What’s the Difference Between Retroactive Pay & Backpay?

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If approved for disability benefits, you may also wonder about retroactive pay or overdue back payments. After all, if you’re now too disabled to work, your condition likely didn’t develop overnight. Your disability may go back months or even years before filing your application with the Social Security Administration (SSA). But the laws that determine how you’ll get your Social Security disability payments are often confusing. And if you do qualify for SSD benefits, it doesn’t mean you’re owed any retroactive pay or back payments. Here’s everything you need to know once your claim’s approved.

Are Retroactive Pay and Past-Due Back Payments The Same Thing?

No, retroactive pay isn’t the same thing as past-due back payments. First, let’s define what backpay is and how much you can get if your claim’s approved. It may take several months for the SSA to review and approve your application. In fact, the SSA has a mandatory five-month wait time for everyone who files a claim. The agency also knows five months with no income is hard on most people.

So to help make up for that, the SSA gives you a lump-sum back payment once your claim’s approved. It covers any past-due checks the SSA owes for the months you waited after filing your application. The SSA deposits any past-due backpay you’re owed directly into your bank account. This payment typically shows up 60 days from your claim’s approval date. That amount covers every month since you applied for benefits.

Does Every Approved Claim Qualify for Some Backpay?

Many people approved for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits qualify for backpay. In most cases, that money goes directly into your back account within 60 days after approval. However, there are exceptions to every rule. Authorities can seize some or all backpay to cover these specific unpaid debts:

  • Unpaid income taxes
  • Past-due or current child support payments
  • Your outstanding balances on defaulted student loans

Creditors and debt collectors cannot legally seize any Social Security benefit payments.

How Retroactive Pay Works for Approved SSDI Claimants

If approved, then you may qualify for both back payments and retroactive pay. So what makes retroactive pay different from past-due back payments?

Retroactive pay covers any months your disability stopped you from working before applying for benefits. (Remember: You only qualify for retroactive pay if your disability started at least five months before your application date.) What’s more, federal law limits retroactive pay to cover no more than 12 months total. Here’s some good news, though: If you qualify for both backpay and retroactive pay, the SSA combines those payments. In most cases, you’ll get a single lump-sum deposit paid directly into your bank account.

Can SSI Beneficiaries Qualify for Past-Due Back Payments and Retroactive Pay?

If approved for SSI, you can get backpay for any past-due benefits you’re owed — but not retroactive pay. That’s because SSI is a needs-based program. And SSI payments come from the U.S. Treasury’s general funds, not the Social Security Trust Fund. SSDI benefits, on the other hand, come from the insurance policy you paid into with every paycheck while you worked. You must work five in the last 10 years full-time at jobs that withheld FICA taxes to qualify for SSDI. If you haven’t worked recently or enough to qualify for SSDI, the SSA automatically reviews your claim for SSI instead.

Like SSDI, SSI back payments cover the time since you applied to your approval date. SSI payments begin the month after your claim’s approved. If your SSI backpay is more than $2,313, the SSA pays it in three separate installments.

Related: How to Qualify for Social Security Disability Benefits

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