When you are approved for Social Security Disability Insurance (SSDI) benefits, you should receive a lump-sum payment covering the time from your application date to your approval date. This is known as your back pay. If you can prove that you became disabled at least five months before you applied for benefits, your lump sum payment might also include additional money to cover those months. This is known as retroactive pay.
You will receive this money in a single check if you are approved for SSDI. If you are approved for Supplemental Security Income (SSI), you will receive your back pay in a series of two to three installments, and you will not be eligible for retroactive benefits.
How Is My SSDI Back Pay Calculated?
Once you get approved for SSDI, your back pay covers the months that you would have been paid benefits had the Social Security Administration been able to approve your application the same day you submitted it.
Since that never actually happens, and approval takes several months on average, you are almost always owed multiple months worth of benefits at the time you get approved. The month following your approval, you should receive a lump-sum check covering those months. This is your back pay.
An Example for Calculating Back Pay
Suppose you became disabled in August and applied for benefits five months later, in January. Four months after that, in May, you receive a letter saying you have been approved, and that your benefit amount is $1,500 per month. Now, if you had been approved in January, you would have started receiving benefits in February.
But since you were not approved until May, you do not start receiving benefits until June. So the SSA owes you benefits for the months of February, March, April, and May. Since you are owed four months of benefits at $1,500 per month, you would receive a lump sum check for $6,000 in June.
How Is My SSDI Retroactive Pay Calculated?
Retroactive pay differs from back pay in that it covers the months before you even applied for benefits. You are eligible to receive retroactive SSDI benefits only if you can prove to the SSA that you became disabled more than five months before your application date.
This is because SSDI applicants have a five-month waiting period to begin receiving benefits. So if you apply within five months of becoming disabled, as in the above example, you are not eligible for retroactive pay.
An Example of Retroactive Pay
But suppose you became disabled in August but did not apply for SSDI until the following August. Then, four months after that, in December, you get approved for benefits at $1,500 per month. Your back pay, then, would be $6,000 per month. Remember, it covers only the period between your application date and your approval date.
If you receive retroactive pay on top of your back pay, it covers the period that starts five months after your date of disability and runs until your application date. So in this example, since you became disabled in August, your five-month waiting period would have ended the following January. Your retroactive pay would cover the months of January through July, or seven months. Seven months times $1,500 per month is $10,500 of retroactive pay.
How Do Back Pay and Retroactive Pay Work for SSI?
If you are approved not for SSDI but for SSI, first, you are eligible to receive back pay only. SSI does not offer retroactive pay. Also, you will receive your back pay in a single lump-sum check only if it is for less than three times the maximum monthly SSI benefit, which, as of 2018, stands at $750.
Otherwise, you will receive it in two or three installments depending on how large the sum is. These installments are paid in six-month intervals, and neither of the first two installments can be for more than three times the minimum, or $2,250.
For instance, if your back pay totals $7,500, then your first and second installment checks would be for $2,250 each, totaling $4,500. Then, six months after your second check, you would receive a third and final check for the remaining $3,000.
To Schedule a Free Case Evaluation With a Social Security Disability Lawyer, Call the Law Offices of Ogle, Elrod & Baril, PLLC, Today at 866-628-8179
If you have additional questions about receiving a lump-sum payment when approved for SSDI insurance benefits, a Social Security disability attorney from the Law Offices of Ogle, Elrod & Baril, PLLC, is happy to help you. For a free case evaluation, call 866-628-8179.