People with disabilities have so many issues to deal with, especially when it comes to financial matters. Their handicaps might prevent them from having a regular job or a secure source of income. This is why they can get support from the Social Security Administration (SSA) through different assistance programs. These programs include the Social Security Disability Income (SSDI) program and the Supplemental Security Income (SSI) program. Although these programs support those who qualify with monthly payments, some of the beneficiaries might be due “past-due benefits” or back pay. This refers to the time period in which a person started dealing with their disability and became eligible to receive disability benefits, but their application was still pending.
The Main Sources of SSA Back Pay
It usually takes a while to review a disability claim. You might need to wait for a long time before starting to receive your disability benefits. Having an application initially refused and then appealing that decision adds even more time to the process. However, that doesn’t mean that your benefits for this period of time are gone. In fact, you can get them from the SSA through back pay. Unfortunately, not everyone is familiar with the concept of back pay. That’s why you need to learn more about it. In this article, we will show you:
- Where to Get Back Pay
- Explanatory Example of SSDI Back Pay
- How Does the SSDI Back Pay Process Work?
- How is SSI Back Pay Different From SSDI Back Pay?
Where to Get Back Pay
As we mentioned earlier, the SSA provides support through two popular programs, SSDI and SSI. Each has a unique way of helping eligible people with disabilities. They both give back pay benefits to those who qualify, but in different ways. This is why it’s important to understand how each program handles back pay.
Explanatory Example of SSDI Back Pay
In many cases, SSDI recipients start getting their benefits from the day their application is approved. However, you may be eligible to get back payments going all the way back to the time when you first submitted your application. Understanding how this works can be quite tough. For this reason, AARP has an example that explains this process in a simple way.
Assume that on November 23, 2021, doctors told you that you had severe respiratory disorders that prevented you from going back to work. This date is the “onset date” of your disability, as defined by the Social Security Administration. According to this diagnosis, you decided to apply for SSDI.
On December 1, 2021, you submitted an application for SSDI. However, your application was rejected for some reason. Then, you appealed the decision and got the right to have a hearing before an administrative law judge. If the court rules in your favor, it will consider November 2021 to be the beginning of your disability. Your chance to persuade the judge to rule in your favor depends on the evidence you provide at the hearing.
It normally takes five months for a person to start collecting SSDI benefits. Given that your onset date is November 2021, you should begin getting benefits in May 2022, the sixth month after your onset date. Nevertheless, taking the appeals process into account, it might be much longer! Assume you have had your disability for 15 months, from November 2021 to March 2023. Unfortunately, you have not received any money during this time. In this situation, SSDI’s back pay will cover ten months of past-due benefits (from May 2022 to March 2023).
How Does the SSDI Back Pay Process Work?
In general, the Social Security Administration determines your SSDI benefit according to your previous income and employment history. In most situations, the SSA will make a single lump-sum payment to cover any past payments that have racked up within 60 days of an approved SSDI claim.
It’s important to note that the fee arrangement with your legal representatives, such as a lawyer or advocate, must first be approved by the SSA. Typically, people hire these experts during the appeals process. Yet, this fee is limited to the lesser of $6,000 or 25% of the back pay amount. If you get a lawyer during the disability appeals process, the SSA will deduct the cost of their services from any back pay benefits you receive. Assume you receive a $1,000 monthly benefit from the Social Security Administration. Considering the same example as before, you would have to pay your attorney around $2,500 of the $10,000 in back pay.
How is SSI Back Pay Different From SSDI Back Pay?
Since SSDI and SSI are two different programs, it should be understood that they handle back pay differently. Unlike SSDI, which requires a five-month waiting period, SSI back benefits are available instantly. To be more specific, here is an example of how SSI handles back pays:
Keep in mind you won’t get a lump sum payment if the total of your past-due benefits is higher than the maximum SSI benefit. Instead, you will get your money in three equal payments over the course of six months. The SSA sets the maximum monthly SSI benefit for eligible people at $914 in 2023. There is no maximum limit on back pay for either SSDI or SSI, which is amazing!
In a Nutshell
If you are receiving SSI or SSDI benefits, you might be able to claim back pay benefits. This money is rightfully yours; you only need to understand how to get it. It’s important to keep in mind that there are differences in how SSI and SSDI handle back pay. However, they both have no limit on how much you can get. If you need more information about this opportunity, you can get in touch with the SSA. They can help you figure out whether or not you are due any back pay and what to do next. Also, you can consult a lawyer if you need more help with the whole process.