Cha-ching! 'Retroactive Benefits' is a term that represents the monthly disability benefits you should have been receiving if you had been initially approved for disability. Unfortunately, as is often the case, most claimants wind up waiting 2 to 2.5 years before receiving a "Notice of Award" when their claim is finally approved by an Administrative Law Judge. The light at the end of the tunnel however is the large sum of money that magically gets deposited into your bank account usually within 1-2 weeks from receiving a Favorable Decision.
Note: SSDI applicants are entitled to collect on backpay up to 1-year from the time their application is filed. For SSI applicants, the date the application is filed is the first date of eligibility to receive monthly benefits.
How to Calculate Your Retroactive Benefits
First, you must know your "Onset Date" for disability. During the review process of a claim, this is called an "Alleged Onset Date", which is the date you are claiming you became totally disabled as of. If this date is accepted, it becomes your "Established Onset Date".
Next, add 5 months to your Established Onset Date to determine your "Date of Entitlement". By law, there is a 5 month waiting period before your first eligible month of disability benefits. Your Date of Entitlement is the legal start-date of your initial monthly disability payment.
Finally, add up the number of months between your Date of Entitlement to the date of Favorable Decision notice to calculate the total number of months. Then, multiply the total number of months by the amount of money you are entitled to monthly for disability according to your social security statement. This will give you an idea of how much you are entitled to receive in a lump sum once your disability claim is approved.
Note: If you hire a representative on contingency, Social Security will process the representative's fee automatically and pay the representative directly.