What Is Bad Faith
Bad faith occurs when the Social Security Administration (SSA) or an administrative law judge (ALJ) unreasonably denies, delays, or underpays your SSDI or SSI claim despite evidence that meets the legal standard for approval. This differs from a simple denial. Bad faith means the decision-maker either ignored relevant medical evidence, failed to follow established procedures, or made a determination that no reasonable person reviewing the same facts would reach.
Bad Faith in SSA Claims
The SSA denies approximately 65 to 70 percent of initial SSDI applications. Most denials are defensible based on the medical-vocational guidelines. Bad faith occurs when the SSA:
- Fails to obtain available medical records despite your authorization and cooperation
- Ignores treating physician statements that directly address your functional limitations
- Applies the wrong regulatory standard to your medical condition
- Delays processing your claim beyond the standard 60 to 90 day review period without legitimate reason
- Calculates back pay incorrectly or withholds back pay owed under 42 U.S.C. Section 423
- Continues to request the same medical evidence repeatedly without explanation
Bad Faith at ALJ Hearings
Approximately 45 percent of appeals result in approval by an ALJ, compared to the 30 percent initial approval rate. An ALJ acts in bad faith if they reject credible medical evidence without explanation, refuse to develop the record when gaps exist, or make assumptions about your work capacity that contradict the evidence. If an ALJ states your testimony is not credible but provides no specific reasons tied to the record, this can constitute bad faith. Similarly, if medical evidence from a treating source is systematically dismissed in favor of single consultative examinations, you may have grounds to challenge the decision.
How to Document Bad Faith
Proving bad faith requires specific evidence:
- Written SSA decisions that contradict their own medical evidence or prior findings
- Treating physician records showing functional limitations that the SSA never addressed in the denial letter
- Dates showing unexplained delays between claim submission and decision
- ALJ hearing transcripts where medical testimony or evidence is not mentioned in the decision
- Incorrect back pay calculations compared to your benefit approval date and payment records
Common Questions
- Can I sue the SSA for bad faith? You cannot sue the SSA directly for damages based on bad faith in the same way you would sue a private insurer. Your remedy is requesting reconsideration, appealing to an ALJ, filing with the Appeals Council, or pursuing judicial review through federal court under 42 U.S.C. Section 405(g). A federal judge can reverse a bad faith decision and order payment of benefits plus attorney fees under certain circumstances.
- What is the difference between a wrong decision and bad faith? An ALJ can make an incorrect legal conclusion or misinterpret your medical evidence without acting in bad faith if they followed proper procedure and provided reasoned explanation. Bad faith involves deliberately ignoring evidence, failing to follow regulations, or making decisions no reasonable person would reach.
- How does back pay calculation relate to bad faith? If the SSA approves your claim but calculates back pay incorrectly by using the wrong onset date or failing to apply the 5-month waiting period correctly, you can request recalculation. Repeated calculation errors or refusal to correct clear mathematical mistakes may constitute bad faith.