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About Howard Kossover

I am the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Based in Grand Forks ND, I work with organizations, government agencies and businesses concerning all aspects of the Social Security programs.

What does Medicare cover? Medicare & You, 2015

The Centers for Medicare & Medicaid Services (CMS), a component of the Department of Health & Human Services, is the agency in charge of the Medicare program. Since the Social Security Administration is not directly responsible for Medicare, SSA employees cannot provide detailed information about Medicare coverage. Along with providing general information, the Social Security role with Medicare is to help people enroll in the program. 

The official Medicare website is at www.medicare.gov. The Medicare national toll-free phone number is 1-800-MEDICARE (1-800-633-4227) / TTY 1-877-486-2048. 

Detailed Medicare coverage information is in the annual publication Medicare and You. This official Medicare booklet contains a summary of Medicare benefits, coverage decisions, rights and protections, and answers to frequently asked Medicare questions.  

In October, CMS announced that the standard 2015 Medicare Part B (Medical) monthly premium is remaining at $104.90, the same as in 2014. The standard amount covers only about 25 percent of program costs so some people pay a higher Part B premium based on their IRS tax return modified adjusted gross income. Also unchanged from 2014, those 2015 premium amounts are here. Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.  

General information about Medicare is at the Social Security Administration website, www.socialsecurity.gov. From the homepage, go to the Benefits tab and then to Medicare. The booklet, Medicare, (SSA publication 05-10043) is a good place to start.   

Medicare age remains 65. Certain people younger than age 65 can qualify for Medicare based on disability, including those having permanent kidney failure. People usually enroll in at least part of Medicare at age 65, even if not planning to start Social Security benefits yet. It takes only about 10 minutes to complete the online Medicare application.

Annual retirement earnings test amounts for 2015

Q: In 2015, how much can I earn before my Social Security retirement is reduced? 

A: The annual retirement earnings test concerns how your own employment earnings in a year affect your Social Security in that year. The earnings test includes only your personal gross wages or net self-employment for the full calendar year. Your other income or income of a spouse is not applicable.

Three annual earnings levels exist, all based on your full retirement age (FRA). FRA depends on your year of birth. Learn yours here. 

Earnings test amounts for 2015 have changed from 2014. They are: 

  • If under full retirement age (FRA) for the entire calendar year, $1 in benefits will be deducted for each $2 earned above the 2015 limit of $15,720.
  • If you reach FRA in 2015, $1 in benefits will be deducted from each $3 earned above the 2015 limit of $41,880, but only for earnings before the month you reach FRA.
  • No earnings limit exists starting with the month you reach full retirement age.  

Are you starting Social Security retirement in 2015? People retiring mid-year may have already earned over the annual limit for their age. To allow the start of SSA retirement regardless of expected calendar year earnings, there is a special one-time rule based on monthly earnings. This applies for one year, usually the first year of retirement, and lets people receive Social Security for months that they are retired.  

For example, a person retiring in 2015, at least age 62 but younger than full retirement age the entire year, can receive retirement for months that gross wages do not exceed $1,310 even though calendar year earnings will be above retirement test amounts. Similar rules apply for self-employment.   

Consider the retirement earnings test before beginning Social Security. If your plans include working part-time, will those earnings reduce benefits for the year? Can you limit your earnings to stay below earnings test levels? Is retiring with part-time work your best option or should you continue working full time, without SSA benefits, for the immediate future? Keep in mind that Social Security retirement is permanently reduced if started when younger than FRA. 

Learn about the earnings test, including the special, one-time, monthly test, at www.socialsecurity.gov/retire2/whileworking.htm. Examples of how the earnings test is applied are there. 

Reminder: Do you receive Social Security now? Do you expect to earn over your applicable earnings test amount in 2015? If so, provide your estimated earnings amount to SSA early in the year so that benefits can be adjusted in advance to avoid incorrect payment. You can change estimates as needed.

The earnings test does not apply to people receiving SSA benefits due to their own disability. If receiving due to disability, contact Social Security before working.


Compare your retirement plans with the online estimator

Q: The online Social Security Statement retirement estimates cannot be changed to consider different plans. Can I estimate my retirement amount using different earnings or ages? 

