How Back Pay Fills In The Social Security Benefit Gap
After a worker becomes too ill or disabled to work at their job, they may decide to apply for Social Security Disability Insurance (SSDI) benefits. Unfortunately, the financial help these workers so desperately need may not be as timely as they wish. Read to find out more about back pay — a means of catching ill or disabled workers up on their benefits.
Back Pay: It's All About the Timing
Back pay begins on what the Social Security Administration (SSA) refers to as the date of last insurance (DLI) or the final paycheck from a job. Many workers have noticed a deduction on their pay stubs or statements called FICA. That deduction, or at least part of it, goes toward their Social Security retirement. If they become disabled before they can retire, the money to pay their SSDI benefits comes from that fund. The DLI is also the start date for your back pay. It can take several months to be approved for benefits once you apply, so back pay accrues during this time.
Deducting Five Months
Unfortunately, SSDI applicants are not paid back pay until they are approved for benefits. When they are approved, back pay is paid to claimants in a single lump-sum payment that is separate from their other regular monthly benefits. However, the SSA dictates that five months be removed from the back pay accrual. This is known as the five-month waiting period by the SSA. That means if you have to wait 10 months to get approved for benefits, you only get paid for five months of that time due to the back pay five-month waiting period.
Using Back Pay Wisely
Back pay offers a valuable benefit, however, even before you receive it. You can actually use back pay that has not even been awarded yet to pay your Social Security lawyer. The SSA works hand in hand with Social Security lawyers to help applicants with their applications and to support them at any appeal hearings. Once you speak to an approved Social Security lawyer and they review your case, you can be represented by that lawyer for a small percentage of your lump-sum back pay. The SSA has strict limits on how much you must pay the lawyer and you will know exactly what to expect in terms of payment once your back pay is awarded. Make no mistake about it — applicants that appear at an appeal hearing with a Social Security lawyer are three times more likely to be approved for benefits than those who appear representing themselves.
To find out more, speak to a Social Security Disability attorney right away about your case.