When you hear the term “lump sum” payment or “back benefit” payment, these phrases refer to the payments for past due benefits that an SSDI or SSI claimant can receive. In my practice, I frequently represent clients who receive $20,000, $30,000 or more when their cases are approved.
While it would obviously be nice to receive a check for $30,000 in the mail, you have to remember that the reason why these past due benefit checks are so large has to do with the long delays it may take your claim to work through the system.
For example, in the Atlanta area, it can take two to three years from the time a person applies until he is approved and receives his check. It takes this long because Social Security Administration employees are overworked and because thousands upon thousands of people apply every day and each claim must be evaluated.
Example of Past Due Benefit Calculation
Here is an example of how the lump sum payment system works using the facts of a recent case I tried and won. Tony was a long-time employee of a local college who worked as a steam mechanic. On the weekends, Tony and his adult son made extra money installing gutters on houses. In August, 2014, Tony and his son were installing gutters on the second floor of a large house. The ladder on which Tony was standing gave way and Tony fell 20 feet onto a concrete pad.
Tony continued to work at the college for about six months before the pain became too overwhelming and he retired in March, 2015. Since his accident, Tony has had 3 back surgeries and currently is treating with a pain management physician. Tony applied for benefits in April 2015 and used March 15, 2015 as his “onset date.”
The hearing in Tony’s case was held in December, 2010, and he was approved for benefits on March 3, 2018 based on his onset date of March 15, 2015. Tony will be paid past due benefits as follows:
March 15- August 31, 2015 – no benefits paid – SSDI benefits are subject to a 5 month waiting period. Note that SSA only counts full months – in this case April – August, 2015.
September 1, 2015 – November 30, 2015 – $1,500 per month x 5 months = $7,500.00.
December 1, 2015 – November 30, 2016 – $1,550 per month x 12 months = $18,600.
December 1, 2016 – November 30, 2017 – $1,575 per month x 12 months = $18,900.
December 1, 2017 – February 28, 2018 – $1,575 per month x 3 months = $4,725.
March 1, 2018 on-going – SSDI payments adjusted yearly for inflation
Total past due benefits payable to Tony: $49,725. My fee, as Tony’s lawyer, was 25% of these past due benefits with a limit of $6,000. So, Tony will receive a lump sum of $43,725.
Obviously, your lump sum payment may be different than Tony’s. The factors that come into play include the amount of your monthly benefit and the number of months you have to wait for an approval of your case.
Increased Importance of Your Administrative Law Judge Hearing
Because you can end up waiting two to three years for your Administrative Law Judge hearing, you should do everything in your power to improve your chances at winning at the hearing level. While you can appeal an unfavorable hearing decision, your chances of a successful appeal before the Appeals Council are small.
Obviously, I practice Social Security disability law and I hope that you will consider my firm to represent you. But whether you choose me or another lawyer, I urge you to avoid the temptation of appearing at your hearing without counsel. If you will be waiting two to three years for your first chance to be heard, and tens of thousands of dollars is at stake, it makes little sense to put yourself in an unfamiliar hearing setting with a busy judge you do not know in a procedure driven system.