Tag Archives: Federal government

Medicare Medical (Part B) premium varies with income

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Medicare Medical (Part B) coverage helps pay for doctors’ services and outpatient care along with other services.  

Most people incorrectly think that the costs of providing Medicare Part B coverage are covered by the monthly Part B premium. 

Since its start, the Medicare Part B premium has been highly subsidized. The standard Part B premium paid by most people covers only about 25 percent of actual coverage cost, with the government paying the remaining 75 percent. In 2013, the standard Medicare Part B premium is $104.90 per month. 

Since 2007, a small percentage of higher income beneficiaries have paid a higher monthly Part B premium. This affects less than 5 percent of people with Medicare. Most people do not pay a higher premium. Higher Medicare Part B premiums start for individuals having a modified adjusted gross income (MAGI) above $85,000 or couples above $170,000. 

Using an income-based sliding scale based on the amount of modified adjusted gross income reported to the IRS, these premiums could equal 35, 50, 65 or 80 percent of the total premium cost. Increased monthly premiums can be appealed. In addition, if you pay an increased premium and your income has gone down because of the following reasons, an increased premium can be reviewed without an appeal. These reasons are:

  • You married, divorced, or became widowed;
  • You or your spouse stopped working or reduced your work hours;
  • You or your spouse lost income-producing property due to a disaster or other event beyond your control;
  • You or your spouse experienced a scheduled cessation, termination, or reorganization of an employer’s pension plan; or
  • You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy, or reorganization.

If any of the above applies, you will be asked for documentation verifying the event and the reduction in your income.

Higher-income beneficiaries with Medicare prescription drug coverage (Part D) also pay higher premiums.  

 More information is in the booklet “Medicare Premiums: Rules for Higher-Income Beneficiaries, online at www.socialsecurity.gov/pubs/10536.html.

General  Medicare information is at http://www.socialsecurity.gov/pgm/medicare.htm and at the official Medicare website, http://www.medicare.gov/.

 

You can own a home and receive SSI

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Q:  Can a person who owns a house and car receive Supplemental Security Income?

A:  Yes, depending on the details.

Supplemental Security Income (SSI) is a low-income program for people at least age 65, and disabled or blind adults or children. Resource limits exist for SSI, with resources defined as items you own or can convert to cash including bank accounts, property and vehicles. There are income limits also. SSI is a very different program from Social Security, although people apply for it at Social Security.

Not everything you own counts as a resource. If you live in it, your home including the land it is on, generally is not counted toward resource levels. If you own the home but do not live in it, both home and land will probably count as resources. One vehicle usually does not count as a resource either. 

Maximum SSI monthly amounts in 2013 are $710 for an eligible individual and $1,066 for an eligible couple, reduced by other income including Social Security benefits. Resource maximums are $2,000 for an individual and $3,000 for a couple. Subject to the SSI income limits, people can receive both SSI and Social Security benefits because they are two different programs. 

As with a home or vehicle, other resources might not count towards SSI resource levels. Most household goods, some insurance and some burial funds usually are not included.

Not all income counts for SSI either. For example, portions of wage and self-employment income, pensions, and State or local assistance based on need are not counted. 

SSI information is at http://www.socialsecurity.gov/pgm/ssi.htm and in SSA publication 05-11000, Supplemental Security Income.

To apply for SSI or ask questions, contact Social Security. Call the national toll-free number, 1-800-772-1213 (TTY 1-800-325-0778) or contact your local SSA office.

Social Security office hours

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I am writing with a reminder on Social Security field office hours and to provide information regarding options for completing Social Security service online and by telephone.

Effective November 19, 2012, Social Security field offices nationwide began closing to the public 30 minutes earlier each day. For example, a field office that was usually open to the public Monday through Friday from 9 a.m. to 3:30 p.m. now closes daily at 3:00 p.m.

In addition, effective January 2, 2013, offices began closing to the public at noon every Wednesday.

Most local Social Security offices are open 9 a.m. to 3 p.m. on Monday, Tuesday, Thursday, and Friday and 9 a.m. to Noon on Wednesday. A few small offices have different hours. View local office hours online in the Popular Services section at www.socialsecurity.gov.

