Back Pay

Back Pay – Overview

Back Pay is a term referring to the benefits you would have received between the time you applied for claims and the time your claim was approved, less a five-month waiting period. SSDI retroactive back pay may potentially include compensation for the time period between your disability diagnosis and SSDI approval. After being authorized for SSDI or SSI benefits, you will receive your accrued Back Pay.

Since most claims are denied at least once before the claimant is authorized for benefits, the Social Security application process is typically lengthy, with months or even years passing while awaiting approval. Back Pay is another word for earned past-due benefits during the approval procedure.

How Is Restitution Determined?

Back pay is calculated based on the date you filed your disability claim and the date the Social Security Administration (SSA) determines your disability began, commonly referred to as the “established onset date.” A DDS examiner or an administrative law judge establishes the onset date based on your available medical records.

The manner in which Back Pay is delivered is determined on whether a claimant is accepted for Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or both.

SSI disability benefits begin accruing on the date your application is filed. Even if you have been living on extremely limited resources for months, you may not always receive your Back Pay immediately upon approval of your case. Occasionally, the waiting period for Social Security benefits is extended if your case must be decided by an administrative law court. Additionally, SSI Back Pay is given incrementally, but SSDI Back Pay is provided in one large payment. The claimed reason for the delay is because lump sum payments would place an undue financial strain on SSI.

If You Are Awarded Restitution

If you get both SSDI and SSI benefits, you may have to wait longer to receive your Back Pay than if you received only SSDI benefits.

SSDI disability benefits can begin accruing either on the day of application or up to twelve months prior to the application date, less a five-month waiting period. For all practical reasons, the five-month waiting period is an arbitrary reduction of what would have been your first five months of benefits. The longer you wait for your case to be approved, the less impact this waiting period will have on you. To further appreciate the five-month waiting period, consider the following two scenarios:

  • If you file for benefits and your claim is approved 5 months after that, you will be ineligible for Back Pay (5 month approval process, less 5 month waiting period). If your claim is approved within a year of filing, you are entitled to seven months of back pay (12 month approval process, less 5 month waiting period).
  • If your claim is approved within 24 months of filing, you are entitled to 12 months of back pay (even though a 24 month waiting period less a 5 month waiting period is 19 months, the limit for Back Pay is 12 months).

Unlike SSI, SSDI back pay can be received in a lump sum, although the timing of payment is more unpredictable. It is possible for a beneficiary to discover that their Back Pay payments have been transferred into their bank account without their knowledge, even before they are told that their disability claim has been approved. At times, ordinary benefits are paid before Back Pay, but at other times, Back Pay is paid first.

Additionally, your payments may be modified to account for windfall gains under Social Security’s windfall gain offset provisions. Because the amount of SSI benefits paid is determined by a claimant’s income, if you qualify for both SSDI and SSI, your SSDI Back Pay will be considered income for SSI purposes. When you receive Back Pay, your SSI payments are automatically decreased to account for this “income.” The adjustment to SSI payments is computed by assuming that you have access to your SSDI Back Pay throughout your disability period.

Consult a Social Security Attorney or Representative

In many circumstances, an experienced Social Security Disability attorney can assist you in establishing a favorable start date, ensuring that you receive the maximum amount of Back Pay available. To connect with an attorney, complete our Free Disability Evaluation form.