Social Security disability, retirement or both?

Q: My brother is 64 years old but in poor health even though he still works full-time. His doctors are telling him to retire. The doctors say he should qualify for disability. What would be the best for him? Social Security or disability? 

A: Just to be clear, retirement, survivors and disability benefits are all Social Security, just different parts. 

Social Security disability information is here. Your brother should especially look at the Disability Planner section. 

Since the disability definition for Social Security purposes is based on ability to work, not just health, it is unlikely that a disability application by your brother would be approved as long as he continues working full-time, assuming no employer subsidy or special considerations that allow him to work. 

In general, if working in 2014 and having earnings that average more than $1,070 a month, a person cannot be considered disabled. Usually disability clients file for benefits after they stop working or have greatly reduced work activity. With that, the decision to file or not is his.  

Only your brother can decide what is best for him. He can file an application for Social Security disability or retirement. Disability benefits are not reduced for age. Retirement benefits are reduced for age if started when the person is younger than full retirement age (FRA).

Since your brother is at least the minimum SSA retirement age of 62, another available option is for him to file for both disability and retirement (reduced for age) benefits at the same time. 

If he does this, retirement benefits could be received while the disability application is pending. If disability is not approved, his retirement benefits continue at the reduced rate. If the disability application is approved, the benefit amount is reviewed and increased although not to 100 percent. Final amounts would be based on the number of months that he received a reduced retirement.

Survivor benefits if twice widowed

This interesting question came from a woman so, for convenience, the answer refers to Social Security survivors benefits for a widow. The information also applies to a widower.

Q: I did not work outside the home, but have been widowed twice. I started Social Security widows benefit at age 60 after my first husband died. Eventually I remarried, continuing those benefits, until now at age 65 was widowed for a second time. The SSA representative said I could receive a larger benefit amount from my second husband now or wait for an even higher amount at age 66. Please explain this.

A: It was excellent that this person contacted Social Security to learn about possible benefits. Social Security representatives can provide options to consider based on personal information you provide, but the decision is yours. Ask questions until you understand your options.

A person can be eligible for benefits on more than one Social Security work record. For this question, survivors benefits are possible through the work records of two deceased husbands. More routine examples are people who are eligible for retirement through their own work record and that of a spouse or through their own retirement and a suvivors record as widow or widower. When eligible on more than one record, combined benefit amounts will equal the highest individual benefit amount.

Age 60 is the earliest a widow or widower can start Social Security survivors benefits based on age. The younger you start, the larger the reduction. As with SSA retirement benefits, each month of delay in starting provides a larger monthly amount, but only up to when you reach your survivors full retirement age (FRA). Survivors FRA’s are different from retirement FRA’s.

For example, when started at age 60 the monthly reduction in survivors benefits is about 28.5 percent so this woman receives about 71.5 percent of the maximum survivors benefit amount on her first husband’s record.

Since she remarried after age 60, SSA survivors benefits through her first husband continued. These benefits cannot be paid if a person remarries before age 60, unless that marriage ends. Although possible, for simplicity it is being assumed that she did not receive SSA benefits as a spouse through her second husband’s work record.

Based on the question, she is younger than her full retirement age (FRA) for survivors benefits and SSA benefits from her second husband’s work record will be higher than those already being received.

Effective with the month of the second husband’s death, one option she has is to begin widow’s benefits through his work record immediately. These would be reduced for age. If exactly age 65, she would receive about 95.3 percent of the full amount.

Another option is that she could continue receiving only the widows benefit through her first husbands record and delay starting benefits through the second husband until she was older. That benefit amount would increase with each month of delay up to FRA when she would receive 100 percent of the amount payable through his record.

People of all ages receive monthly Social Security survivors benefits. Learn more at www.socialsecurity.gov/survivorplan/survivors.htm

When do I get credit for my 2013 earnings?

