# Primary Insurance Amount

The Primary Insurance Amount (abbreviated PIA[1]), for the purposes of the Social Security Administration, is the amount that is used as the beginning point in calculating any benefit payable under Title II of the Social Security Act. This amount helps decide the amount of the insurance benefits payable to each beneficiary on a social security record and the maximum amount which can be paid on that record. Generally, the more a person pays into the Social Security Trust Fund during their life, the higher their PIA will be. However, specific rules in its computation may deviate from this general rule.

## Computation

Since the Social Security Act was first signed in 1935, new legislation has provided for various ways of computing the PIA. In order to assure that those already receiving benefits are not harmed by newer methods designed to provide more benefits for others, the highest PIA through any applicable method is used.[2]

### DIB Freeze

Social Security procedures indicate that a workers's earnings record can be “frozen” at the time he or she qualifies for a period of disability, thereby preserving the individual's insured status and preventing the loss of future retirement or disability benefits which may be computed without considering periods of disability. A period of disability for a worker is therefore often referred to as a “disability freeze.”[3]

### Normal computations

The primary means of calculating PIAs are the following computation methods. These methods apply in most cases, rather than a handful of cases.

#### 1978 New Start Method

All benefits payable to beneficiaries eligible after 1978 may use the 1978 New Start Method,[4] also known as the Average Indexed Monthly Earnings (AIME) PIA.[5]

To determine the value of this PIA:[6]

• 1. Determine the Elapsed Years (EY), the Computation Years (CY), and divisor months.
• EY are calculated by taking the earliest of the year the beneficiary obtained the age of 62, became disabled (if for DIB benefits), or died and subtract the later year of 1951 or the year the beneficiary obtained the age of 22. If DIB Freeze applies, exclude any years partly or wholly within a period of disability.[7][8][9]
• CY are computed by taking the number of EY and subtracting 5; this will give you the beneficiary's base years (BY). The number of BY is the number of years that will be CY; only the highest years are used.[10][11] For example, if a beneficiary is born in 1960, obtained the age of 22 in 1982 and becomes disabled in 2012, there are 30 EY (2012 - 1982 = 30); there are 25 BY (30 - 5 = 25); and so the beneficiary's best 25 years are used to compute his or her benefit.
• Divisor months are the number of months in the CY, essentially CY multiplied by 12.[12]
• 2. Index the earnings and compute the dividend
• 3. Determine the Average Indexed Monthly Earnings (AIME)
• 4. Compute the PIA using the applicable PIA formula
• 5. Add any applicable cost of living adjustments

#### New Start Transitional Guarantee PIA Method

The New Start Transitional Guarantee PIA Method may only be used for beneficiaries who:[13]

• obtained the age of 62 between 1979 and 1983
• are receiving Retirement Insurance Benefits (RIB) or survivor's benefits
• In the case of survivors benefits, the person whose record is being claimed from must have died in or after the month in which they obtained the age of 62
• have some earnings credited to their record prior to 1979
• have not received Disability Insurance Benefits (DIB) prior to 1979 unless there is a 12 month break between entitlement to DIB and entitlement to RIB

#### 1977 Simplified Old Start Method

The 1977 Simplified Old Start Method may be only be used for beneficiaries who:[14]

• have a date of birth between January 2, 1916 and January 1, 1929 or be born after January 1, 1929 and have less than six Quarters of coverage (QC) after 1950
• have no period of disability which began prior to 1951 and used freeze computation (DIB Freeze PIA)
• have attained the age of 62, died, have had a freeze computation disability onset or after the age of 62 had a non-freeze computation

#### 1967 Simplified Old Start Method

The 1967 Simplified Old Start Method may be only be used for beneficiaries who:[15]

• filed an application for RIB or DIB after January 2, 1968 or died before that date without entitlement to either benefit, or the benefit is being recomputed or recalculated
• have at least one QC prior to 1951
• were born before January 2, 1916 or were born after January 1, 1930 and has less than six QCs after 1950
• have no period of disability which began prior to 1951 and used freeze computation (DIB Freeze PIA)
• cannot use the 1977 Simplified Old Start Method

#### 1965 Old Start Method

The 1965 Old Start Method may be only be used for beneficiaries who:[16]

• effectively filed an application for RIB or DIB after 1965, or who could first apply or who died after 1965 without RIB or DIB entitlement, or whose benefits are being recalculated
• have at least one QC prior to 1951
• were born before January 2, 1929 or were born after January 1, 1929 and have less than 6 QCs after 1950
• can use neither the 1977 Simplified Old Start Method nor the 1967 Simplified Old Start Method

#### 1965 New Start Method

The 1965 Simplified New Start Method may be only be used for beneficiaries who:[17]

• effectively filed an application for RIB or DIB after 1965, or who could first apply or who died after 1965 without RIB or DIB entitlement, or whose benefits are being recalculated
• can use neither 1978 New Start Method or New Start Guarantee PIA Method

## Sources

Social Security Program Operations Manual System. Social Security Administration. https://s044a90.ssa.gov/apps10/poms.nsf/partlist!OpenView.