Most Social Security services do not require a visit to a local office. Many services, including applying for retirement, disability or Medicare benefits, signing up for direct deposit, replacing a Medicare card, obtaining a proof of income letter or informing us of a change of address or telephone number are conveniently available at www.socialsecurity.gov or by dialing our toll-free number, 1-800-772-1213.

People who are deaf or hard of hearing may call our TTY number, 1-800-325-0778. Many of our online services also are available in Spanish at www.segurosocial.gov.

Pensions and Social Security, Part 3 – GPO

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For the relatively few people involved, today completes the series about pensions that might affect Social Security benefits. 

The general rule is that your company pension will not affect your Social Security benefits because most employment is covered by Social Security.  

The usual exception to this are pensions from government employment not covered by Social Security. A government pension from work covered by Social Security will not affect SSA benefits.

Not covered by Social Security means you did not pay Social Security payroll tax on those earnings, you did not earn coverage for SSA benefits and those earnings do not appear on your SSA work record. Any government level can be involved, not just Federal or state. Local government employment, including school districts, may or may not be covered by Social Security. 

Last week I discussed the Windfall Elimination Provision (WEP), when the person receives Social Security retirement on his or her own record through other work, separate from the non-covered government employment.

Today’s topic is the Government Pension Offset (GPO), involved when the Social Security benefits are through someone else’s record rather than your own work. The GPO affects SSA benefits as a spouse, widow or widower and is a direct offset by the government pension against Social Security benefits.

The Government Pension Offset reduces the amount of your Social Security spouse’s, widow’s or widower’s benefits by two-thirds of the amount of your government pension. The GPO can offset the total Social Security benefit.

Estimating the GPO amount is not hard. Do the math yourself or use the online GPO calculator. For example, if you receive a monthly civil service pension of $600, two-thirds of that, or $400, must be used to offset your Social Security spouse’s, widow’s or widower’s benefits. If you are eligible for a $500 spouse’s benefit, you will receive $100 per month from Social Security ($500 – $400 = $100).

Exemptions exist to the Government Pension Offset (GPO). More about the GPO is in SSA publication 05-10007, Government Pension Offset.

 Other factors that may affect Social Security benefits are part of the SSA online retirement planner at www.socialsecurity.gov.

 

 

 

Remembering Oklahoma City

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On April 19, 1995, at 9:02 a.m. CST, our nation experienced a profound tragedy in the terrorist bomb attack on the Alfred P. Murrah Federal Office Building in Oklahoma City.

Sixteen SSA employees and 24 visitors in the Social Security office there were among the 168 people who lost their lives in the bombing.

Events in Boston earlier this week add to the somber memory of this anniversary.

Pensions and Social Security, Part 2 – WEP

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Continuing the topic of how a pension might affect Social Security benefits, the general rule is that your company pension will not affect your Social Security benefits because most employment is covered by Social Security.

So what pensions can affect Social Security? The main pension involved is from government employment, not covered by Social Security. Key is that this government employment was not covered by Social Security, meaning you did not pay Social Security payroll tax on those earnings, you did not earn coverage for SSA benefits and those earnings do not appear on your SSA work record.

Relatively few people are in this situation, but it is important to those that are. Any government level can be involved, not just Federal or state. Local government employment, including school districts, may or may not be covered by Social Security. 

Since their government employment was not covered by Social Security, for those involved any eligibility to a Social Security monthly benefit would have been earned either from other work that the person had on their own or through someone else’s record, such as through a spouse. The government pension not covered by Social Security affects benefits differently depending on this.

Called the Windfall Elimination Provision (WEP), today’s topic is when the SSA benefit is from the person’s own work. SSA benefits through someone else’s record will be covered later.

Enacted in the Social Security Amendments of 1983, the Windfall Elimination Provision provides a different formula for calculating SSA amounts. While not a direct offset or reduction of the government pension against the persons own Social Security benefit, the formula used results in a lower Social Security ­amount than otherwise would be received.

