Luisa was relieved to learn her application for disability benefits had finally been approved. Because she was unable to work, she looked forward to receiving monthly payments that would help support. Then she learned that she might be receiving retroactive benefits and back payments. To Luisa, they sounded like the same thing – payments for past months she couldn’t work. However, there are some key differences between retroactive benefits and back payments. We will look at those differences in this article.
Let’s look at the similarities between retroactive benefits and back payments.
Both retroactive benefits and back payments are paid to people who receive Social Security Disability Insurance (SSDI) benefits.
SSDI, which is managed by the Social Security Administration (“Social Security), is a benefit paid to people who are not able to work because of a disability.
Timeline of an SSDI Claim
There’s no one set timeline for an SSDI claim, so we will have to give ranges or estimates.
- After Social Security receives an application for benefits, it may take them up to six months to approve or deny benefits.
- If denied, the applicant may appeal Social Security’s decision, which, of course, extends the time between the application date and the date benefits may start. Of course, they would only receive benefits if their appeal is granted.
- After benefits are approved, monthly payments start. However, SSDI benefits are not paid for the first five months after your disability onset date (the “waiting period”).
Retroactive benefits and back payments are calculated based on the timeline of your disability and application for benefits.
One payment is considered a ‘past’ benefit
Retroactive payments represent the months you were disabled, but before you applied for disability benefits.
Back payments are a ‘past benefit’ because they are paid from the date you applied in the past to the date you were approved. In other words, back pay is the amount you would have received if Social Security had approved your application immediately.
Example: Annie stopped working in January of 2019 but did not apply for SSDI benefits until August 9, 2019. Social Security finally approved her application in May of 2020. Annie may receive retroactive payments for January through August 2019 and back payments from August 2019 through May 2020, minus any waiting period.
Learn More About Retroactive Benefits and Back Payments
The application process can be long and frustrating, so you need someone on your side. The attorneys at The Law Offices of Martin Taller have more than 50 years’ experience. For a free consultation, call us at 714-385-8100. From our office located in Anaheim, we assist clients throughout Southern California.