SSI and SSDI: Everything You Need to Know About Retroactive Back Pay

• Author: Chris Remington
• Posted: 2024-07-04

Americans who rely on government programs for financial assistance are often confused by the programs and the rules for getting aid.

The two primary programs that step in when you’re in need are the Supplemental Security Income (SSI) and Social Security Disablity Insurance (SSDI).

What is SSI?

SSI stands for Supplemental Security Income. It is an assistance program that provides monthly benefits or financial assistance to people in need.

The individuals eligibile for SSI are those who have limited resources and income, and who meet standards of disability, blindness, or are over 65 years old. Children who meet the disability or blindness threshold are also eligible.

What about SSDI?

If you have worked enough hours in your lifetime, and paid Social Security taxes on your income, you and some of your family members are eligible for SSDI benefits.

SSDI eligibility hinges on disability and work credits. This isn't the same as the Social Security income that you get when you retire.

Filling the Gap

The 'what' of these programs are easy to understand. People often get confused, however, about the time between the onset of their disability and when they apply for benefits. There's also the even longer months-worth of wait after application.

Regarding this confusion, here's the answer: the Social Security Administration (SSA) does cover your wait time, in the form of either back pay, retroactive pay, or both.

Back Pay

For both SSDI and SSI, you’re eligible for benefits that cover the time period between your application and the approval.

Back pay is the common term for what the SSA calls past-due benefits — the months when you were eligible for compensation, but had not yet been approved.

If your claim for benefits was initially denied and you challenged that decision and won, you will get money for all those months or years between application and approval.

One big difference in SSI and SSDI back pay is the origination date of your claim — the date of entitlement on your forms.

• SSDI benefits: claims are paid out based on the onset date of the disability, not the application date.
• SSI benefits: payments are based on the application date, regardless of the date the disability occurred. There is no mandatory waiting period for SSI claims, so you won’t have that five-month dead zone for payments.

SSDI Requires a Waiting Period

Not all disabilities are permanent, so the SSA requires that you wait five months before filing an SSDI claim.

Here’s how it’s confusing. If you are applying for SSDI compensation, you’ll get back pay for the elapsed time between the onset date and the approval date, minus a mandatory five-month waiting period. SSDI will not cover the first five months after the disability occurs.

Here’s an example: If the onset date of your disability is confirmed as March of 2021, then you won’t receive any money until at least August, and nothing for those first five months. If your application was approved in March of 2022,  your back pay will cover the months between August and March.

Millions of people apply for SSDI benefits every month, so the chances that your application will be approved within those five months are quite slim.  Even with that five-month gap, this back pay  can add up to a lot of money. You are eligible for up to 12 months of back pay.

If you have been diagnosed with ALS, the waiting period is waived and you will receive benefits immediately.

SSI Rules

Again, if you’re applying for SSI benefits, those are not work-related, so there is no waiting period to qualify. 

However, even if you were born with the disability, you can’t claim compensation until the date you apply for benefits.

This is not a typical scenario as most claimants for SSI disability benefits receive their ongoing funds as children. Older citizens who become blind or disabled do have to start the clock on their claims on the disability onset date.

Retroactive Pay

If you’re applying for SSDI benefits and the idea of going five months with no income sends you into a panic, you can also qualify for retroactive pay.

This covers the entire time period between the date of the disabling injury and when you applied for benefits.

SSI applicants are not eligible for retroactive pay.

Rules Determining SSDI Retroactive Pay

SSA may approve retroactive pay that covers a year prior to your application date for benefits.

This makes sense as it could take that long to determine that the injury has resulted in permanent disability.

SSA uses the date you first filed for benefits as the onset date, so it’s important that you or a family member file for this compensation as soon as possible after the injury.

Doing the Math

Here’s the bottom line. If you’re applying for SSDI benefits, the maximum amount you can collect before your monthly payments begin is 12 months of retroactive pay, and back pay that is limited to five months post-onset and the approval date.

Here’s how your benefits are paid out:

• If you’re only applying for SSDI, you’ll get a lump-sum payment for the entire amount.
• If you’re claiming SSI and SSDI benefits, you’ll get that sum in three equal payments, in six-month intervals.
• If you’re claiming SSI and SSDI benefits and you need cash for essential expenses like housing, medical needs, food, or debt repayment, you can get larger first and second installments.

SSDI and SSI applicants who are not expected to live beyond 12 months may qualify for one lump-sum payment.

SSDI claimants may also get a lump sum if they are no longer eligible for SSI benefits.

SSDI recipients may exceed the income limits for SSI compensations once their benefits kick in, so that’s how you can lose that eligibility.

When You Can Expect the Money

Just because you’ve been approved for SSDI or SSI benefits doesn’t mean you’ll get the funds immediately.

Once you have notification of approval, it could take a month or two for your relief to hit your bank account. You might even get your monthly payment before you get your back or retroactive pay.

SSA will either mail you a check or make a direct deposit into your account. Direct deposit is faster and with less room for error that can happen with the mail.

For more detailed information and assistance regarding retroactive pay with SSI or SSDI, please visit the official Social Security Administration website at https://www.ssa.gov/benefits/disability/apply.html