Are SSA amounts based on where you live?

Q: Do Social Security retirement amounts change based on what state you live in?

A: No. Your retirement amount is based on your personal work history over many years and your age when starting benefits, not on where you live. It will not change if you move to a different state.

Your best 35 years of work are key when your retirement benefit is computed. These best 35 years, often including years immediately before retirement but selected from your full work history, are weighted for inflation and used to compute your Social Security retirement amount as if you were full retirement age (FRA). If you do not have 35 years of work, zeros are added in to reach 35 years.

When your full retirement age amount is known, the specific amount for the month you are starting Social Security is determined by reducing or increasing the FRA amount, depending on if you are younger or older than FRA for the month when benefits start. Go to the SSA Retirement Planner section to estimate your own Social Security retirement amount.

Once receiving Social Security benefits, any cost-of-living increase is computed nationally based on changes in a consumer price index from one year to the next, not where you live.

In a related manner, benefits to you if disabled or survivors benefits to your family if you die are also based on your personal work history and not where you live.

Your Social Security work record is based on employer W-2 reports or your Schedule SE tax return if self-employed. Check it for accuracy by creating a personal my Social Security account at http://www.socialsecurity.gov/myaccount/ and viewing your SSA Statement.

Earnings for 2014 will not show on your record until approximately October 2015. It is very important for your future benefits that your work record be accurate. If it has an error, contact your local office to correct it.

Anniversary of Social Security payment date change

Payment Schedule 2015Today is the anniversary of the change to having several different Social Security payment dates throughout the month. All Social Security payments were issued on the third of the month until 1997. On June 11, 1997, the first Social Security benefits were issued based on birthdate.

Since payment date is always a popular topic, I have a link to the Social Security 2015 payment date schedule in the blogroll section of this post.

With several exceptions, since 1997 Social Security payment dates depend on the number holder’s (NH) date of birth. You are the NH if receiving Social Security on your own work record. If receiving based on the work of someone else, that person is the NH.

Therefore, if you receive Social Security retirement or disability through your own work, the payment date is based on your birth date. A child or spouse receiving benefits on your record will also have a payment date based on your birth date.

A couple can receive Social Security payment on different days if each person is receiving his or her own retirement benefit.

Social Security benefits are paid in the following month. This means the benefit for May is received in June.

 

Working and Supplemental Security Income (SSI)

On April 23, I posted about returning to work when receiving Social Security disability. Special rules called work incentives make it possible for people with disabilities, whether receiving Social Security or Supplemental Security Income (SSI), to work and still receive monthly payments and Medicare or Medicaid.

Returning to the topic, today I will mention one of the work incentives when receiving Supplemental Security Income (SSI).

Since SSI is very different from Social Security, the work incentives are different too. SSI involves cash assistance payments to aged, blind and disabled people (including children under age 18) who have limited income and resources. The Federal government pays for SSI from general tax revenues, not Social Security money.

If receiving both Social Security and SSI, you need to follow the separate rules for each program. To discuss your own benefits, speak to a Social Security representative.

Always report a return to work. This is very important. Also report related changes including stopping the work. 

A very basic Supplemental Security Income (SSI) work incentive is the exclusion of some employment income when figuring out the amount of a monthly SSI payment.

When working, the first $65 of earnings received in a month do not count, plus one-half of the remaining earnings. This means that less than one-half of your earnings are counted against your SSI payment amount.

For an example of how this works, use gross wages of $165 received in a month. Not counting the first $65 dollars leaves $100 remaining. Then, not counting an additional one-half of this $100 remaining amount leaves only $50 to reduce the overall SSI amount. In this example of the earned income exclusion work incentive, of the received $165 wages in the month, $115 is not used to lower benefits.

People receiving Supplemental Security Income (SSI) usually report their earnings on a monthly basis to keep benefit amounts accurate.  Discuss how to do this when reporting a return to work.

Referring to the post of April 23, when a person receiving SSI returns to work, the Social Security trial work period (TWP) or concept of substantial gainful activity (SGA) do not apply. To restate, if you receive both Social Security and SSI, you need to follow the separate rules for each program.

Only one SSI work incentive was mentioned today. Many other work incentives can apply. To discuss your own benefits, speak to a Social Security representative.

Work_Incentive

A new way to replace your Medicare card online

ReplaceMedicareCard

Today a Social Security Administration press release announced that now you can replace your Medicare card through your personal my Social Security account.

In the release, Carolyn W. Colvin, Acting Commissioner of Social Security, announced that Medicare beneficiaries can now obtain a replacement card if they have lost, damaged, or simply need to replace it online using a my Social Security account.

I’m excited about this newest online feature to the agency’s my Social Security portal and the added convenience we’re providing Medicare beneficiaries,” Acting Commissioner Colvin said. “Any my Social Security account holder who misplaces their Medicare card will be able to request a replacement card using their online my Social Security account.”

With services for you whether already or not yet receiving Social Security benefits, my Social Security is a secure, online hub for doing business with Social Security that you personally control by pin and password.

