If you are approved for Social Security Disability Insurance or Supplemental Security Income benefits, you may be pleased to know that you may be entitled to back pay. This back pay or back award is made to compensate applicants for the period of time that it takes the Social Security Administration to process disability claims. In Social Security Disability Insurance (SSDI) cases, your finding of disability typically goes back to either your alleged onset date or one year prior to your filing date. However, there is a 5 month waiting period that is assessed on an SSDI case. This means that even if found disabled, for example, on 1/1/2019, since there is a 5 month waiting period, your back pay would begin on 6/1/2019. For Supplemental Security Income (SSI) benefit cases, your back pay will begin on your filing date. For example, let say you file your SSI application on 1/1/2019, and you are approved on 6/1/2019, your back pay would begin on 1/1/2019.
One important thing to note is that back pay is distributed either in one lump sum or in three installments spread out over six month intervals. Typically SSI cases are spread out in installments. After reviewing your claim, if the Social Security Administration notifies you that you are entitled back pay to be paid out in installments, there is a further restriction that you should know of. In some cases, your installments will not be in equal amounts. If the back pay that is owed is more than three times the monthly Supplemental Security Income benefit amount, prior to deductions for income or support, you will be paid in partial installments. The first two partial installments cannot equal more than three times your maximum monthly benefit. The third and final installment is usually whats remaining. But there is an exception for those in desperate need.
Exceptions to Social Security Installment Payment Plan
The amount of your first and second partial installment payments for back pay can be increased if you can show necessary medical needs or debts that relate to necessities, such as housing, food, or clothing.
You can also receive a lump sum payment if you can show that you are expected to die within 12 months.
Installment payments can be paid out in a lump sum payment if you become ineligible for SSI/Supplemental Security Income.