How the Social Security Administration Calculates the Benefits Owed

When the agency or a judge rules that you have been disabled, it must be determined how much you are owed. The two disability programs, Social Security Disability Insurance Benefits, and Supplemental Security Income (SSI) disability benefits, have different rules for calculating how much you are owed.

First, the Social Security disability insurance program does not pay the first five months that you are disabled. For example, if you became disabled January 15, 2012, no benefits would be paid for February–June, 2012. Your monthly check is your primary insured amount (PIA), which is based on your payroll withholding and is the same as your full retirement check. Your children that are 18 and under may also receive an additional check on your earnings record.

Second, each month’s benefits are paid in the following month. This means that your July check arrives in August, your August check arrives in September, and so on. This means that if you became disabled January 15, 2012, and your first month of benefits is for July, you do not see your first month of benefits until August.

Third, the Social Security Administration does not pay benefits for more than a year before you applied. Therefore, if you applied on June 1, 2012, and prove that you became disabled in 2009, you will only be paid arrearage for the 12 months before June, 2012.

For Supplemental Security Income disability benefits, the rules are different. You cannot be paid for any time before you filed an application. You go into pay the first month after you applied. Consequently, if you applied for benefits on February 12, 2012, and proved that you became disabled on in 2011, your first month of benefits would be March, 2012. SSI does not pay a benefit for dependent children.

Obviously, benefits cannot be paid for the months before you became disabled. Therefore, if you applied for benefits in January, 2012, but the agency or a judge determined that you became disabled later, you are paid starting the first month after onset.

Also, the arrearage, also known as the underpayment, in SSI claims is paid in installments. You can receive no more than three times the federal benefit rate in your first two installments. The federal benefit rate in 2015 is $733. Consequently, the maximum check for a first installment of SSI is $2,199. Six months later, you will receive the same amount. In the third installment, six months after that, you will receive the remainder of what they owe you. You end up waiting a full year to see all of your backtime.

The SSI benefits are offset, or subtracted, from the disability insurance check, if the money from the disability insurance check would have produced too much income for the claimant to be eligible for SSI. Claimants who are entitled to both disability insurance benefits, and SSI benefits, sometimes have to make a decision about how they wish to receive their checks. That is, they can elect to receive all of their back time as disability insurance benefits, or elect to receive some of it as SSI. The advantage of receiving it as disability insurance benefits is that the total amount of money arrives faster, because they do not break up disability insurance benefits into installments. The disadvantage is, if you need retroactive Medicaid, you will not get it. This could keep your hospital bill from being paid.

With disability insurance benefits, Medicare is payable on the 30th month after the onset of disability. With SSI benefits, Medicaid is payable, with no waiting period.