(DailyVibe.com) – If you’re applying for disability benefits, you understand that it can be a long time before you get approved. It’s tough to survive while you’re waiting for your benefits to be approved, and since most claims are denied one time or more, it can take a long time to get that approval. Fortunately, if you do get approved for Social Security Disability Insurance (SSDI), it is possible to get back pay to cover the full benefits you have been awarded.
Let’s take a look at how this works.
SSDI Back Pay: What Is It?
When you get approved for SSDI, there’s a five month waiting period. Additionally, there’s also the time between becoming disabled and applying for the benefit.
Unless you say otherwise, the Social Security office will assume the date of your application is the date you became disabled — even if your records show you were in the hospital or even incapacitated at the onset of your disability.
If you’re able to retain an attorney, it is possible to win back pay so you can receive benefits and back pay from the day you were disabled. There are limits to these retroactive benefits, but it is possible to get them.
You are eligible for back pay if your case has taken longer than five months.
How Do You Get SSDI Back Pay?
Most people receive their SSDI back pay in a lump sum. If you are also approved for SSI, you’ll get three installments in equal amounts, six months apart. However, if you really need the money for housing, food, or debt payoff, you can ask to receive the money sooner. If your life expectancy is under a year or if you aren’t disabled when you get back pay, you can also get one lump sum.
When Do You Receive SSDI Back Pay?
The time you receive your back pay is not predictable. Some people get the deposit in their bank account before they are even told their claim is approved. Or, they don’t have it until two months after they are notified.
If you retained a lawyer, their cut generally comes out of your back pay, as most social security lawyers do their work on contingency. Generally, social security lawyers get 25 percent of your back pay or $6,000 — whichever amount is less).
Usually your back pay gets deposited directly into your bank account. When you do your SSDI application, you will provide your bank account info so you can receive these deposits.
SSDI Back Pay and Taxes
If your overall income is high enough, your disability pack pay is taxable. The IRS lets you do a “lump-sum election,” though, which means you can refigure the back pay from a previous year into that year’s income. It’s a complicated formula and you should ask a tax professional for help.
If you get both SSI and SSDI, your SSI may be reduced to take the new SSDI income into account, including back pay.
Because of the waiting period, everyone who is approved for disability is eligible for SSDI back pay, less legal fees, within 60 days of your approval.
Living with a disability, multiple SSDI benefit denials, the cost of a lawyer (even though it’s a contingency payment), and the general gumption it takes to survive while in a holding pattern with SSDI benefits means you should ensure you fight to receive your SSDI back pay. For best results, retain a social security lawyer to make sure your case is dealt with as expediently as possible. You deserve this and paid into it during your working life.
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