What Is Social Security Disability Back Pay?

Social Security Disability (SSDI) is awarded to those who’ve experienced a disability that has rendered them unable to work in their previous capacity. It can be a long, complicated process. However, once you win, you’re eligible for SSDI backpay starting from the date you filed your disability claim. Sometimes, even earlier.

Experiencing disability can be both a physical and emotional struggle worsened by the financial strain of losing your income. Added to the strain is the lengthy and stressful process of applying for SSDI. However, understanding the process and how Social Security Disability backpay works can provide a sense of control and alleviate some of the stress.

The amount of SSDI payback you’ll get is determined by the date you became disabled and the date you applied for benefits. Let’s explore how the SSDI backpay amount is determined.

How Social Security Disability Backpay is Calculated

Most applicants awarded SSDI benefits also get back pay for the time lapse between the date they became disabled and the date the benefit payments start. The longer you have to wait for your SSDI benefits to start, the more disability backpay you’ll receive.

SSDI backpay is calculated based on four main factors:

1.      Your application date—Typically, you’ll receive SSDI backpay benefits for the months between the date you filed your application and the date your monthly benefit rate is approved. Social Security may take three to 24 months, or even longer, to approve your benefits.

2.      The date of your disability—the onset of your disability is when your SSDI waiting period begins. Typically, the minimum waiting period to file for benefits is five months. When you filed your application, you were asked to indicate the date you think the disability began. This date becomes your “alleged onset date.” However, when the Social Security Administration (SSA)  approves the disability application, they assign an “established onset date.” These two dates do not always match.

3.      The waiting period—Social Security assigns applicants an established onset date (EOD) and then pauses the process for a five-month waiting period. This waiting period is a standard requirement for all SSDI applicants, and it is designed to ensure that benefits are only paid for long-term disabilities.

4.      Your benefit amount—SSDI benefits are calculated using a formula based on your average lifetime earnings. The SSA refers to this as your “average indexed monthly earnings” (AIME).

After your waiting period ends, the first day of the following month is the “date of entitlement” (DOE). This is the date when the SSA begins owing you monthly benefits. The DOE is significant as it also dictates when Medicare coverage starts.

Most people wait many months to apply for benefits. The SSA has a rule that the five-month waiting period can’t start earlier than 17 months before the application date, which limits benefits to one year before the application date. (17 months minus the five-month waiting period).

Backpay vs. Retroactive Benefits—Learn the Difference

The Social Security Administration refers to the monthly payments owed from the date of your application as “past due benefits” or back pay. These benefits are owed to you from the date of your application to the date they approve your disability benefits.

But what about all those months you couldn’t earn income because of your disability before you filed your claim? Those are referred to as “retroactive benefits.” You will receive retroactive benefits if you can:

• prove you were disabled before you applied for SSDI
• your disability lasted for at least five months prior to your application date

Social Security generally calls the monthly payments you’re owed going back to the date of application “past due benefits.” Past-due benefits are owed to you from your application date (assuming you were disabled then) to the date the SSA approves your disability benefits. 

“Retroactive benefits” are the benefits that cover the period from when your disability started to the date you applied for SSDI, minus the five-month waiting period. 

Past-due benefits and retroactive benefits are often combined under the umbrella term of SSDI backpay. 

Navigating the Disability Process

The Social Security Disability Insurance (SSDI) process can seem overwhelming, especially when you are already dealing with health issues that lead to your disability, the financial stress of being unable to work, and the emotional toll it takes.

In addition, it’s not uncommon to have your first application for SSDI denied. Though stressful, it’s helpful to remember that if you’re later awarded benefits, you will receive backpay for the entirety of the process as a lump sum. Applying for and receiving SSDI benefits is typically a lengthy process, so backpay is often substantial. You may want to visit with a financial advisor to explore your options for managing your back pay.

That is why hiring an attorney specializing in SSDI claims may be the right idea for you. Visit the Social Security Administration to learn more about the filing process and how to get started on your SSDI claim.