Base years are utilized in computing Social Security benefits of all types, including Social Security disability. They are essentially the years from 1950 onward until the first month of the year that one becomes entitled to receive Social Security benefits. Base years are counted until you become completely disabled.
Base years directly affect how much a person is able to draw from their Social Security Disability Insurance Benefits each month. The base years in which a person earned the most income are used as 'computation years.'
The total amount that a worker earned in the computation years is added together and then divided by the amount of months in those years to figure an AIME (Average Index Monthly Earnings). This calculation, estimates the amount of how much money a claimant is entitled to on a monthly basis. Basically, a person may only recover a small fraction of what they actually made through their Social Security Disability Benefits.
It is important to note that these calculations are based on income made through work. It does not include any income from investments. Also, there is a $106,800 per year cap since the maximum amount of Social Security taxes a person pays annually is $106,800. For example, if a claimant made $126,800 in one of their base years, $20,000 of it will not be used in their benefit calculations.
