Anyone familiar with the Social Security disability system is aware of the long delays that can occur between an initial application for benefits and an eventual approval. For the minority of applicants approved at the initial level, a wait of three to six months is common. Those who appeal and have to proceed to the reconsideration level or to a hearing in front of an Administrative Law Judge can expect to wait a year or more before receiving benefits. And if a case is appealed to the Appeals Council or lands in federal court, a successful disability applicant will usually have waited several years before receiving a payment. Because the Social Security Administration (SSA) has a massive backlog of cases at every level of the disability application process, the unavoidable result is a lengthy delay in processing claims.
The silver lining is that once you are approved, SSA will pay past-due benefits dating back to the first full month after you applied, and sometimes earlier. The amount you will receive in back benefits depends on a number of factors, including the date you filed your application, your alleged onset date (AOD), and whether you have filed for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). Back benefits are paid as either one lump sum (in the case of SSDI) or several smaller installments (in SSI cases).
Back Benefits in SSDI Cases
You will receive back benefits at least going back to the date you applied for disability benefits. There is no limit on the amount of back benefits you can receive.
But in order to calculate the full amount of backpay you'll receive in an SSDI case, SSA will look at your disability onset date (EOD), the day you became unable to work. If your EOD is before the date you filed your SSDI application, you may receive a maximum of twelve months of "retroactive" benefits -- payment for benefits during the twelve months before you applied. In order to receive all twelve months, however, you must actually be found disabled seventeen full months before your filing date. This is because SSDI has a five-month waiting period, meaning that SSA does not pay you for five full months after your EOD.
An example may help clarify the rules on SSDI past-due benefits:
Those who win an award for SSDI backpay are always paid in one lump sum. Note, however, that attorneys' fees are deducted by Social Security before the lump sum amount is paid to the claimant.
Backpay in SSI Cases
In SSI cases, Social Security will award backpay starting from the first full month after you filed for benefits (or the month following your protective filing date). Unlike in SSDI cases, there is no five-month waiting period, and retroactive benefits (payments for any months before you applied for disability) are not available.
SSI backpay, assuming it is more than a few thousand dollars, is paid in three separate installments, six months apart. Usually, your first two payments will each not exceed three times your monthly SSI benefit ($710 in 2013, plus any state supplements.) An exception to this limit exists where an SSI recipient has debts related to necessary medical, food, clothing, or housing expenses. In this instance, the SSI recipient should inform SSA about these debts and ask for an exemption from the payment limits. The rest of the backpay will be received in the third installment; there is no limit on the amount of the third installment.
There are a couple of circumstances where an SSI recipient will receive one lump sum of back benefits. In cases where an individual is expected to die within twelve months of approval, or if a person is no longer eligible for SSI after being approved, all the back benefits will be paid at once.
In concurrent claims -- that is, where an individual has filed and been approved for both SSDI and SSI -- it is possible that a person may qualify for back benefits from both programs in the same month. However, Social Security will offset the amounts so that you will not receive the full payments of both SSDI and SSI in the same month. SSA issues two separate award notices, one for SSI and one for SSDI, when a concurrent claim has been approved.
Timing of Lump Sum Payments of Backpay
It can take a couple months for Social Security to issue backpay, especially for concurrent claims and in other special situations. Although delays in payment can be frustrating, disability recipients should try to be patient with the SSA offices that are processing payments. However, if you haven't received any backpay after three or four months, contact Social Security to make sure your payment is being processed.