A: Yes. Estimate the effect of lower or higher future earnings, or retirement at different retirement ages, with the Retirement Estimator at www.socialsecurity.gov/estimator/.  

One of the Social Security retirement planning tools in the Retirement Planner section at www.socialsecurity.gov/retire2/, the Estimator connects to your actual Social Security earnings record to provide personal retirement estimates at age 62, at your full retirement age (FRA), and at age 70. 

Just as on your Statement estimate, the initial Retirement Estimator reply assumes your most recent wages or self-employment earnings will continue into the future. Unlike the Statement, with the Estimator you can change the default reply to obtain estimates at different ages or with different future earnings amounts. 

Comparing multiple estimates for any given age based on the initial earnings level and then with lower or higher earnings provides an approximate result of different earnings on your future SSA retirement amount. With separate requests, you can estimate benefits based on either lower or higher earnings. Future earnings of more than one amount cannot be used in one estimate.

Your actual Social Security retirement monthly amount is based on your best 35 years of employment and your age, in months, compared to your full retirement age. The Retirement Estimator provides estimates at different ages. 

For estimates in specific months, other online tools are available in the Retirement Planner section, www.socialsecurity.gov/retire2/. If your interest is only for months before your full retirement age (FRA), use the chart for your FRA. To consider months either before or after your FRA, go here.

You can use the Retirement Estimator if you are enrolled in Medicare, but not if you have applied for or receive SSA benefits. The Estimator reply does not show your personal information or earnings record. 

To view your Social Security Statement create a my Social Security account at www.socialsecurity.gov/myaccount/. Your Statement will also show your earnings record and family benefit estimates not available elsewhere.



Medicare Part D and other scam warnings

The Medicare Part D (prescription drug coverage) plan open enrollment period is from October 15 to December 7.   

Part D open season is an important time. You should review your existing Part D plan to be sure it fits your needs. One that was previously good might not be your best choice now. Learn about Part D at the Medicare website, www.medicare.gov. To find a Part D plan, go to the “Find health & drug plans” section. 

Now is also a time to be especially alert for scams targeting you.  

For example, one making the rounds now involves people being called by a scammer. The crook asks for personal information, such as your Social Security number and birthdate, so that they can allegedly send you an updated Medicare card. Do not give out this type of information. Protect yourself. 

Medicare Part D (prescription drug coverage) coverage information is not on your Medicare card since Part D policies are sold by private insurance companies.  

Social Security does not make cold calls or send emails to you offering a Medicare card. Replacement Medicare cards are not sent unless you ask for one. You can request one online or by contacting Social Security directly, at no cost, but you are doing the requesting.  

Medicare is not the only popular basis for scams. 

Social Security does not make cold calls to verify your bank account for direct deposit. Do not give out bank account information. If you get a letter saying that SSA has changed where your payment goes, and you did not make the change, contact Social Security immediately.  

The upcoming cost-of-living adjustment (COLA) increase is another scam topic. Social Security does not cold call for personal information related to the COLA. If you receive Social Security or Supplemental Security Income (SSI), no special update is needed from you. The COLA will be received automatically. 

When someone contacts Social Security, whether by phone or in-person, the SSA representative asks questions to verify identity. This helps protect you. However, the big difference is that you contacted SSA first. This is not an unexpected cold call to you. 

For online information, be sure you are at the real Social Security website, www.socialsecurity.gov. There are no charges for program services. Guard yourself online too.

Should Mom give me the money?

Q: I am 15 and receive Social Security, which goes to my Mom. Should she should give me the money? 

A: When a person younger than age 18 receives Social Security or Supplemental Security Income (SSI), the payment is almost always sent to an adult on their behalf rather than directly to the child. This adult is called the representative payee and it is his or her responsibility to direct the management of the funds. 

Representative payees are also appointed for adults who are incapable of managing their benefits. Payees are often family members but can be different people or even an organization. 

In the booklet A Guide for Representative Payees, a new payee is instructed in how funds should be used and how funds not immediately needed should be held for the future. Payees are told about required reports to Social Security about the funds. Representative payee instructions go into detail about how funds are to be used.  

Should your Mom give you the money? Not directly but the funds must be used for you. Just handing the benefit money to you could mean that she was not exercising proper control of the funds in your best interest. 

