Annual Trustees Report for 2015

Yesterday the Social Security Board of Trustees released its annual report for 2015 with the following news release.

The full 2015 Trustees Report is at http://www.socialsecurity.gov/OACT/TR/2015/

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Wednesday, July 22, 2015 – For Immediate Release

Social Security Board of Trustees: Trust Fund Reserve Gains One Year for Projected Depletion Date 

The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, one year later than projected last year, with 79 percent of benefits payable at that time. The DI Trust Fund will become depleted in 2016, unchanged from last year’s estimate, with 81 percent of benefits still payable.

In the 2015 Annual Report to Congress, the Trustees announced:

  • The combined trust fund reserves are still growing and will continue to do so through 2019. Beginning with 2020, the cost of the program is projected to exceed income.
  • The projected point at which the combined trust fund reserves will become depleted, if Congress does not act before then, comes in 2034 – one year later than projected last year. At that time, there will be sufficient income coming in to pay 79 percent of scheduled benefits.
  • The projected actuarial deficit over the 75-year long-range period is 2.68 percent of taxable payroll — 0.20 percentage point smaller than in last year’s report.

While the projected depletion date of the combined OASDI trust funds gained a year, the Disability Insurance Trust Fund’s projected depletion year remains 2016. I agree with President Obama, we have to keep Social Security strong, protecting its future solvency. President Obama’s FY 2016 budget proposes to address this near-term Disability Insurance Trust Fund’s reserve depletion. By reallocating a portion of payroll taxes from Old Age Survivors to the Disability Trust Fund – as has been done many times in the past – would have no adverse effect on the solvency of the overall Social Security program,” said Carolyn W. Colvin, Acting Commissioner of Social Security.

We believe that Congress must take action to reallocate a portion of the payroll tax rate between the trust funds to avoid deep and abrupt cuts or delays in benefits for individuals with disabilities who paid into the system while they worked and now need the benefits they earned to support themselves and their families,” Colvin said.

Other highlights of the Trustees Report include:

  • Income including interest to the combined OASDI Trust Funds amounted to $884 billion in 2014. ($756 billion in net contributions, $30 billion from taxation of benefits, $98 billion in interest, and less than $1 billion in reimbursements from the General Fund of the Treasury—almost exclusively resulting from the 2012 payroll tax legislation)
  • Total expenditures from the combined OASDI Trust Funds amounted to $859 billion in 2014.
  • Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
  • The asset reserves of the combined OASDI Trust Funds increased by $25 billion in 2014 to a total of $2.79 trillion.
  • During 2014, an estimated 166 million people had earnings covered by Social Security and paid payroll taxes.
  • Social Security paid benefits of $848 billion in calendar year 2014. There were about 59 million beneficiaries at the end of the calendar year.
  • The cost of $6.1 billion to administer the program in 2014 was a very low 0.7 percent of total expenditures.
  • The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.6 percent in 2014.

The Board of Trustees comprises six members. Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Sylvia M. Burwell, Secretary of Health and Human Services; and Thomas E. Perez, Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.

View the 2015 Trustees Report at www.socialsecurity.gov/OACT/TR/2015/.

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Same-sex marriage update

On June 26, 2015, the Supreme Court issued a decision in Obergefell v. Hodges, holding that same-sex couples have a constitutional right to marry in all states. As a result, more same-sex couples will be recognized as married for purposes of determining entitlement to Social Security benefits or eligibility for Supplemental Security Income (SSI) payments.

The Social Security Administration is working with the Department of Justice to analyze the decision and provide instructions for processing claims. Local offices are receiving updated instructions for different states on a flow basis.

Information for same-sex couples is on the Social Security website at http://www.socialsecurity.gov/people/same-sexcouples/.

A  direct link to this section is at the bottom of the SSA website homepagesame-sex website

What is a typical Social Security disability amount?

Q: What is a typical Social Security disability amount?

A: As of May 2015, the average monthly Social Security disability amount to a disabled worker was $1,165. This does not include benefits paid to eligible family members.

Also as of May, the average monthly amount paid to the eligible spouse of a disabled worker was $316 and the average amount to an eligible child was $350.

These and other amounts are in Table 2 shown here.

Rather than using a national average, a more accurate and personal estimate is on your Social Security Statement. In the “Your Estimated Benefits” section is “If you become disabled right now, your payment would be about $XXX a month.”

This estimate is based on your actual work record, which is included on the Statement so that you can check it for accuracy.

Obtain your personal Statement online at any time by creating your personal, pin and password controlled, my Social Security account.

The Statement is also mailed on a limited basis. In September 2014, the Social Security Administration began mailing Statements to workers attaining ages 25, 30, 35, 40, 45, 50, 55, and 60 and over, who are not receiving Social Security benefits and do not yet have a my Social Security account. Statements are mailed three months prior to your birthday.

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.