Savings will not prevent Social Security disability benefits

Sometimes a topic suddenly starts to generate questions. The following question came up three separate times while I was teaching recently. Perhaps it will interest you too.  

Q: How much money can I have in savings before my Social Security disability stops?  

A: Your savings will not stop Social Security disability benefits. Whether rich or poor, your financial value does not matter for Social Security retirement, survivors or disability benefits.  

Work is at the base of all Social Security benefits, not financial need. Requirements vary with type of benefit but the person whose Social Security number record is involved needs enough work to be insured or benefits are not payable. Learn more about Social Security benefits at www.socialsecurity.gov 

If you receive Social Security through your own record, then your work record was used. If you receive benefits through another person’s record, such as a child eligible through a parent, then that person had to have enough work. 

What can confuse people on this topic is that the Social Security Administration is responsible for more than Social Security retirement, survivors and disability benefits.  

Eligibility for the low-income Supplemental Security Income (SSI) program does include income and resource requirements. SSI can provide benefits to those over age 65 as well as blind or disabled children or adults. SSI is very different from Social Security, but both programs are administered by the Social Security Administration. 

People receiving SSI must stay below certain income and resource levels to remain eligible. Resources include savings and other items of financial value that you own and can turn into cash but not everything you own is counted toward the resource limit. For an eligible individual the total level of counted resources is $2,000. For an eligible couple, this amount is $3,000. These resource levels will continue for 2015. If exceeded, the person is no longer eligible.

Some types of resources that do not count toward these totals are the house you live in and household goods, usually one vehicle, some insurance policies and some burial funds. This is not a complete list. An overview of Supplemental Security Income resources is here 

Since Social Security and SSI are completely different programs, one person can receive both of them if the separate requirements are met.

In summary, if a person receives both Social Security and Supplemental Security Income (SSI), his or her savings or other resources will not stop Social Security benefits but they can end SSI benefits.

 

 

 

 

Annual SSA disability report released

The Annual Statistical Report on the Social Security Disability Insurance Program, 2013 was released this week.

This annual report provides program and demographic information about the people who receive Social Security disability benefits—disabled workers, disabled widow(er)s, and disabled adult children. Topics covered include beneficiaries in current payment status; benefits awarded, withheld, and terminated; geographic distributions; Social Security beneficiaries who receive Supplemental Security Income; and the income of disabled beneficiaries.

Following is from the Highlights section of the report:

Size and Scope of the Social Security Disability Program

Disability benefits were paid to just over 10.2 million people.

Awards to disabled workers (868,965) accounted for over 90 percent of awards to all disabled beneficiaries (965,190).

In December, payments to disabled beneficiaries totaled about $11.2 billion.

Benefits were terminated for 769,171 disabled workers.

Supplemental Security Income payments were another source of income for about one out of seven disabled beneficiaries.  (Note: not everyone receives Social Security through his or her own work.  For example, family benefits to disabled children or disabled widows or widowers are possible. 

Profile of Disabled-Worker Beneficiaries

Workers accounted for the largest share of disabled beneficiaries (87.4 percent).

Average age was 53.

Men represented under 52 percent.

Mental disorders was the diagnosis for about a third.

Average monthly benefit received was $1,146.42.

Supplemental Security Income (SSI) payments were another source of income for about one out of eight.  

Social Security benefits and citizenship

Q: I am a legal resident alien, working full-time and paying Social Security taxes on my earnings. Will I be able to receive Social Security benefits at retirement? 

A: Yes, assuming you work long enough and meet all usual requirements. United States citizenship is not required to receive Social Security benefits. Your future retirement, or payment of any Social Security benefits through your work record, will be based largely on your work history, not citizenship. You will need to prove legal admittance into the country when applying for benefits. 

Visitors to the United States can usually obtain a Social Security number (SSN) only if authorized to work by the Department of Homeland Security. Work authorization is routinely verified when a person applies for an original, name change correction or replacement card.  

