Even though government programs might be effective and offer adequate support, some people may find them hard to understand. It may be more complicated to properly understand the several perks you can eventually get. The government provides two helpful programs to assist people in need: Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI). These two are easy to mix up, which is why we wrote this article. We will help you understand how they work and what they can offer you.

What to Know About SSDI and SSI

Let’s have a quick look over SSDI and SSI. First, SSDI is a program that only helps people with disabilities who have a qualified work history. SSI, on the other hand, is a program that provides support to those who fulfill the income requirements and have a specific kind of disability or are a specific age. The difference between the two programs is clear: SSDI concentrates on disability and job history, while SSI is more about financial position and age (or disability).

What is the Difference Between Retroactive Pay and Back Pay?

“Retroactive pay” and “back pay” are two common terms related to SSDI and SSI. You might come across them frequently when learning about these two programs. As a result, it is important that you understand their meaning and the difference between them.

Retroactive Pay

Retroactive pay refers to the assistance that the Social Security Administration (SSA) will provide for any eligible timespan during which the beneficiary was dealing with a disability before submitting an SSDI application. Some SSDI applicants may occasionally choose to postpone filing their applications. There are many reasons why someone would wait before applying, but it’s important to keep in mind that to be eligible, a disability must be anticipated to continue for at least 12 months. For this reason, some applicants prefer to wait until their disability has affected them for 12 months or until they expect it to continue for 12 months.

If it is determined that an applicant would have been eligible before filing their application, they may be entitled to retroactive benefits. A person’s retroactive benefits amount depends on three factors:

• The Date of Application
• Disability Onset Date
• Waiting Period of Five Months

The Date of Application

The application date is essential because the amount of benefits is supposed to compensate beneficiaries for the time they were eligible for SSDI benefits before applying. You can find the date of your application by checking your application history.

Disability Onset Date

According to the SSA’s definition of a disability, your disability onset date is the time at which you first had your disability. This day will either be the day you claimed to have a disability or the day the Social Security Administration found you to be disabled. This may not necessarily be the same day because you will need to provide your Alleged Onset Date (AOD) when applying for SSDI. According to this date, the SSA will determine how long you have been disabled.

If the SSA agrees with your AOD after verifying the paperwork you provided, it will become your Established Onset Date (EOD). But, if the SSA finds that your evidence is not showing an accurate AOD, they will determine your EOD themselves. In any case, the EOD will be crucial regarding retroactive pay.

Waiting Period of Five Months

Last but not least, your retroactive pay will be determined after deducting the five-month waiting period. This is because recipients have to wait for a total of five months before becoming eligible for compensation after the disability onset date has become an EOD. This five-month waiting period applies to all SSDI beneficiaries. Assume that March 1, is the date of your EOD. You wouldn’t be eligible for benefits for another five months from that date.

How Much Can I Get from Retroactive Benefits?

Retroactive benefits have a 12-month time limit that the SSA set. Accordingly, you cannot count on the SSA covering the entire period during which you were waiting to apply for SSDI. Let’s say, for example, that three years after having your disability, you applied for SSDI assistance. They won’t be able to make payments for this full period. If you wanted to get the most benefits possible, you would have needed to apply at least 17 months after you had your disability. This is because the SSA would deduct the five-month waiting period before paying for the entire 12 months. Any additional time over the 12-month maximum (plus the five-month waiting period, for a total of 17 months) would not be paid.

Back Pay

Processing an SSDI application might take a while (usually three to six months). As a result, many applicants might be owed back pay by the time their application is approved. Simply put, back pay is the amount of SSDI support that a beneficiary is entitled to from the time they apply until the month they are accepted for those payments. How much back pay they will receive will depend on the following three factors:

• The Date of Application
• Disability Onset Date
• Waiting Period of Five Months

The Date of Application

The application date is a simple but critical factor. It is when you submitted your SSDI application. Since your back pay considers paying you from the date of your application until you get approved for benefits, the application date will be important when calculating your back pay.

Disability Onset Date

As we mentioned before, this refers to the date when you had your disability. It can be the day you claimed to have a disability or the day the SSA found out about your disability. The SSA will make its decision after reviewing the evidence you provide with your AOD. If they find that the information you provided is correct, your AOD will become your EOD. If they find that your evidence shows inaccurate information, they will choose your EOD. Either way, your EOD is an important factor for back pay.

Waiting Period of Five Months

The five-month period is another factor the SSA takes into account when determining your back pay. Once the disability onset date has officially become an EOD, recipients must wait a total of five months to be eligible for compensation. Every person receiving SSDI benefits is subject to this five-month waiting period. For instance, if your EOD was on April 1st, that means you would not be eligible to get benefits for another five months.

How Much Back Pay Is Available for a Person?

Here is the good news: there is no maximum for back pay. When it’s time for you to get your back pay, you will receive it all at once. Keep in mind that recipients typically have to wait for one to two months to receive their back pay.

Back Pay and Retroactive Pay for SSI

The information we provided above talks about SSDI retroactive and back pay. However, things are a little different for SSI as it does not offer retroactive pay. That’s because eligible people can only get benefits depending on the initial date of their application.

On the other hand, SSI does offer back pay. It takes the date of application into account for this reason. The back pay calculation will be different from SSDI because there is no waiting period. Furthermore, if the amount of back pay exceeds the maximum monthly benefit of $943 (for 2024), beneficiaries will not get the back pay in a lump sum. Instead, they would receive it in three equal payments throughout six-month intervals.

Conclusion

SSDI and SSI are two different types of supportive programs for people in need that can help in many ways. Both retroactive pay and back pay are available through SSDI. SSI, however, only provides back pay. Retroactive pay is about providing benefits when you have a disability even before you apply for disability benefits. Back pay, on the other hand, covers the period between the date of your application and the day you started receiving benefits. Application date, disability onset date, and the five-month waiting period are three essential elements that determine eligibility for both benefits. Make sure to keep them in mind!