Example:

Suppose a Social Security Disability benefits claimant worked for 25 years before they suffered a severe injury and became disabled. The SSA would take their 35 highest earning years’ income and index the figures for inflation. 

Then the numbers would be added together and divided to find the average yearly income. (Since the worker only reported income for 25 years, the other 10 years would be shown as zero income.)

Let’s say our hypothetical worker’s Average Indexed Monthly Earnings (AIME) was $5,880. We will run that figure through the formula to find out their monthly SSD benefit. 

• Add 90% of the first $1,174 of the AIME, = $1,056.60 plus
• 32% of the AIME between $1,174 and $7,078, ($5,880 – $1,174 = $4,706) 

So, $4,706 x .32 = $1,505.92, plus

• 15% of the AIME above $7,078. (Zero in this case since the AIME is below $7,078)

$1,056.60 + $1,505.92 + 0 = $2,562.52.

Rounded down to the next lowest $0.10 = $2,562.50

In this example, the worker’s monthly SSD benefit payment (also known as their Primary Insurance Amount, or PIA) would be $2,562.50.

Annual Cost of Living Allowance (COLA)

Using the 2024 formula, the example above illustrates the way the worker’s base monthly SSD benefit would be determined. It is also exactly the same method used to determine a worker’s Social Security Retirement benefit. The figures are equal. 

Each year, the Social Security Administration announces the size of a cost-of-living allowance to be added to all SSD benefit payments beginning in January of the following year. The announcement is usually made in November and is based on the rate of increase in the Consumer Price Index (CPI-W) for Urban Wage Earners and Clerical Workers.

In 2023, the COLA announced for SSD recipients in 2024 was 3.2%.