What Happens When Your Disability Claim Is Approved: Your Next Steps

What Happens When Your Disability Claim Is Approved: Your Next Steps

After months or even years of waiting, the approval letter finally arrives. Relief comes first, and questions follow close behind. Knowing what happens when your disability claim is approved helps you protect your benefits, plan your finances, and avoid mistakes that can cost you money. Here is what to expect and what to do first.

Read Your Notice of Award Carefully

The Social Security Administration (SSA) confirms approval with a Notice of Award. Do not just file it away. This letter lists:

• Your monthly benefit amount, based on your lifetime earnings record
• Your onset date, the date SSA says your disability began
• Your entitlement date, when benefits start after the waiting period
• Your back pay total and how it will be paid
• Your Medicare start date
• Your expected review timeline

Check the onset date first. If SSA chose a date later than when you actually stopped working, you may be missing months of benefits. You generally have 60 days from receiving the letter to appeal, and SSA assumes you received it five days after the date on the notice. Keep the original letter permanently. Many people have the letter reviewed by an attorney at Louis Law Group before the deadline passes, because an incorrect onset date is easy to miss and hard to fix later.

The Waiting Period and Your Back Pay

SSDI has a five-month waiting period. Benefits do not begin until the sixth full month after your onset date. Because the application process is slow, most approved claimants are owed back pay: a lump sum covering every month from your entitlement date until the approval. If you applied long after you became disabled, you may also receive up to 12 months of retroactive benefits from before your application date.

Back pay usually arrives within a few weeks to a couple of months after approval, separate from your first monthly payment. Very large amounts can be paid in up to three installments, six months apart.

If an attorney represented you, SSA withholds the approved fee from your back pay and pays it directly. By law the fee is 25 percent of your back pay, capped at $9,200. You owe nothing out of pocket, and nothing is charged against your future monthly checks.

When Your Monthly Payments Begin

SSDI is paid one month behind. The payment for June, for example, arrives in July. Your payment day depends on your birthday:

• Born on the 1st through 10th: second Wednesday of the month
• Born on the 11th through 20th: third Wednesday
• Born on the 21st through 31st: fourth Wednesday

If you also receive SSI, or you were already receiving benefits before May 1997, you are paid on the 3rd instead. Payments come by direct deposit or a Direct Express debit card. Set up your deposit information quickly, since a missing bank account is the most common reason a first payment is delayed. Benefits also rise most years through a cost-of-living adjustment, and SSA will mail you a notice each time.

Medicare Coverage After Approval

SSDI recipients become eligible for Medicare after 24 months of entitlement to benefits. The clock starts at your entitlement date, not your approval date, so the months covered by your back pay count toward the 24. If you waited a long time for approval, your Medicare may start within a few months, or even right away. People with ALS or end-stage renal disease have different, faster rules.

Until Medicare begins, keep your current coverage if you can. COBRA, a Marketplace plan, or Medicaid may fill the gap. Once Medicare arrives, review your options for prescription coverage (Part D) and supplemental plans, because choosing late can mean permanent penalties.

Working, Reporting Changes, and Medical Reviews

Approval does not mean you can never work, but you must follow the rules. You are required to tell SSA promptly about:

• Any job, self-employment, or income, even part-time
• Workers' compensation or other public disability payments, which can reduce your SSDI
• Changes in your medical condition, address, or bank account
• Time spent in a hospital, prison, or living outside the United States

SSA offers a trial work period of nine months, not necessarily in a row, within a rolling 60-month window. During those months you can test your ability to work and keep your full benefit as long as you report your earnings. After that comes an extended eligibility period, during which benefits can resume without a new application if your earnings drop. Ask SSA or an attorney how these rules apply before accepting a job.

SSA also conducts continuing disability reviews. If your condition is expected to improve, a review usually comes about every three years. If improvement is possible, expect one every five to seven years. If improvement is not expected, the interval is about seven years. When the paperwork arrives, answer it by the deadline and keep up with your treatment. Missing a review form is a common reason benefits are stopped, and it is avoidable. Also tell your spouse and children about the approval, since eligible family members may qualify for additional benefits based on your record.

Taxes and Financial Planning

SSA mails a Form SSA-1099 each January showing what you received. Some SSDI benefits are taxable once your combined income passes $25,000 for a single filer or $32,000 for joint filers. A lump-sum election on your tax return can let you assign back pay to the years it was actually owed, which may lower your tax bill. You can also ask SSA to withhold federal tax from your payments using Form W-4V. A tax professional can help you decide, and it is worth doing before you spend the back pay.

If your claim was only partially approved, or SSA approved a later onset date than you expected, you still have options. Louis Law Group can review the decision, explain your appeal rights, and help you meet the deadline.

If you believe you qualify for SSDI benefits, Louis Law Group can help. Contact us today for a free consultation.