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SSDI lump Sum payment what is it?

Due to the lengthy time it takes for the Social Security Administration (SSA) to process disability cases it’s not unusual for many disability applicants to be owed hundreds or thousands of dollars in back pay. Recently on our disability forum a user asked, “If I qualify for disability benefits will I receive a SSDI lump sum payout?”

SSDI and lump sum payouts


SSDI lump sum payouts may be paid to you if you are approved for SSDI benefits. The SSDI lump sum payout could include not only back pay, but also retroactive benefits. Retroactive benefits may be paid to claimants whose onset date for their disability was more than five months from their application date. Retroactive benefits accumulate from the date the disability began (the onset date) to the date of the application was submitted to the SSA.

Supplemental Security Income and Lump Sum payments


Lump sum payouts for Supplemental Security Income differ from SSDI lump sum payments and are a bit trickier. You may be entitled to lump sum payouts for the months you waited to receive approval for benefits, but retroactive benefits are not paid.

Some SSI applicants expect to receive their SSI lump sum payouts all at one time but are disappointed and surprised to find they will receive SSI payouts in installments instead. Current regulations state that if SSI back pay is three times more than the maximum monthly SSI benefit than the payouts must be done in installments.

In this case the back pay will be paid through three installments, six months apart. The first two payments will follow the regulations outlined above, and the third payout will include the remainder of back pay.

Exceptions to the regulation exist so talk to the SSA if you have high medical bills or lack the money to meet other basic necessities. Claimants who are expected to die within one year may also request immediate lump sum payments for the full amount of SSI back pay.

What is the five month waiting period for SSDI benefits?


There is a five month waiting period to receive SSDI benefits. If your lump sum settlement was not as high as you expected it might be because after the SSA established the date of onset for your condition they subtracted money for the five month waiting period.  In other words, the date of entitlement does not begin until five months after the established onset date (EOD).

For example, if the SSA determines your onset date was seventeen months before your submitted your application, you would be entitled to 12 months retroactive SSDI benefits (the maximum) prior to the date of the SSDI application.

SSI does not allow retroactive benefits, and there is not a five month waiting period to receive SSI benefits.

How long will it take to receive my SSDI lump sum payout?


If you are approved for SSDI benefits you will generally receive your SSDI lump sum back pay benefits within two months or 60 days from your approval date. Some claimants will receive it sooner; others will wait much longer.

Contact your local Social Security office if you are concerned about the status of your back payments. Unfortunately, even your local office may not have information about SSDI lump sum payouts because much of the processing for these payments is done out of state.

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