A key representative payee responsibility is to know beneficiary needs so that the Social Security or SSI funds can be best used for the person’s care and well-being, in particular making sure that day-to-day food and shelter needs are met. Having basic needs of food, shelter and clothing met indicate benefits are used for you even if you do not directly handle the money.  

Social Security benefits for children might continue or end at age 18. If they continue past age 18, the child often starts to receive them directly, without having a representative payee. Consider asking your Mom to share or create a budget with you. This would show you how the funds are used while giving you practice in handling money.

Reporting possible Social Security fraud

Q: Someone I know receives Social Security disability and is working part-time. How can this be looked at without me providing my name? 

A: Social Security takes potential fraud very seriously. I will write about that in a moment but first will say a few words about this question of working and disability benefits. 

It is a wrong, but popular, assumption that people receiving disability benefits cannot have a job. 

In addition to non-medical requirements, Social Security disability or Supplemental Security Income (SSI) disability have a strict, work based, definition of disability and relatively few people found eligible eventually return to work at levels high enough to end benefits. Despite this, people receiving disability related benefits are encouraged by the Social Security Administration to return to work and many do on a limited basis. If you receive disability benefits and start to work, contact Social Security to report the work and learn the specific details you need to know. 

Rules are different for Social Security and SSI disability but both programs have multiple work incentives to help people return to work. Beneficiaries are required to report work activity. Social Security disability reporting requirements are here; SSI requirements here. 

Returning to the reporting fraud question, you are encouraged to do so through the Social Security Office of the Inspector General (OIG). The direct website of OIG is http://oig.ssa.gov/.  The OIG site is easily reached through the “contact us” links on the Social Security homepage, www.socialsecurity.gov. From the “contact us” page, click on “Report Fraud, Waste or Abuse.” 

The OIG website  has lots of information including some situations, with examples, that may be considered as fraud, waste or abuse against the Social Security administration. Several of these are:

1. Making false statements on claims: When people apply for Social Security Benefits, they state that all information they provide on the forms are true and correct to the best of their knowledge. If a person reports something they know is not true, it may be a crime

2. Concealing facts or events which affect eligibility for benefits: It may be considered fraud if a person makes a false statement on an application or does not tell SSA of certain facts that may affect benefits.

3. Misuse of benefits by a representative payee: When a person receiving benefits cannot handle their own financial affairs, Social Security appoints a relative, friend, or another individual or organization to handle their Social Security matters. This person or organization is called a Representative Payee and it may be a crime if a payee misuses these benefits.

4. Buying or selling counterfeit or legitimate Social Security cards.

This is not a complete list. 

To report a suspected fraud, follow the instructions here. You can do this online or in other ways. Note what information will be requested. You can remain anonymous, but that might limit an OIG investigation.

Importance of Social Security

Social Security benefits were never intended to provide your full retirement income. Under current law, if you have average earnings, your Social Security retirement benefits will replace about 40 percent of your pre-retirement earnings. The percentage is lower for people in the upper income brackets and higher for people with low incomes.

Despite this, 65 percent of SSA beneficiaries over age 65 received at least half of their income from Social Security in 2012.

To be more specific, in 2012, 87 percent of married couples and 86 percent of nonmarried persons aged 65 or older received Social Security benefits. Social Security was the major source of income (providing at least 50 percent of total income) for 52 percent of aged beneficiary couples and 74 percent of aged nonmarried beneficiaries.  

Social Security was 90 percent or more of income for 22 percent of aged beneficiary couples and 47 percent of aged nonmarried beneficiaries.

For the above chart, “An aged unit is a married couple living together or a nonmarried person, which also includes persons who are separated or married but not living together.”

Total income excludes withdrawals from savings and nonannuitized IRAs or 401(k) plans; it also excludes in-kind support, such as Supplemental Nutrition Assistance Program (or SNAP, formerly known as food stamps) benefits and housing and energy assistance.

Source for this information is the publication Fast Facts & Figures About Social Security, 2014. The chart shown is from the section “Income of the Aged Population.”

Lots of Social Security and Supplemental Security Income information is in this publication. I think it is interesting. Perhaps you will too.