Current Social Security beneficiaries can use it to manage their account. For example, you can change an address, adjust direct deposit, obtain a benefit verification letter, request a replacement SSA-1099, and now to replace a Medicare card.

People not yet receiving monthly benefits can verify their earnings and obtain estimates of future benefits by viewing their Social Security Statement.

Learn more about my Social Security at www.socialsecurity.gov/myaccount/. There you can read how to create your own account and learn how Social Security verifies and protects your identity when you do.

mySSA

SSA Annual Statistical Supplement, 2014, available

The Social Security Annual Statistical Supplement, 2014, is available now.

Prepared annually since 1940, the Supplement is a major resource for data on our nation’s social insurance and welfare programs. The majority of the statistical tables present information about programs administered by the Social Security Administration—the Old-Age, Survivors, and Disability Insurance program (OASDI), known collectively as Social Security, and the Supplemental Security Income (SSI) program.

In addition, data are presented on the major health care programs—Medicare and Medicaid—and social insurance programs, including workers’ compensation, unemployment insurance, temporary disability insurance, Black Lung benefits, and veterans’ benefits. The Supplement also includes program summaries and legislative histories that help users of the data understand these programs.

There is a wealth of useful information in the Supplement. View the Table of Contents and find the topics of interest to you.

Here are some tidbits from the Highlights and Trends section:

Social Security:

About 58.0 million persons received Social Security benefits for December 2013, an increase of 1,220,425 (2.2 percent) since December 2012. Seventy percent were retired workers and their spouses and children, 11 percent were survivors of deceased workers, and 19 percent were disabled workers and their spouses and children.

  • Seventy-three percent of the 37.9 million retired workers received reduced benefits because of entitlement prior to full retirement age. Relatively more women (75.4 percent) than men (70.3 percent) received reduced benefits.

Supplemental Security Income:

  • In December 2013, 8,363,477 persons received federally administered SSI payments—100,600 more than the previous year. Of the total, 2,107,524 (25.2 percent) were aged 65 or older; 4,934,272 (59.0 percent) were blind or disabled aged 18–64; and 1,321,681 (15.8 percent) were blind or disabled under age 18.

Medicare:

Number of enrollees in July 2013 (one or both of Parts A and B)   52.4 million

Aged                                     43.6 million

Disabled                                   8.8 million

Unemployment: Total payments, 2012    $42.6 billion

Workers Compensation: Benefit payments, 2012  $61.8 billion

Veterans’ Benefits:

Number of veterans with disability compensation or pension, 2013

Service-connected disability                     3,734,000

Nonservice-connected disability                   305,000

Poverty Data:

Percentage of population with income below poverty level, 2013

All ages                                                              14.5 percent

Children under age 18 living in families              19.5 percent

Persons aged 65 or older                                     9.5 percent

2014 Statistical Report

Social Security disability work incentives

Q: I receive Social Security disability and want to return to work. What will this do to my benefits?

A: For specific information about your own benefits, contact Social Security and speak with a representative.

In general, special rules called work incentives make it possible for people with disabilities receiving Social Security or Supplemental Security Income (SSI) to work and still receive monthly payments and Medicare or Medicaid.

Remember that Social Security, including disability (SSDI), and SSI are different programs, with different work incentives for returning to work.

Always report a return to work. This is very important. Also report related changes including stopping the work.

For Social Security disability, a main work incentive is the trial work period (TWP).

The trial work period allows you to test your ability to work for at least 9 months. During a trial work period, you receive full disability benefit regardless of how much you earn as long as your work activity has been reported and you continue to have a disabling impairment. The 9 months does not need to be consecutive and your trial work period will last until you accumulate 9 months within a rolling 60-month period. Certain other rules apply. In 2015, gross monthly earnings of $780 or more will usually count as a month toward the TWP.

After a trail work period is completed, your work activity will be reviewed to see if you earnings are considered substantial gainful activity (SGA) . Exceptions apply but, in general, in 2015 monthly gross earnings of at least $1,090 are considered SGA for a person who is not blind and $1,820 for a person who is blind. Ongoing ability to work at a substantial gainful activity level can result in benefits being stopped.

If this occurs, you have an extended period of disability (EPE).

This means that if your disability benefits stop after successfully completing the trial work period and ongoing work at the substantial gainful activity (SGA) level, your Social Security disability benefits can be automatically reinstated without a new application for any months in which your earnings drop below the SGA level.

This reinstatement period lasts for 36 consecutive months following the end of the trial work period. You must continue to have a disabling medical impairment in addition to having earnings below the SGA level for that month.

Continuation of Medicare.

Of major importance, even if cash benefits end, for most beneficiaries existing Medicare coverage continues through the EPE and beyond.

Most persons with disabilities who work will continue to receive at least 93 consecutive months of Hospital Insurance (Part A); Supplemental Medical Insurance (Part B), if enrolled; and Prescription Drug coverage (Part D), if enrolled, after the 9-month Trial Work Period (TWP).

You do not pay a premium for Part A. Although cash benefits may cease due to work, you have the assurance of continued health insurance. (93 months is 7 years and 9 months.)

This is not a complete list of work incentives for Social Security disability insurance (SSDI). There are different work incentives for Supplemental Security Income (SSI). More general information is here.

