Social Security calculates benefits over a lifetime of work, using 35 years of work for retirement benefits. Social Security bases disability benefits calculations on your average lifetime earnings, adjusting or indexing older income to reflect current value. If you do not have 35 years of work history, Social Security uses the work history you have.
A worker needs 10 years or 40 credits of work history for retirement benefits, but Social Security may base disability benefits on as little as six credits over three years immediately before the disability. This is a year and a half of work history. Social Security uses duration of work or recent work to calculate if you qualify for disability benefits if Social Security finds you disabled. Duration of work requires two years of employment if your disability starts at age 30 and seven years at age 50, with many points between. Your age and your work history help determine your qualification for Social Security disability benefits.
Social Security does not pay disability benefits on anything less than total disability. Disability under Social Security standards requires that you not be able to participate in substantial gainful activity. This is in any field, not just the job you did before your disability. Social Security bases disability benefits calculations on 100 percent disability. Your disability must last for six months before a benefits award and must last more than a year or be terminal for you to qualify.
Social Security bases calculations for disability on the same factors as retirement benefits. It indexes past income for current value. Social Security arrives at an average indexed monthly earnings, or AIME. Computer calculations divide the AIME into three sections and arrive at the primary insurance amount or PIA. PIA is the full retirement age monthly calculation for the retiree at age 66. This calculation is 100 percent. A person retiring at age 62 receives 75 percent of PIA. A disabled person receives benefits based on calculations to the date of last employment, less reduction for workers' compensation or similar awards. Recalculation of disability benefits occurs every three years.
Benefits Planner and Statement
You receive a Social Security statement each year after age 25 that reflects your estimated retirement benefit payment and your estimated disability benefit payment. The retirement benefit calculations consider your future income at the current rate; the disability calculation considers income to the date of the calculations. You may request a Social Security statement if you do not have a current one or if you want a statement that is more current. You may use the disability benefits planner on the Social Security website to calculate your estimated disability payments as well.