Faces and Facts of Disability

This summer I wrote about Faces and Facts of Disability, a section of the Social Security website to help increase public awareness of the SSA disability program (SSDI) by providing program facts and personal stories about people receiving disability benefits. The intent of Faces and Facts of Disability is to help dispel misconceptions about the Social Security disability program and show its critical importance through personal stories of people receiving benefits.

A new video was recently added to Faces and Facts of Disability. It explains how the disability program is an insurance program that protects individuals who have paid Social Security taxes while working and explains the role of this vital social safety net in the lives of millions of severely disabled Americans. In the words of one featured beneficiary, “If I did not have Social Security, I would lose my home; I would not be able to drive; I would not be able to afford groceries.”  

Contrary to the misconception that disability beneficiaries are ”cashing in,” the average disability payment is barely enough to keep a person above the current poverty level, providing only one’s basic needs. In the month of September 2014, the average national amount to a disabled worker receiving Social Security disability was $1,145.34. My October 24 post has average amounts for other benefits for September. 

Many other facts about the Social Security disability program are in this short video including eye-opening details about people of all ages who receive disability benefits, and the critical difference these modest payments make in their lives.  

Also highlighted in the video is Social Security’s zero-tolerance policy toward fraud and the agency commitment to ensuring disability benefits are paid to the right person, in the right amount, at the right time.

The video is approximately 4 ½ minutes in length. To view it, visit www.socialsecurity.gov/disabilityfacts and click on Faces and Facts of Disability Video. 

More about Social Security disability is here.



Social Security number as tax ID

Q: When did Social Security numbers start being used for tax ID?

A: President Kennedy signed into law Public Law 87-397 on October 5, 1961. This legislation was designed to cut down on tax cheating by assigning a tax identity number to every taxpayer.

 In 1962, the Internal Revenue Service adopted the Social Security number (SSN) as its official taxpayer identification number. IRS assigns a tax number to people not eligible for a SSN. 

The Tax Reform Act of 1986, signed into law by President Reagan, required that every dependent age 5 or older listed on a tax return had to have his or her own SSN. This new requirement doubled the Social Security number workload the following year. 

Related to this, many children today receive a Social Security number (SSN) as part of their birth registration, a process called Enumeration at Birth. Starting when birth certificate information is provided at the hospital, this voluntary and free process allows the state agency issuing birth certificates to share information about the child with the Social Security Administration. A SSN is then provided to the child and mailed to the parents without any additional paperwork or cost.  

More about Social Security numbers for children is here. General information for obtaining, updating or replacing a SSN card is at www.socialsecurity.gov/ssnumber/. There is no charge for any SSN activity.


Average Social Security and SSI amounts in Sept. 2014

For September 2014, last month, following are three easily understood tables providing Social Security and Supplemental Security Income (SSI) information. These tables are online here

Supplemental Security Income (SSI) is a separate, low income program for the aged over 65, disabled or blind children, and disabled or blind adults that is administered by the Social Security Administration. Since SSI is completely different from Social Security, a person meeting the individual rules for each could become eligible for both programs. Income from Social Security reduces SSI amounts.

Learn more about Social Security and SSI at www.socialsecurity.gov. 

Table 1 shows the number of people, in thousands, receiving Social Security and Supplemental Security Income (SSI) divided by Social Security only, SSI only, and people receiving both. 

Table 2 shows Social Security benefit information for September 2014, separated by number of beneficiaries receiving specific types of benefits and the average dollar amount of those benefits. The number of beneficiaries is again shown in the thousands, with total benefits shown in the millions and average amounts in dollars.

The “notes” in table 1 explain differences in total Social Security beneficiaries shown between table 1 and table 2.

Social Security was never intended to provide full retirement income and this table emphasizes that fact. In September 2014, the average SSA retirement benefit, for the retiree only and excluding any family benefits, was $1,302.56.

Table 3 shows Supplemental Security Income (SSI) benefit information for September 2014, separated by number of recipients receiving specific types of benefits and the average dollar amount of those benefits. As above, the number of recipients are shown in the thousands, total benefits shown in the millions and average amounts in dollars.

In September 2014, the average SSI amount was $535.21.

These tables are online here in case you cannot read them clearly.