If you become a citizen in the future, contact Social Security to update your citizenship on your Social Security number record. This will make a future application for retirement benefits easier, especially if you use the online application because, since your record would show United States citizenship, legal admittance would not have to be established.  

Learn the documents needed and print the Social Security number application at www.socialsecurity.gov/ssnumber/. Documents submitted must be originals certified by the issuing agency, such as Homeland Security, and are immediately returned. Self-made photocopies or notarized copies are not accepted.

To protect your personal information, SSN applications cannot be submitted electronically. No fees are involved for any SSN action. Protect yourself by going to the official Social Security website, www.socialsecurity.gov for SSN information.

 

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.

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.

 

 

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.

Social Security Announces 1.7 Percent Benefit Increase for 2015

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 64 million Americans will increase 1.7 percent in 2015, the Social Security Administration announced today. 

The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 58 million Social Security beneficiaries receive in January 2015. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2014. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics. 

Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $118,500 from $117,000. Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes because of the increase in the taxable maximum.  

Information about Medicare changes for 2015 is available at www.medicare.gov 

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola 

A fact sheet showing the effect of COLA related automatic changes for 2015 is here.

Using your SSA Statement

In previous posts, I have encouraged readers to create a personal my Social Security account at www.socialsecurity.gov/myaccount/. Whether or not you now receive Social Security monthly benefits, online services are there for use. To create a my Social Security account, you must be at least 18 years old, have an email address and a United States mailing address. There are no fees to do this. As of September 30, nearly 14.5 million people had opened their free my Social Security account. 

If not yet receiving ongoing benefits, the major tool available is your Social Security Statement.

Many people think only of retirement when Social Security is discussed, but, in fact, the program includes disability and survivors benefits too. Including family member benefits, retirement represents about 70 percent of national Social Security benefits, survivors about 11 percent, and disability about 19 percent.Nationally, about 18.3 percent of the entire United States population, including adults and children of all ages, receive monthly Social Security benefits. 

Of course, retirement is the desired Social Security benefit, but studies show that just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67 and people die at all ages.   

For all of these possibilities, your Social Security Statement is a great family financial planning tool. After creating your my Social Security account, look at your Statement (sample here), especially your earnings record and estimated benefits sections, at least annually. 

Directly from your actual Social Security work record as reported by employers, your earnings record for many years is shown. This is the only place where you can see your personal earnings history. Future Social Security benefits on your record are based on your lifetime earnings. Review your record for accuracy. If there is an error, follow the correction instructions. 

Now look at the estimated benefits section. The Social Security website retirement planning section, contains tools to estimate retirement amounts but disability and survivors estimates, potentially to your children and other family members, are only on your Statement. Useful at all ages and especially for young families with dependent children, these current estimates can be a foundation for your other family financial planning. 

Creating your personal my Social Security account lets you access your Statement whenever desired. Starting for December birthdays, this past September the Social Security Administration resumed periodic mailings of paper Statements. Workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 who are not receiving Social Security benefits and who are not registered for a my Social Security account will receive the Statement in the mail about 3 months before their birthday. After age 60, people will receive a Statement every year. The agency expects to send nearly 48 million Statements each year.

 

 

 

Medicare Part B premiums for 2015

Medicare Part B premiums will remain the same in 2015 as for 2014.  

As announced on October 9th by the Department of Health & Human Services (DHHS), the agency that administers Medicare, the standard 2015 Medicare Part B (Medical) premium remains unchanged from the 2014 amount of $104.90 per month. Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.  

Not everyone pays the standard Medicare Part B (Medical) premium amount. Based on the amount of their Federal tax return modified adjusted gross income (MAGI), some people pay a higher Part B premium. 

Medicare Part B premium information for 2015 is on the Medicare website, www.medicare.gov. 

The detailed DHHS press release about 2015 Medicare Part B premiums is here.