If you have a disability that keeps you from working, you may be entitled to Social Security Disability Insurance (SSDI) benefits. SSDI is a monthly benefit paid to eligible adults with disabilities that prevent them from working. You can apply for benefits either online or in person at your local Social Security office.
Another benefit offered by Social Security is Supplemental Security Income (SSI). These are two different benefits with unique eligibility requirements and application processes.
10 Common Questions About Disability Back Pay
The SSDI application process can take a long time because the Social Security Administration (SSA) has many applications to process. As a result, you will have to wait a while to begin receiving benefits while not working. If your claim is approved, you’ll be entitled to the monthly payments you would have received between filing the application and receiving a decision. This one-time lump sum payment is called back pay.
Am I entitled to SSDI back pay?
To qualify for SSDI, you need to be unable to work due to a medical condition recognized by the SSA as a disability. Your condition needs to be a long-term disability expected to last for a year or result in death. Also, you need to have worked long enough and recently enough to have enough work credits to qualify. The SSA calculates work credits using age, current year, and working days within the year.
If your disability claim is approved, you will receive SSDI back pay for the time between submitting your SSDI application and the decision date of your claim, minus the five-month waiting period.
How does SSDI back pay work?
The application process for SSDI can be lengthy. After submitting your application, you could be waiting months for a disability determination on your claim. Since you are not working, this waiting time is likely causing financial hardship.
When you apply for SSDI benefits, you must declare a disability onset date, or the date you became unable to work due to your permanent disability. If the Social Security Administration agrees with this onset date, you will be entitled to disability benefits back to that onset date. Since many months have likely passed since that date, you might receive past due payments for those months.
The amount of back pay will be equal to your monthly payments (noted in your approval notification letter) multiplied by the months of back pay eligibility. There is a five-month waiting period on disability benefits, so your entitlement begins on the sixth month. For example, if it’s been nine months since you’ve applied for disability and you just received your approval, you’re entitled to nice months of back pay minus the five-month waiting period. The payment will be for four months of back pay.
The only exception to the five-month waiting period is for applicants who have ALS.
What’s the difference between back pay and retroactive benefits?
It is easy to confuse back pay with retroactive benefits, but they are two separate items. Back pay is for past-due benefits that cover the period between submitting your application for disability benefits and the date the SSA decides on your claim. It pays you the amount you would have received if you had been getting your disability benefits over the time that you were unable to work.
Retroactive pay refers to the time difference between the onset of your disability and when you actually applied for benefits. Let’s say you stopped working due to your disability and then waited 10 months to apply for SSDI. Would you be entitled to benefits for those 10 months? If the SSA agrees with the date you stopped working and your application for SSDI is approved, you can be paid for those 10 months through retroactive payments.
The maximum amount of retroactive pay you can receive is 12 months. If you are entitled to both back pay and retroactive pay, you’ll receive them together in one lump sum payment.
How much back pay will I get?
Your amount of back pay depends on your monthly payment and the number of months you are owed back pay. The SSA compensates you for the period between your SSDI application and approval dates. Your back pay will be the dollar amount of your monthly payment times the number of months you waited for benefits, minus the five-month waiting period.
For example, if you’ve been waiting nine months for benefits, you will be entitled to four months of back pay. Supposing you were awarded a monthly benefit of $1,000 per month, you will receive $4,000 in one lump sum.
You may also be entitled to retroactive payments, different from back pay. They are granted for the time between the date of disability onset and applying for benefits. Retroactive payments are calculated separately.
How do I track my SSDI back pay?
The process can take a long time, and you are understandably eager to receive your disability benefits and back pay. If you want to track the progress of your SSDI back pay, there are a few ways that you can do that:
- Call the SSA’s toll-free hotline at 1-800-772-1213 to get information on your claim, such as decision and payment status.
