Social Security and Retroactive Back Pay: What You Need to Know

( – The federal government in the United States offers so many different programs for aid, sometimes it’s hard to keep track of them all. Once you qualify for a set of them, it can set you up to qualify for more — and that’s wonderful, as you’re getting the support you really need — but it can be confusing to keep track of so many different programs, especially if you’re in the midst of repairing or building your credit anew.

There are two basic programs you should be familiar with if you’re thinking about qualifying for aid from the federal government: Supplemental Security Income (SSI) and Supplemental Security Disability Income (SSDI).

Supplemental Security Income: What Is It?

SSI goes to people who meet a specific set of criteria. Generally, SSI goes to children with blindness or disability, or to adults with limited income and resources who also meet standards for blindness, disability, or advanced age (over 65).

What About Supplemental Security Disability Income (SSDI)?

If you’ve worked for most of your life, you’ve paid into a tax which is what funds SSDI. When you’ve worked enough hours in your life and you’ve paid into this tax, you and some of your family members may be eligible to collect SSDI at some point.

While SSI benefits are qualified around age or disability status, SSDI is more about how many work credits you’ve owned and disability status.

Neither SSI nor SSDI are the same as “Social Security Tax,” which is what you get when you are old enough to retire. (This is another tax you pay into during your working years.)

Filling A Gap

Now that you understand SSI and SSDI, what about the time between the onset of your disability and the time you’re able to apply for benefits? If you’re stuck in a hospital or are undergoing diagnosis, it’s not always easy to apply right away. What about the several month long wait period after you’ve applied but before your benefits actually kick in?

Fortunately, the Social Security Administration, or SSA, covers your wait time. They pay this out in retroactive pay, back pay, or both.

What Is Back Pay?

Back Pay covers the time between your application and approval of both SSI and SSDI benefits. The SSA formally refers to these as “past-due benefits.” This covers the time when you were eligible to receive payments, but you hadn’t yet been approved for them. Unfortunately, most people get a denial the first time they try to claim benefits, and if you have to go through the denial and appeal process, your past-due benefits will cover this time period as well. For some people, this can amount to years.

Your SSDI benefit backpay is based on the date of your disability’s onset, not the date you applied. For SSI, your payments are based upon the date you applied, regardless of when your disability’s onset occurred. SSI does not have a waiting period, unlike SSDI.

SSDI, however, requires a five month waiting period before filing a claim. SSDI doesn’t cover those first five months following your disability. There is an exception: if you have ALS, your waiting period is waived, and you get benefits immediately.

If you’re applying for SSI and SSDI benefits, the waiting period is rough. This is why many social security lawyers work on contingencies, meaning they only get paid when you receive your backpay and payouts. However, you should have a plan for living with a relative or otherwise supporting yourself for months while you are waiting on decisions and backpay.

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