Life can be rough for all involved, we as humans have several different life experiences and situations we come across that can change our daily lives. Those dealing with a disability or struggle with income might find themselves in an even tougher spot, especially if they don’t have help. Good news is that there is usually always someone somewhere willing to assist. The Social Security Administration (SSA) is responsible for distributing past-due benefits or more widely known as back pay.

Qualifying and receiving these benefits may differ between programs. Throughout this article we will discuss and go over just how beneficial these programs may be and the time it takes to receive them. Although the SSA offers many programs, this article will focus on two: the Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). However, it’s important to understand how these programs will affect your life, so let’s first review taxes.

Can Your Taxes Be Affected By Your Back Pay?

Quite a few recipients of these types of benefits are not aware or don’t take note of their limits while receiving these funds. That is where the IRS comes into play. Their main goal is to help those whose income exceeds a specific limit. The IRS offers an opportunity to reduce the chance of surpassing that cap by lump-sum elections. This process allows people to refigure last year’s back pay to roll into this year’s income. So yes, as surprising as that sounds, Social Security benefits in part are taxable, so keep an eye on your income level while receiving these benefits.

SSI Back Pay 

As stated above, while both SSI and SSDI are part of SSA they differ in a couple ways. For SSI you can start counting your back pay from the date of your application until the day you get them. Furthermore, you should keep in mind that the total amount of your past-due benefits could be more than the SSI’s maximum monthly benefit amount of $941 in 2023. If this happens to be your case then you can expect your money back in three installments over a six-month period. One of the best things about this program is that for past-due benefits there is no maximum amount. Those that get benefits from the SSI program are low-income individuals that meet conditions to qualify. How can you get these benefits? If you get a set disability date and apply for benefits that receive approval, then you can get benefits for the months between applying and receiving approval.

For example, you apply in December 2022, and you get your benefits in April 2023. You can get the amount of back pay from December 2022 until April 2023. That would be four months worth of benefits! Now, let’s say that your benefits are $800 per month. If you get $800 per month, then you will need $3,200 worth of back pay. As we mentioned before, you will get these benefits in three installments over a six-month period, since the total amount is more than the maximum!

Making Sense of Back Pay From SSDI

For the SSDI program the SSA evaluates how much your benefits will be, depending on your earnings background. After applying and being accepted there is also a waiting period of five months that you need to go through before getting your SSDI benefits. To give you a better understanding, an example will be provided below, detailing how this works.

Let us say that the SSA decided that your monthly benefits would be $1,000. You will need to wait five months between the day you were medically eligible and the date you get benefits. This means that after the waiting period passes, you can begin getting SSDI benefits. In other words, you will receive SSDI benefits on the 6th full month that takes place after the onset date.

The SSA’s Process With Managing SSDI Back Pay

Let’s talk about how the SSA manages your SSDI back pay. Once the SSA accepts your disability claim, it’s time to get your SSDI back pay! How do you get it? The SSA pays SSDI past-due benefits in lump sum within typically two months (60 days). Now, you may have had to appeal your application’s decision. During that time, you might have needed a lawyer to deal with your disability case. The lawyer needs money to represent you, of course. This is where the SSA comes in. The SSA will pay for legal representation fees that come out of your back pay, but you and the SSA need to agree on the fees first. However, it is a bit more complicated than that. The SSA typically limits this fee to whichever is less: 25% of your back pay or $6,000.

In Conclusion

This is what back pay is and how it works. If you are eligible and apply for benefits it might be awhile before you receive them resulting in back pay. It also important to remember the two programs from the SSA that offer these past-due benefits, which are:

• The Social Supplemental Income Program (SSI)
• The Social Security Disability Program (SSDI)

There is one main difference that comes with these programs with regards to back pay. The difference is that the SSI program does not have a waiting period. However, the SSDI has a waiting period of five months. Regardless, the best thing about these programs is that there are no maximum amounts when it comes to these benefits! That means that you will not need to worry about not getting the benefits you deserve! Now that you have a clear idea of what back pay or past-due benefits are, you will be able to understand how the process works. It is up to you to look into these programs and figure out how much you should get from them. If you want more information or have questions you should reach out to the Social Security Administration (SSA). They are the ones that offer these programs so they are a great resource!