- Review your approval paperwork to find information on future payments and back pay
- Visit the SSA’s website to find updated status information for your file
- Contact your local SSA office and ask for an update on your back pay
- If a disability lawyer or other representative helped you with your claim, contact them to obtain an update for you
Most claimants receive back pay within 1-2 months of getting their approval notification. If it has been longer than two months and you still have not received your back pay, you may want to try one of the above methods to track it.
How is back pay deposited?
Federal law mandates that Social Security disability benefits, including SSDI, be paid through direct deposit. When you apply for SSDI benefits, you must elect to receive payments electronically. Therefore, you will need to have an established bank account with your routing number and account number to sign up for direct deposit. If your Social Security disability claim is approved, your monthly payment and any potential back pay or retroactive pay will be sent to you through direct deposit.
If a representative payee helps you manage your Social Security benefits, back pay will go directly to them through direct deposit. Although the funds go directly to them, the money received from SSDI needs to be used on you, the disability benefit recipient.
How do I get back pay through my Representative Payee?
If you cannot perform tasks such as filing your claim and managing funds, you can appoint a representative payee to handle those tasks for you through the SSA. A representative payee can be a family member, a friend, or a professional caretaker.
Social security benefits are paid directly to the representative payee, but the funds must be used on the claimant. Monthly disability payments should be used for groceries, living expenses, and bills. The SSA requires representative payees to submit a report each year that details how funds were used and how much money remains saved in a bank account for the claimant. Receipts should be kept along with this annual report.
How long does it take to receive SSDI back pay?
The application process for SSDI benefits can take a long time. Thankfully, receiving your SSDI back pay should not take as long as it takes to hear a decision on your SSDI claim. You can expect to have your back pay deposited within 1-2 months from receiving notification that your disability claim was approved.
You will receive back pay in one lump sum payment. If you have been waiting longer than two months for your back pay, you can contact your local Social Security office for a status update. You can also view updates to your claim online.
Do I have to pay taxes on SSDI back pay?
You may have to pay taxes on your SSDI back pay, depending on your income level. Those who have a total annual income that exceeds the established threshold will have a portion of Social Security benefits taxed. Just how much depends on varying levels of income. To check the latest income limits and determine how much of your back pay may be taxed, you can visit the SSA’s online tool.
Large lump sum payments may bump recipients into a higher tax bracket. If back pay spans two tax years, you can apply the amounts earned in each year separately instead of claiming one lump sum in one tax year.
Do I need to hire a disability lawyer to get SSDI back pay?
You don’t need to hire a disability lawyer to file a claim for disability benefits, but it may increase your chances of getting the claim approved. A disability lawyer will help you gather the evidence required for the claim and file the SSDI application. If your initial claim is denied, it is beneficial to have a disability lawyer help you through the appeals process. And they can monitor the status of any back pay or retroactive payments.
Most disability lawyers offer a free consultation and charge nothing upfront. Instead, they receive payment as a percentage of your back pay. There are laws in place to protect Social Security disability claimants from being overcharged for disability law services. According to law, a disability lawyer can charge a claimant no more than $6,000.
SSDI Back Pay
Social Security Disability Insurance (SSDI) benefits are available for disabled adults who can no longer work due to a long term disability. Those who have earned enough work credits through employment can apply for SSDI. Applications can be submitted online or in person at a local Social Security office.
In addition to SSDI back pay, you may be entitled to retroactive payments if you waited to submit your claim after the time your disability prevented you from working. The SSA also offers Supplemental Security Income (SSI), a separate benefit that should not be confused with SSDI.
The SSDI application process can take a long time because of the SSA’s large volume of disability claims. The waiting period can result in financial distress since applicants have had a loss in income and disability benefits have not begun.
If the claim is approved, the SSA will pay back pay for the time the applicant was waiting. These past-due benefits are paid for the months between applying for disability and receiving approval for the claim. There is a mandatory waiting period of five months for disability benefits, so back pay entitlements begin on the sixth month. Payments are made by direct deposit only and will go to you directly or someone else you have designated, such as a representative payee or a disability lawyer helping you with your claim.