Hoping For SSDI Back Pay? What You Need To know
(AscendHealthy.com) – Getting Social Security benefits can be problematic. If you or a loved one are worried about receiving disability benefits, you may already know that it can take months or even years for your application to be approved. In addition, there are several other requirements that you must meet in order to receive benefits. The unfortunate truth is that many people will have difficulty when trying to get Social Security Disability Insurance (SSDI) benefits. Most applications are rejected at least once, if not more. However, beneficiaries can receive back payments from the SSA pending approval. This is considered SSDI back pay.
What is SSDI Back Pay?
An SSDI back pay refund is a lump sum payment you will receive for the benefits you should have collected between the end of the five-month waiting period and the time you were approved. In most cases, Social Security considers the date you applied for benefits as the date you became disabled.
However, you can also receive benefits for the period between when your disability starts and when you file a claim. If you became disabled prior to applying you must prove the disability before the application date. For example, you can set the start date as the job’s end date. Sometimes they can try to argue this. In these cases, it is best to consult a lawyer. The limit for retroactive benefits received for the period before your application is twelve months.
Is Disability Back Pay Taxable?
It depends. If your income is too high, you will have to pay taxes on the refund. However, the IRS allows you to use a “lump sum election,” which means you can count your back pay income from a previous year in the following year. This process is complicated, and you may need a computer or a good tax professional to do it right, but it’s worth it.
If you get both SSDI and SSI, your SSI will be reduced to reflect your SSDI income.
How Is Back Pay Paid?
It can be challenging to determine when you will receive payment, especially when you receive a written approval notice. In many cases, a check has been known to reach your bank account before you receive a notification that one’s application has been approved. It may take some time, but you should receive it within sixty days of approval. If you hired an attorney to help you file your disability claim, the related fees will be deducted from your back pay.
The SSDI back pay payment is paid in one payment. If you have also been approved for SSI, you will instead receive the money in three equal installments, six months apart. You can also apply for more money for needs such as food and housing. You will receive a lump sum payment if you are no longer disabled when approved or your life expectancy is less than twelve months.
Your payment will typically be sent to your bank account. When applying for disability, you also agree to a sufficient savings arrangement before receiving your benefits. SSDI also applies interest to your back pay. This does not apply to SSI back pay if you receive both.
Who is Eligible for SSDI Back Pay?
A person approved for a disability lasting more than five months is eligible for reimbursement. There are no specific requirements other than that.
SSDI payments are awarded to those with disabilities that take more than five months to determine. It is designed to cover the time between the end of the five-month waiting period and approval as well as any time between initiation and submission of the application. Everyone approved for disability is eligible for reimbursement, which you should receive within sixty days of approval. If you hired an attorney to assist you, their fees will likely be deducted from your back pay.
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