Again, for details about your own benefits, speak to a Social Security representative.

Work_Incentive

Disability is Social Security

I participate in a listener call-in radio show and a recent caller asked about Social Security disability. At age 53, he was found eligible for Social Security disability benefits and wanted to know what effect this would have on his future “real” Social Security, meaning retirement. His question provides today’s topic.

First, Social Security disability benefits are real Social Security, just another part of the program. The three parts of Social Security are retirement, survivors and disability.

Full retirement age (FRA) is a frequent topic when discussing Social Security retirement. Based on year of birth, it is the specific age that a person becomes eligible for a retirement amount that is neither reduced nor increased from the full retirement age amount. Benefits started prior to FRA are reduced by the number of months involved while benefits started afterward are increased in a similar way.

When determined eligible for Social Security disability, a person is essentially said to have reached full retirement age and their benefit amount is not reduced for age, even if they are actually much younger than their retirement FRA. Benefit amounts for disability are based on your career earnings, much as they are for retirement or survivors benefits.

Assuming a person remains eligible for Social Security disability, there is no change in benefits received once they actually reach their retirement FRA. All that would take place is an internal SSA change moving them from disability to retirement, without any visible change to the person’s benefits.

If a person went off disability and later became eligible for retirement, the years of none or low earnings while on disability would not be used to compute the retirement amount.

Medicare coverage begins after a person receives disability benefits for two years. Whether based on disability or retirement, the Medicare coverage is the same.

To estimate your own Social Security disability amount, create a my Social Security account and view your personal Statement. It contains an estimated amount that assumes you become disabled this year.

Learn more about Social Security disability here.

Voluntary tax withholding from Social Security benefits

People filing application to start Social Security benefits often ask if taxes are withheld from their monthly payments. They are not. Taxes are not routinely withheld from Social Security benefits.

Especially during this time of year as people pay their Federal income tax, another popular question is whether taxes can voluntarily be withheld from Social Security payments. Yes, you can arrange this.

If desired, you can request voluntary Federal tax withholding from your monthly Social Security benefits. You may find doing this easier than paying quarterly estimated tax payments. See http://www.socialsecurity.gov/planners/taxwithold.htm.

To start voluntary Federal tax withholding you need to complete Internal Revenue Service (IRS) Form W-4V, Voluntary Withholding Request, and return it to your local Social Security office. To change or end an ongoing voluntary withholding, complete another form W-4V.

Withholding is by your selected percentage of monthly benefits, not a flat dollar amount. When completing the W-4V you select the percentage of benefits for tax withholding. Available options are to have 7 percent, 10 percent, 15 percent or 25 percent of your monthly benefit withheld.

The Social Security Administration has no authority to withhold state or local taxes from your benefit. Voluntary withholding is only for Federal taxes.

Social Security employees cannot provide tax advice. If voluntary withholding interests you, discuss it with your tax preparer or call IRS at 1-800-829-3676 (TTY 1-800-829-4059). To start voluntary tax withholding, complete and provide IRS Form W-4V to your local Social Security office.

Average Social Security and SSI amounts in February 2015

For February 2015, 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.

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

2015-02 table 1

Table 2 shows Social Security benefit information for February 2015, 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.

Social Security was never intended to provide full retirement income and this table emphasizes that fact. In February 2015, the average SSA retirement benefit, for the retiree only and excluding any family benefits, was $1,331.44.

2015-02 table 2

Table 3 shows Supplemental Security Income (SSI) benefit information for February 2015, 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 February 2015, the average SSI amount was $539.61. The 2015 maximum payable to an eligible individual is $733 per month. This maximum is reduced by other income, including Social Security benefits.

2015-02 table 3

These tables are online here.

Changing a child’s representative payee

Q: My ex-wife receives Social Security disability benefits for herself plus benefits for our daughter, for whom she has custody. Within the next few months, I will have custody and our daughter will live with me full-time.

Will Social Security start sending benefits for her to me or will they continue going to my ex-wife? Will the amount change when she is living with me?

A: A person receiving benefits on behalf of someone else is their representative payee. As a general guideline, the parent with legal custody is the preferred payee compared to a parent without custody but exceptions exist based on individual situations.

Changing the representative payee for your daughter, or anyone, is not automatic. You will need to request a change by completing an application to be the new payee for your daughter. This is not an online application so contact your Social Security office to do this. Expect to prove that you have custody and that your daughter is living with you.

A worker’s, in this case your ex-wife, own Social Security amount is based on his or her earnings history over many years. Benefits to a child or other family member do not change how much the worker receives for himself or herself.

Assuming you become your daughter’s representative payee, with her benefits sent in your care, the individual Social Security benefit of your ex-wife will not change although she would no longer receive the amount for your daughter.

The Social Security benefit amount for a child is based on the earnings record of the worker and will be the same wherever the child is living.

Representative payees are responsible for using Social Security benefits on behalf of the eligible person. As representative payee, you will have to report how funds for your daughter are used. Other responsibilities include reporting if your daughter is no longer living with you. Details are in the Guide for Representative Payees.