How Is Social Security Back Pay Calculated?

Social Security back pay is calculated based on the date the Social Security Administration (SSA) determines a person became disabled and the time it took to approve their claim. Back pay is usually issued as a lump sum for SSDI, while SSI payments may be split into installments depending on the amount owed.

For SSDI, back pay includes any months between the application date and the approval date, plus up to 12 months of retroactive benefits if the disability began before applying. However, the five-month waiting period applies, meaning the first five months after the disability onset are not paid.

For SSI, back pay only covers benefits starting from the application month, with no retroactive payments before that date. An experienced Greenville Social Security Disability lawyer can explain in more detail how Social Security back pay is calculated in your case.

How Back Pay Is Calculated for SSDI

When you apply for Social Security Disability Insurance (SSDI), you may be eligible for back pay, which covers the period between your disability onset and the date you start receiving benefits. The calculation of back pay depends on several factors. A Social Security Disability attorney can determine how the unique details of your case impact your SSDI back pay.

Date of Disability Onset

This is the date the SSA recognizes as the start of your disability. The SSA uses medical records and other evidence to determine when your disability first affected your ability to work.

Application Date

This is the date you submit your SSDI application. Your back pay starts from the date of your approval, but it’s important to apply as soon as possible to avoid losing benefits.

Approval Date

Your SSDI benefits officially begin when your application is approved. The SSA may take some time to process your application, and back pay is calculated from the approval date.

Five-Month Waiting Period

SSDI has a mandatory five-month waiting period. This means that even if you were disabled earlier, the first five months after your disability onset are not paid. For example, if your disability started in January, your benefits would begin in July, after the five-month waiting period.

Retroactive Pay

If your disability began up to 12 months before the application date, SSDI allows retroactive pay for those months. This means you could receive back pay for up to a year before you applied, as long as the SSA finds that you were already disabled during that time.

However, the five-month waiting period still applies, so you would not be paid for the first five months after your disability began.

How Back Pay Is Calculated for SSI

For Supplemental Security Income (SSI), back pay is calculated differently than for SSDI. For SSI, back pay starts from the date you apply and does not include any months before that. 

Unlike SSDI, which allows retroactive pay for prior months, SSI does not provide benefits for the time before you submit your application. Once your SSI application is approved, back pay is usually paid in smaller installments rather than as a lump sum, especially if the amount is large.

Application Date

SSI back pay only covers the period starting from the date you submit your application. This means no payments are made for months before you applied, even if you were disabled earlier.

No Retroactive Payments

Unlike SSDI, SSI does not offer retroactive pay for months before the application date. Payments will only begin in the month you file your application and continue after approval.

Installments

If you are owed a large amount of back pay, it is typically paid in installments rather than a lump sum. The SSA may break up the payments into monthly amounts to make it easier to manage. This is especially common if you are owed a significant sum.

How Social Security Payments Are Calculated

Your monthly SSDI benefits are calculated based on a formula that takes into account your average monthly income over your work life. The process starts by averaging your monthly wages over your career.

This amount is then compared to the average wage of all workers in the second year before you become eligible for benefits. The result of this comparison is called your Average Indexed Monthly Earnings (AIME).

Once your AIME is determined, the amount you will receive each month, known as your Primary Insurance Amount (PIA), is calculated using a specific formula:

• You receive 90% of the portion of your AIME that is $387 or less.
• You receive 32% of the portion between $387 and $2,333.
• You receive 15% of the portion above $2,333.

A Lawyer Will Help You Calculate Social Security Back Pay

With over 50 years of combined experience, Pilzer Klein, PC, will compassionately guide you through the complex process. Our lawyers focus solely on Social Security Disability cases, making us well-equipped to handle all the details of your claim.

We work on a contingency fee basis, meaning you only pay if you win your case. This makes legal assistance more accessible. Call today to discuss your options.