Why is this? Social Security benefits replace a percentage of a worker’s pre-retirement earnings. By design, lower-paid workers get a larger percentage of pre-retirement earnings than higher paid workers. Work not covered by Social Security does not appear on the person’s SSA record. This incorrectly makes the person’s average earnings appear lower, leading to a larger percentage of pre-retirement earnings paid. The Windfall Elimination Provision formula adjusts for this. 

The WEP formula takes into account how many years of work you have under Social Security covered employment. Overall, the reduction in the Social Security benefit cannot be more than one-half of the amount of the pension from work not covered by Social Security taxes.

The Windfall Elimination Provision does not affect most people. More about it is in SSA publication 05-10045 – Windfall Elimination Provision.

Use the special WEP Online Calculator if the WEP involves you. The usual website calculators, including the Retirement Estimator and your Social Security Statement, will not provide an accurate estimate when the WEP is a factor.

 

 

Pensions and Social Security, Part 1

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Last week I taught several Social Security pre-retirement sessions, always a source of questions. Questions about pensions and Social Security were asked at each session, providing today’s topic. 

The general rule, with one main exception, is that your company pension will not affect your Social Security benefits. 

Pension payments, annuities, and the interest or dividends from your savings and investments are not earnings for Social Security purposes. Only earned income, your gross wages or net income from self-employment, is covered by Social Security. You may have to pay income tax on pensions, annuities, interest or dividends, but you do not pay Social Security taxes. Those types of income are not on your Social Security record.

So what pensions can affect Social Security? The main pension involved is from government employment that was not covered by Social Security. Key here is that this government employment was not covered by Social Security, meaning you did not pay Social Security payroll tax on those earnings, you did not earn coverage for SSA benefits and those earnings do not appear on your SSA work record.  

Government employment can be from any level, not only Federal or state levels. For example, local government employment, including school districts, may or may not be covered by Social Security.

If your government employment is covered by both a pension plan and Social Security, you pay Social Security and Medicare taxes just as you would for any other SSA covered job. You earn coverage for the SSA retirement, survivors and disability programs and your earnings will be on your SSA record. This pension will not affect your Social Security benefit.

Federal employment provides an example of when a government pension might affect Social Security benefits, and when it will not. Noted above, key is whether the employment was covered by Social Security.

Until 1984, Federal government employment was covered under the Civil Service Retirement System (CSRS) and not by Social Security. Since this employment was not covered by Social Security, employees did not pay Social Security tax on earnings, did not earn SSA coverage and those earnings are not on their SSA work records. A CSRS pension will generally affect a Social Security benefit, if the person becomes eligible for one. Since CSRS covered work did not provide Social Security coverage, eligibility for a Social Security benefit would be from other work that the person had on their own or through someone else’s record. More about this will be in future posts.

A second Federal retirement system, the Federal Employees Retirement System (FERS), started in 1984. People who began working for the Federal government in 1984 or later are covered by FERS instead of the Civil Service Retirement System (CSRS). Work under FERS is covered by Social Security. Employees pay SSA taxes, earn SSA coverage and their earnings are shown on their Social Security work record. A FERS pension does not affect a Social Security benefit.

The Retirement Planner section of the Social Security website, www.socialsecurity.gov, has information and calculators to help in your retirement planning. Concerning today’s topic, see “Learn how certain types of earnings and pensions can affect your benefits.”

 

 

 

 

 

Budget update in March SSA newsletter

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Did You Know? You can read and subscribe to a free, monthly, Social Security Administration electronic newsletter at http://www.socialsecurity.gov/newsletter/.

Along with other articles, the current Social Security Update has highlights from the March 14, 2013, testimony before Congress by Carolyn Colvin, Acting Commissioner of Social Security.  

Her testimony before the House Committee on Appropriations, Subcommittee on Labor, Health, and Human Services, discussed service delivery challenges facing the agency including budget issues, related to and separate from sequestration. Read her full testimony at http://www.socialsecurity.gov/legislation/testimony_031413.html.

