Computation years are an important component in determining when a person is eligible for Social Security Disability benefits and how much their payments from the Social Security Administration will be – particularly when it comes to Social Security Disability Insurance (SSDI).
The computation period comes into play when an applicant's wages are taken into account, and past earnings are updated to reflect current wage growth. This is because payments are not dictated based on the applicant's condition, but based on their working past and your earnings prior to becoming unable to work.
The Social Security Administration takes the earnings from the highest-earning 35 years of all the years that you worked, averages them, and divides by 12 (for each month of the year). This figure is called the Average Indexed Monthly Earnings (AIME).
The AIME is then worked into the formula used by the SSA to determine payment amounts. This results in the amount that would be available to the applicant when they reach full retirement age, since this formula is used for both disability and retirement benefit payments.
In the cases where an applicant has less than 35 years of work experience, the Social Security Administration will put in zeroes for each year needed to reach 35 during the averaging process to determine the AIME. As such, your benefit payments will be lower. These 35 years make up the computational period that determines the AIME.
The average Social Security Disability payment in 2017 is around $1,265, while the maximum amount an individual can receive in 2017 is $2,687. Many applicants receive monthly payments hundreds of dollars above and below the average, as the formula determining how much a monthly payment will be depends on the applicant's unique circumstances.