How Is My Social Security Back Pay Calculated?

Social Security Back Pay ExplainedIn many situations, once you are approved for Social Security benefits, you may also be awarded accrued benefits. Accrued benefits are also known as Back Pay. The calculation of Back Pay depends on a few different factors: 1) the established onset date of your disabling condition; 2) the type of benefits for which you are approved; 3) the condition for which you are approved.

It is important to note that there are certain circumstances that can result in deduction, reduction, and nonpayment of monthly benefits.

"Alleged Onset Date" vs "Established Onset Date"

The Alleged Onset Date is the date you tell Social Security that you became disabled as a result of your conditions. The Established Onset Date is determined by a DDS examiner or an administrative law judge acting on behalf of the Social Security Administration. The Social Security Administration will determine the date when the evidence, including your medical records, supports finding that you became disabled. Sometimes, the Alleged Onset Date and the Established Onset Date are the same, but not necessarily.

The Established Onset Date could be different from the Alleged Onset Date for a variety of reasons. For example, a claimant might not have met work or income requirements at the Alleged Onset Date, but later meets those requirements. Another example would be that the impairment or condition worsens over time. It is important to remember that being diagnosed with a disabling condition is not always the same as meeting Social Security’s requirements of disability.

Back Pay for SSDI Recipients

Once you're approved for SSDI benefits, there is a waiting period of five months before benefits will begin, and your benefits begin to accumulate in the sixth full month after the Established Onset Date. The Social Security Administration only counts full calendar months, so if you become disabled in the middle of a month, that month will not count towards your Back Pay. For example: if you applied for SSDI and your established onset date is May 20, 2019, your benefits would begin accruing on November 1, 2019.

The number of months of Back Pay you receive will depend on how long it takes for Social Security to approve your benefits. Because of the five-month waiting period, if you are approved in five months or less, you will not be entitled to any Back Pay. Because the waiting period cannot begin more than 17 months before the application date, the maximum Back Pay accumulation is 12 months prior to the date of application.

If you are approved for benefits on or after July 23, 2020 based on the condition of amyotrophic lateral sclerosis (ALS), there is no waiting period.

Back Pay accumulated under SSDI can be received as a lump sum. Normally, individuals who are approved will receive benefits within 120 days from the date of approval. However, this estimate can vary depending on the circumstances of your case.

Back Pay for SSI Recipients

These benefits begin to accumulate on the first day of the month after the date of the application that you filed your application. If you applied on May 20, 2019, and your established onset date is April 15, 2019, your benefits would begin accruing on June 1, 2019. However, if you applied on May 20, 2019, and your established onset date is June 15, 2019, your benefits would begin accruing on July 1, 2019.

Back Pay accumulated under SSI generally is not paid as a lump sum, but in two to three installments paid at 6-month intervals.

If You Are Awarded Both SSDI and SSI Benefits...

You may have to wait longer for your Back Pay than you would if you were only receiving SSDI benefits. Your benefits may also be adjusted in accordance with Social Security’s windfall offset provisions. The amount of SSI benefits awarded is based on a claimant’s income, so if you qualify for benefits under both SSDI and SSI, your Back Pay under SSDI will count as income for SSI purposes. When Back Pay is paid, your SSI benefits will automatically be reduced to take into consideration this Back Pay “income.” The adjustment to SSI benefits is calculated by treating your SSDI Back Pay as having been available to you throughout the disability period.

Social Security may subtract certain other offsets or fees from this lump sum. For example, Social Security has the ability to pay your representative directly based on your fee agreement and could deduct this fee from your Back Pay. Other deductions could be based on work income, receipt of Workers’ compensation benefits, or your eligibility for other benefits from the Social Security Administration.

How Social Security Payments Are Calculated

Your monthly SSDI benefits are calculated using a formula based on your monthly wages or income. Your monthly wages are averaged over your work life. This amount is then divided by the average wage of all workers in the second year before you become eligible for benefits. The resulting amount is referred to as your Average Indexed Monthly Earnings, or AIME.

Under the current formula, if you are awarded benefits, you will be issued 90% of your AIME under $387, 32% of everything over that but under $2,333, and 15% of anything beyond that as your Primary Insurance Amount or PIA—the amount you will receive each month. This result of this calculation becomes the basis for determining how much SSDI Back Pay you will receive.

For example, if your AIME is $3,000, then your PIA would be $348.30 (90% of $387) plus $622.72 (32% of $1,946) plus $100.05 (15% of $667) for a total amount of $1,071.07. If you are entitled to five months of Back Pay, then your lump sum Back Pay would be $5,355.35.

Our Social Security Attorneys Are Here to Help

If you're finding yourself confused by the payment schedules for your disability benefits, our team of experienced and dedicated Social Security lawyers are here to help. And if you're considering applying for benefits or have been denied and need to appeal, we can help with that too. Contact us today to schedule your free, no-obligation consultation.

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