In her testimony, Ms. Colvin noted services provided by the Social Security Administration in Fiscal Year 2012. In part, she said:

“Few government agencies touch as many people as we do. The programs we administer provide a financial safety net for millions of Americans, and many consider them the most successful large-scale Federal programs in our Nation’s history. The responsibilities with which we have been entrusted are significant. In FY 2012, we:

· Paid over $800 billion to almost 65 million beneficiaries;
· Handled over 56 million transactions on our National 800 Number Network;
· Received over 65 million calls to field offices nationwide;
· Served about 45 million visitors in over 1,200 field offices nationwide;
· Completed over 8 million claims for benefits and 820,000 hearing dispositions;
· Handled almost 25 million changes to beneficiary records;
· Issued about 17 million new and replacement Social Security cards;
· Posted over 245 million wage reports;
· Handled over 15,000 disability cases in Federal District Courts;
· Completed over 443,000 full medical continuing disability reviews (CDR); and
· Completed over 2.6 million non-medical redeterminations of SSI eligibility.”

Also within her testimony, Ms. Colvin stated ongoing budget driven challenges facing the agency, related to and separate from sequestration.  In part, she said:

“The current budget situation is exacerbating the negative effects of over two straight years of funding levels nearly a billion dollars below the President’s budget requests. With fewer employees to serve our customers, we are seeing serious signs of service deterioration. Examples include:

- This week, close to 12,000 visitors to our field offices will have to wait over 2 hours to be served, a figure that has almost tripled in just the last 4 months;

-The average wait time for field office visitors without an appointment increasing by 40 percent, from just 21 minutes in FY 2010 to about 30 minutes through January of FY 2013;

-Our 800-number average busy rate increasing from 4.6 percent of all calls in FY 2010 (which equates to 2.6 million calls) to about 15 percent of all calls through January of FY 2013 (which equates to 3.3 million calls and puts us on-pace for a projected 10.5 million calls for FY 2013); and

-Our average speed of answer for the 800-number more than doubling from about 3.5 minutes in FY 2010 to over 7.5 minutes through January of FY 2013.”

Several articles are in Social Security Update each month. Read and subscribe to this free electronic newsletter at http://www.socialsecurity.gov/newsletter/.

 

 

Phishing – computer fraud warning

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The Social Security website, www.socialsecurity.gov, has a warning about a “phishing” computer fraud. 

This particular warning is about a false email message pretending to promote use of my Social Security accounts. An unsolicited email contains links not related to the Social Security Administration, which, if followed, could result in theft of your personal information.

Emails of this type are not from Social Security. SSA does not send emails to promote my Social Security nor does agency personnel make cold calls for this. Official Social Security letters are sent by regular surface mail.

Establishing your my Social Security account is a good idea. The direct link to do so is http://www.socialsecurity.gov/myaccount/ or reach it through the Social Security homepage, www.socialsecurity.gov.

A personal my Social Security account can be established by anyone at least age 18, with different services available depending if the person is receiving Social Security benefits or not.

Protect your personal information. Read the phishing alert at http://www.socialsecurity.gov/myaccount/internetphishingalert.html.

Financial challenges facing the SSA Disability Program

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Stephen C. Goss, Chief Actuary of the Social Security Administration, testified before the House Committee on Ways and Means, Subcommittee on Social Security, on March 14, 2013.  

Speaking about financial challenges facing the Social Security Disability Insurance (SSDI) program, his full remarks covered these five topics:  

  1. An update on the projected financial status of the DI Trust Fund;
  2. The “drivers” of increasing costs over the past several decades;
  3. The Trustees’ assumptions for future trends in cost;
  4. Changes in the distribution of disabled workers by age and medical diagnosis; and
  5. Past and projected numbers of full medical continuing disability reviews (CDRs).

Using prose and charts, his testimony is easy to understand. While all of it is important, I think that most people will find his first two topics, the projected financial status of the Disability Insurance (DI) Trust Fund and the “drivers” of increasing costs of the DI program, the most useful.

 Read Mr. Goss’s full testimony at http://www.socialsecurity.gov/legislation/testimony_031413a.html.