Ever wondered whether you’ll receive a large lump-sum payment once approved for disability benefits? If so, you are not alone. We recently received a question from a reader on this very topic: How much is SSDI allowed to pay in 12 months of disability backpay on an approved claim? (Note: SSDI stands for Social Security disability insurance, a benefit the Social Security Administration pays to eligible applicants.)
Answer: Disability backpay is the amount the SSA owes you from from the time you apply for SSDI until your approval date. Retroactive pay, on the other hand, covers up to 12 months prior to your claim when you were disabled, but hadn’t yet filed your paperwork.
To better understand this, it helps to consider how health issues actually affect workers in real life. If you’re too disabled to keep working, then your condition likely developed over time. Therefore, if you waited to apply for benefits until after your doctor initially diagnosed your disabling condition, then you may qualify for disability backpay.
The amount of your lump-sum disability backpay depends on your highest monthly job income during the past 35 years. The SSA calls this amount your “Average Indexed Monthly Earnings,” or AIME. Your benefit will be the sum total of the following three amounts:
- 90% of your AIME that falls below $960
- 32% of everything over that $960, but less than $5,785
- 15% of anything beyond that $5,785 as your Primary Insurance Amount
This total amount forms the basis for determining how much SSDI disability backpay you will get.
What Steps Determine Your Disability Backpay Amount?
A medical examiner reviews your condition to determine your Established Onset Date (EOD). Typically, this is the date you file your claim paperwork with the SSA.
- The Department of Disability Services (DDS) examiner in your state calculates your monthly SSDI benefit amount.
- Then, they calculate how much retroactive backpay you qualify for (up to 12 months).
- Finally, the SSA calculates how much SSDI backpay the SSA owes you. Once they determine that, the agency issues you an award letter in the mail. This letter states your monthly benefit amount and when to expect your first direct-deposit payment.
Retroactive pay covers the time period before your EOD, or “established onset date,” which is when a medical examiner first identified your condition. In most cases, a person’s disability starts long before their SSDI filing date. As a result, there may be a lump-sum retroactive payment available. Basically, imagine a year’s worth of disability benefits directly deposited into your bank account. That’s your standard SSDI retroactive payment.
To qualify for the full 12 months of retroactive benefits, your disability must begin at least 17 months before the date you file your claim. DDS medical examiners set your EOD. If you feel your EOD is incorrect, you’ll need to submit medical records that show an earlier onset date.
The most you can qualify for in terms of retroactive payments is 17 months. This includes your disability backpay. Of course, it’s possible you became disabled much sooner than that before you applied for SSDI. Regardless, you cannot receive additional payments for earlier months.
What Do AOD and EOD Stand for Again?
Since most people can prove their condition started long before they stopped working and applied for benefits, almost all claimants get five months’ backpay in a lump-sum check. This usually happens when people supply the SSA with documents showing their official diagnosis date.
The SSA automatically backdates your payment to the date you applied for benefits. That date is your AOD, or “alleged onset date.” However, if you can provide documents from healthcare providers that show your disability started before the day you filed your SSDI application, that earlier date becomes your EOD, or “established onset date.”
If you cannot provide documents proving you became disabled before the date you filed your SSDI claim paperwork, the SSA automatically converts your claim-filing date to your EOD. In those cases, if it hasn’t been five months since you applied, you’ll get no SSDI backpay. That’s very unlikely to happen.
Almost nobody gets diagnosed with cancer, for example, then quits their job, fills out the SSDI paperwork, and files their claim during the same week or even the same month. Instead, most people spend 1-3 months filling out the forms and pulling medical and banking records, IDs, and other information before filing their paperwork with the local SSA office. Furthermore, most people work part-time or take reduced hours or odd jobs after losing full-time employment due to repeat medical absences. The average wait time between when people lose their jobs for health reasons and finally apply for SSDI is 11 months.
There Is One Exception…
There is one special case where a person won’t qualify for disability backpay: Someone just diagnosed with ALS. The reason is they automatically qualify for SSDI within a 30-day period after filing their application. Since there’s no five-month waiting period for those applicants and the SSA expedites their claim reviews, they likely cannot receive any SSDI backpay.
Will I Get All My Disability Backpay Money at Once?
Yes. The amount will arrive as a lump-sum deposit for 12-17 months’ worth of SSDI payments all at once. If you file through an attorney, the SSA will deduct your legal fees from your total payment. After the SSA approves your claim, you’ll get something called an award letter in the mail.
This letter should state your monthly benefit amount, so multiply that amount x 12 to calculate your payment.
Ready to see if you may qualify? Complete your free online SSD benefits evaluation now!
Laura Schaefer is the author of The Teashop Girls, The Secret Ingredient, and Littler Women: A Modern Retelling. She is also an active co-author or ghostwriter of several nonfiction books on personal and business development. Laura currently lives in Windermere, Florida with her husband and daughter and works with clients all over the world. Visit her online at lauraschaeferwriter.com and linkedin.com.