If your disability claim takes months (or years) to be approved, you may be owed back pay for the time you waited. Here's how it works for both SSI and SSDI.
In this article, we'll cover:
- What back pay is
- How SSI back pay works
- How SSDI back pay works
- How back pay is paid out
- What to do with your back pay
1. What Back Pay Is
Back pay is the benefits you would have received if your claim had been approved immediately.
Why it exists:
- Disability applications take time (often 6+ months)
- You were entitled to benefits during that time
- SSA pays you what you should have received
Two types:
- Retroactive benefits: For months before you applied
- Past-due benefits: For months after you applied but before approval
2. How SSI Back Pay Works
SSI back pay starts from the date of your application (or later onset date):
When it starts:
- The first full month after your application
- Or your onset date, whichever is later
- No retroactive benefits before application
How it's paid: For large back pay amounts (more than 3x your monthly benefit), SSI pays in installments:
- First installment: Up to 3x your monthly benefit
- Second installment: Same amount, 6 months later
- Third installment: Remaining balance, 6 months after that
Example:
- Monthly SSI: $943
- Back pay owed: $10,000
- First payment: $2,829 (3x monthly)
- Second payment (6 months later): $2,829
- Third payment (12 months later): $4,342
Important: Large SSI back pay must go into a dedicated account for child recipients.
3. How SSDI Back Pay Works
SSDI has different rules and can include retroactive benefits:
When it starts:
- Up to 12 months before your application date
- Plus the 5-month waiting period
- Then ongoing until approval
No installment requirement:
- SSDI back pay is typically paid in one lump sum
- No waiting period between payments
The 5-month waiting period:
- SSDI doesn't pay for the first 5 months of disability
- Back pay starts with month 6
Example:
- You became disabled January 2025
- Applied June 2025
- Approved March 2026
- Back pay covers: June 2025 (month 6) through February 2026
4. How Back Pay Is Paid Out
Direct deposit:
- Back pay goes to your bank account
- Same account as regular benefits
Timing:
- Usually within 60 days of approval
- SSI installments have 6-month gaps
- SSDI typically arrives as one payment
Taxes:
- SSI is never taxable
- SSDI may be taxable depending on total income
Attorney fees:
- If you had a lawyer, their fee comes out first
- Limited to 25% of back pay or $7,200 (whichever is less)
5. What to Do with Your Back Pay
For SSI recipients: Back pay in a dedicated account (for children) can only be used for:
- Disability-related medical treatment
- Education or job training
- Special equipment
- Housing modifications
- Other disability-related expenses
For regular SSI back pay:
- Spend it within the month to stay under $2,000
- Or deposit into an ABLE account
- Don't let it sit and accumulate
For SSDI recipients:
- No spending restrictions
- Use it however you need
- Consider saving some in an ABLE account if also on SSI
Smart uses for back pay:
- Pay off debt
- Cover medical expenses
- Make necessary purchases
- Fund an ABLE account
- Create a small emergency fund
Important: If you're on SSI, a large back pay deposit can put you over the $2,000 limit. Have a plan to spend it down or move it to ABLE before the first of the month.
How Purple Helps
- Track your deposits including back pay
- Balance alerts for SSI limits
- ABLE account integration
- Plan your spending