Navigating Retroactive Social Security Benefits and Supplemental Security Income, § 404.408b

When receiving both retroactive Social Security benefits and Supplemental Security Income (SSI) payments for the same period, it’s essential to understand how the two may affect each other.

In this blog post, we’ll break down the key points of § 404.408b to help you better understand the reduction of retroactive monthly Social Security benefits where SSI payments were also received.

1. When is reduction required? A reduction of your retroactive Social Security benefits is required when: a. You are entitled to monthly Social Security benefits for a month or months before those benefits are paid; and b. SSI payments made to you for the same month or months would have been reduced or not made if your Social Security benefits had been paid when regularly due instead of retroactively.
2. How is the reduction calculated? Your retroactive monthly Social Security benefits will be reduced by the amount of the SSI payments that would not have been paid to you if you had received your monthly Social Security benefits when they were regularly due.
3. Which benefits are subject to reduction? Only monthly Social Security benefits are subject to reduction. Benefits paid after you have begun receiving recurring monthly Social Security benefits, and for which you did not have to file a new application, are not subject to reduction. The lump-sum death payment is also not subject to reduction.
4. What happens when there are changes affecting your claim? If there are subsequent changes affecting your claim relating to the reduction period, the amount of the reduction will be refigured. This is generally required when there is a change in your month of entitlement or the amount of your Social Security benefits or SSI payments for the reduction period.
5. How is the reduced amount reimbursed? The reduced amount will be: a. First used to reimburse the States for the amount of any federally administered State supplementary payments that would not have been made if the monthly Social Security benefits had been paid when regularly due; and b. The remainder, if any, shall be covered into the general fund of the U.S. Treasury for the amount of SSI benefits that would not have been paid if the monthly Social Security benefits had been paid when regularly due.

Example: Meet Jane, who became eligible for Social Security benefits in January 2023, but she did not file her application until May 2023. During the months of January, February, March, and April, Jane also received Supplemental Security Income (SSI) payments, including federally administered State supplementary payments.

When Jane’s application for Social Security benefits is approved in May, she is entitled to receive retroactive Social Security benefits for the months of January through April. However, since Jane already received SSI payments for those same months, a reduction of her retroactive Social Security benefits is required.

Let’s say Jane received a total of $2,000 in SSI payments during those four months. If she had received her Social Security benefits when regularly due (i.e., starting in January), her SSI payments would have been reduced by $1,200. Therefore, her retroactive Social Security benefits must be reduced by $1,200.

Out of the reduced $1,200, the following reimbursements will occur:

1. The States will be reimbursed for the amount of any federally administered State supplementary payments that would not have been made if Jane had received her Social Security benefits when regularly due.
2. The remainder, if any, will be covered into the general fund of the U.S. Treasury for the amount of SSI benefits that would not have been paid if Jane had received her Social Security benefits when regularly due.

In this example, Jane’s retroactive Social Security benefits will be reduced due to her concurrent receipt of SSI payments for the same period.

Conclusion: Understanding the relationship between retroactive Social Security benefits and SSI payments is crucial for those who receive both. This blog post aimed to simplify the complex language of § 404.408b to help you navigate the reduction process. If you have any questions or concerns regarding your benefits, it’s always best to consult with a professional or the Social Security Administration.

https://www.ssa.gov/OP_Home/cfr20/404/404-0408b.htm