How SSA handles back payment for months of under paid benefits

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
poboyee
Posts: 19
Joined: Mon Jul 26, 2021 7:29 pm

How SSA handles back payment for months of under paid benefits

Post by poboyee »

I searched a lot on how the SSA handles back payments, of some benefit (increase) that was owed, but payment was delayed.
Didn't find much.

I found nothing in writing, or during phone calls with SSA agents - how or when they typically make back payments. One agent filed a request to their "processing center" to recalculate my 2022 benefits. Not sure if it helped.

This was for Delayed Retirement Credits from 2021, to be applied in Jan 2022, but were not.

Do they usually issue one check, for all retro, under paid benefits?

Do they ever provide an explanation or calculation of the back payment amount due?

Yesterday, in MySocialSecurity online acct, and in a downloadable "Benefits Verification Letter," they showed the increased monthly benefit, retroactive to Jan 2022, but no explanation. In my SSA acct "payment info", they show an increased check, starting in June 2022, but no explanation. "Here's your new monthly benefit."
I know what it is - many would not.

I'm confident in my calculation of the increase, that seems to match their benefit increase, which includes the 5.9% COLA to my Jan 2022 benefit increase.
Many people would have to hope that a .gov agency's calculation is correct.

Thanks
User avatar
anon_investor
Posts: 11149
Joined: Mon Jun 03, 2019 1:43 pm

Re: How SSA handles back payment for months of under paid benefits

Post by anon_investor »

poboyee wrote: Fri May 13, 2022 4:42 pm I searched a lot on how the SSA handles back payments, of some benefit (increase) that was owed, but payment was delayed.
Didn't find much.

I found nothing in writing, or during phone calls with SSA agents - how or when they typically make back payments. One agent filed a request to their "processing center" to recalculate my 2022 benefits. Not sure if it helped.

This was for Delayed Retirement Credits from 2021, to be applied in Jan 2022, but were not.

Do they usually issue one check, for all retro, under paid benefits?

Do they ever provide an explanation or calculation of the back payment amount due?

Yesterday, in MySocialSecurity online acct, and in a downloadable "Benefits Verification Letter," they showed the increased monthly benefit, retroactive to Jan 2022, but no explanation. In my SSA acct "payment info", they show an increased check, starting in June 2022, but no explanation. "Here's your new monthly benefit."
I know what it is - many would not.

I'm confident in my calculation of the increase, that seems to match their benefit increase, which includes the 5.9% COLA to my Jan 2022 benefit increase.
Many people would have to hope that a .gov agency's calculation is correct.

Thanks
If I recall correctly, my mother-in-law got it all in one lump sum payment (via direct deposit).
Last edited by anon_investor on Fri May 13, 2022 4:53 pm, edited 1 time in total.
jebmke
Posts: 15938
Joined: Thu Apr 05, 2007 2:44 pm
Location: Delmarva Peninsula

Re: How SSA handles back payment for months of under paid benefits

Post by jebmke »

I think lump sum. It should also be listed separately on the 1099-SSA when you get it. The lump sum can be treated as all one year for tax purposes or if it is based on prior years, there is a method to allocate it back to prior years [actually, they may break this out by year on the 1099]. Sometimes one method or the other is advantageous to the taxpayer.
When you discover that you are riding a dead horse, the best strategy is to dismount.
User avatar
nisiprius
Advisory Board
Posts: 46543
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: How SSA handles back payment for months of under paid benefits

Post by nisiprius »

In the past, I encountered a long delay--it might have been more than six months. I was told that the calculations were made in "batch runs" that occurred once? twice? a year. When the monthly benefits changed, I received a retroactive lump sum for the missed months. I, too, believe the lump sum was direct deposited in the usual account.

(No, they did not pay interest on the delayed payments).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Topic Author
poboyee
Posts: 19
Joined: Mon Jul 26, 2021 7:29 pm

Re: How SSA handles back payment for months of under paid benefits

Post by poboyee »

Thanks, everyone for helpful replies.
Talk about timing or irony or ...

For months, couldn't get a "real" answer from live SSA agents, nor a reply to written request for info, or asking how (or if) they'd handle backpayment of benefits. I learned, (since posting this today) the SSA calls it an "underpayment."
There are many types, of course & policies of what SSA will do - how or when, depends on exact benefit type and exact circumstances.

There's nothing in my SSA online acct about reimbursement of underpayment & no letter - so far (saving postage).
Couple hrs AFTER posting here, had several bank notices for automatic deposits.

More than one was from SSA TREAS nnn - XXSOC SEC & one from IRS.
One for an unfamiliar amount. Did some quick math & it's the SSA full back payment for retirement underpayment up through May.

Following past behavior, not a hint of what - or - who it was for (wife also gets SSA check). The IRS puts very short hint of what a check's for (tax ref), but not the year for the refund (I've sent some amended returns).
That's great & all, but they sent a check for months of underpayment, before sending the monthly check with increased benefit.
The underpayment check & (unchanged) monthly check, both deposited the same day.

Maybe it's just policy, but if they had the recalculated monthly benefit & also the underpayment per month, why didn't they just send an increased check for May? It all works out, but seems they keep lots of people in the dark.

I wonder if it takes longer to enter a monthly benefit into their system, than a check for months of underpayment? It all went to the same bank acct. Maybe they missed the (May) deadline to change a "regular" benefit check amt, but there's a later deadline to enter a back payment check???

Like Mulder & Scully, I'm pretty sure I'll never know if the real truth is out there, on why SSA does some things, the way it does.
User avatar
Eagle33
Posts: 1970
Joined: Wed Aug 30, 2017 3:20 pm

Re: How SSA handles back payment for months of under paid benefits

Post by Eagle33 »

Remember that the deposit you receive in May is actually your April SS benefit. Based on what you describe, your May benefit that will be deposited next month should be for the full correct amount.
Post Reply