Primary Insurance Amount

Massachusetts Lawyers Helping Individuals Pursue Social Security

Calculating the benefits that a Social Security Disability Insurance (SSDI) applicant is likely to receive is a notoriously complicated process. The Social Security Administration (SSA) utilizes a formula with multiple variables in order to precisely determine benefit amounts. As a result, many applicants, while concerned with the ultimate amount that they will receive, are unclear on the process used to determine that amount. At Kantrovitz & Associates, P.C., our Social Security attorneys believe that it is important that all Massachusetts disability applicants understand the basic concepts that contribute to their benefits determination. For that reason, we are always available to help walk you through a benefits calculation, including a determination of primary insurance amount (PIA).

How Your PIA Is Calculated and Why it Matters

PIA is the amount of Social Security benefits that an individual would receive if he or she were to start receiving retirement benefits at the standard age of 65. This amount is determined by the Social Security Administration (SSA) and is one of the basic components used to determine how much you will receive in SSDI benefits, along with your average indexed monthly earnings. When you receive benefits before reaching the retirement age of 65, or retire earlier than 65, your PIA is reduced. If an individual retires later than 65, or begins to receive SSDI at an older age, his or her PIA may increase.

Calculating PIA is somewhat complex and involves an individual’s average indexed monthly earnings, the year in which he or she will begin to receive SSDI benefits, and the normal retirement age. The SSA will first calculate three fixed percentages of an individual’s average indexed monthly earnings and will use these percentages to determine PIA. These three difference percentages, and the dollar amounts that are their equivalents, are known as “bend points.” These bend points change each year as a reflection of changes in the national wage index.

The three bend points are:

  • 90 percent of the first $791 of average indexed monthly earnings;
  • 32 percent of the average indexed monthly earnings for earnings between $791 and $4,768; and
  • 15 percent of the average indexed monthly earnings over $4,768.

As mentioned above, the exact dollar figures for each of these categories may change in response to changes in the national wage index.

While these percentages form the basis for determining PIA and SSDI benefits, many other factors may also be considered by the SSA, including whether a disability freeze was ever in effect for the applicant, whether there was ever a break in entitlement to SSDI, and whether the applicant has ever received survivor’s benefits. Overall, these factors act to make the SSDI benefit calculation even more complicated than it already was.

Discuss Your Government Benefits Application with a Massachusetts Attorney

Although there is no requirement that disability applicants be expert mathematicians, a careful review of the SSA’s benefits calculations may leave you feeling that an advanced degree is required in order to understand what is really going on. At Kantrovitz & Associates, P.C., our government benefits lawyers can help Massachusetts residents understand the SSDI eligibility process by explaining complex concepts like PIA. From our Boston offices, we represent individuals from Rhode Island to New Hampshire and in communities throughout Norfolk, Middlesex, and Plymouth Counties, among other areas. Contact us for more information at (800) 367-0871 or online.