Average Indexed Earnings

Social Security Attorneys Committed to Assisting Massachusetts Residents

One of the first questions to cross a disability applicant’s mind upon learning that he or she has been approved to receive benefits is what amount will be granted. Monthly disability benefits can mean the difference between paying rent or eviction, or they even can allow an individual to provide for family members. For this reason, the amount of benefits to be received is often of fundamental importance. Unfortunately, calculating disability benefits is also exceptionally complicated, and it can take both time and patience to determine the amount of benefits you are entitled to. At Kantrovitz & Associates, our Social Security lawyers can take the time to advise Massachusetts residents on how their wages will translate into SSDI payments.

Average Indexed Monthly Earnings

Central to the calculation of SSDI payments is a determination of average indexed monthly earnings. Your average indexed monthly earnings are determined by taking your 35 highest years of indexed earnings (any year before the age of 60 can be included) and dividing the total of these 35 years by the total number of months that you worked during those years. Thus, if you worked every month, without fail, your average indexed monthly earnings would equal the sum of 35 years of work divided by 144 months. If you occasionally had to take months off due to medical issues or other circumstances, this calculation would vary slightly.

If you have worked for less than 35 years total before applying for disability, SSA will simply take the sum of all available years of work and divide this by the number of months worked. In either scenario, the average monthly earning resulting from this calculation is then rounded down to reach an average indexed monthly earning.

Indexed Earnings

Since wages earned 35 years ago no longer have the same value today, the SSA also employs an indexing system when determining average monthly earnings. For each year prior to the last two years of current employment, an individual’s yearly wage is multiplied by an “indexing factor” that increases the wage to account for inflation. Thus, for instance, for wages received in 1951, the SSA will apply an indexing factor of 15 or more and multiply this by the wages to determine the indexed earnings accounting for inflation. This helps to ensure that average wages are not underestimated on account of time.

How are Average Indexed Monthly Earnings Used?

Once your average earnings are calculated, the SSA will then determine your Primary Insurance Amount, which is the base amount of benefits you will receive, based on various data points from your average earnings.

Legal Guidance for Individuals in Massachusetts Pursuing Government Benefits

Determining the amount of Social Security benefits that you are entitled to can be a complicated and confusing process. The exact amount of benefits depends on the number of years you have been working, your earnings over those years, and how those earnings are indexed to account for inflation. The government benefits attorneys at Kantrovitz & Associates have helped many Massachusetts applicants and recipients estimate the amount of benefits that they may be entitled to. If you would like some assistance in this process, or have concerns about your benefits, contact us at (800) 367-0871 or online. From our Boston office, we proudly serve individuals throughout Plymouth, Suffolk, Essex, Norfolk, and Middlesex Counties.