What are Past Due Benefits (Back Pay) as it relates to SSDI?
Social Security Disability past due benefits, sometimes referred to as back pay, is money that is owed to you by the Social Security Administration for the months that you were eligible for benefits before SSA awarded the claim. Applying for Social Security disability benefits can be a lengthy process, therefore there are usually past due benefits once an application is approved. While it differs from case to case, if you’re approved for disability, you will generally receive your past due benefits within 60-90 days . The way you receive the payment can also vary; it may be awarded as a lump sum or in a number of installments. Receiving SSI benefits, in addition to SSDI, is one factor which will affect how your past due benefits are received.
An important thing to be aware of is the fact that disability back pay can increase the taxable amount of income for that year. If it increases past a certain threshold, you will be required to pay taxes on your benefits. It’s possible to reduce the amount you owe by allocating a portion of the back pay to the year it should have been received.
In addition to receiving back pay you may also be entitled to retroactive benefits, which would provide you with benefits for a period of time before you applied for disability. For more information and guidance about disability back pay, contact us.