Q: I retired effective January 2014, so my current Social Security payment only reflects earnings through 2012. When will my retirement amount include 2013 wages? What do I need to do to make that happen?  

A: Earnings for 2013 are automatically reviewed for possible increase to your retirement benefits when posted to your work record, approximately by October 2014. You do not need to do anything for this to happen. The automatic review includes employment from wages and self-employment.  

Employers pay estimated taxes to IRS based on wages paid during the year but specific information of how much individual employees earned during a year are only sent to the Social Security Administration with annual W-2’s. Your employer reports earnings to Social Security at about the same time you receive your W-2 form. The employer report is a copy of the W-2.  

Employers of all sizes can register to report W-2 information electronically with Social Security Business Services Online. Incentives exist to encourage electronic W-2 reporting but many still are received by paper, requiring additional handling and processing time.  

W-2 processing for a year is usually completed during the fall of the following year, approximately October. Social Security receives more that 250 million wage reports annually. These are processed by employer report, not by individual employee. If you worked for more than one employer during the year, your total earnings will not be posted to your personal earnings record all at one time. Earnings from each employer will be added to your record when that employer’s report is processed.  

Your 2013 earnings will be automatically reviewed for possible increase to your retirement benefits when posted to your work record. While this review is automatic, it does not mean that benefit amounts will increase a significant amount or even at all. Retirement benefits are based on your best 35 years of employment, with the actual earnings amounts adjusted (indexed) to account for changes in average wages over the years. New earnings would have to replace earnings already used to increase your retirement amount. If 2013 earnings increase benefits, the increase is retroactive to the start of 2014.   

Since Social Security posts W-2 information all during the year, this automatic review might be sooner, especially if the employer reports W-2 data electronically with Social Security Business Services Online, but final reviews are completed when all W-2’s for the preceding year are processed in the fall. 

This review is done automatically every year that new earnings are posted to your work record. You do not need to take any action for this to happen.  See page 9 of “How Work Affects Your Benefits” at http://www.socialsecurity.gov/pubs/EN-05-10069.pdf.

Whether or not receiving monthly benefits, you can check your personal Social Security earnings record by creating your my Social Securityaccount and looking at your SSA Statement. Earnings on the Statement are updated as described above, with earnings for a year posted during the fall of the next.

Can I replace my Social Security card by mail?

Q: Can I replace my Social Security card by mail or do I have go to a SSA office?

A: At no charge, replacement Social Security number (SSN) cards can be requested by mail or at a SSA office. Either way, you need to complete the same application and present the same original documents.

Download the application and learn what documents are needed at www.socialsecurity.gov/ssnumber/.  

Documents submitted must be either original or a copy certified by the issuing agency, not a photocopy or notarized copy. All documents are returned to you.

Warning: There is no charge for any Social Security number action. Be aware of private for- profit websites that charge fees for providing the SSN card application. Go to the official Social Security Administration website, www.socialsecurity.gov.

Family benefits and SSA disability

Q: If a mother is receiving Social Security disability benefits, should her twelve year old son receive benefits too?

A: If a parent with eligible family members, including children, receives Social Security disability, then family benefits are usually payable but this is not always the case.

The total dollar amount payable to family members is based on the earnings record of the person receiving the Social Security benefits. If the person’s earnings history is very low, there is a possibility that family benefits cannot be paid even if there are otherwise eligible family members. This is not the usual situation but it does exist.

Assuming benefits can be paid on behalf of a child, the Social Security Administration would select a person or organization, called a representative payee, to receive the funds. Generally a family member, preferably a parent with custody, is selected as payee.

Note that disability benefits from the Supplemental Security Income (SSI) program do not have family benefits. SSI is only for the person having the disability. SSI is an income based program for people over age 65 and disabled adults or children. SSI is administered by the Social Security Administration but very different from SSA benefits.

 

 

If delayed, to what age do SSA survivors benefits increase?

Q: My husband and I both worked so each of us received our individual Social Security retirement, although his amount was more. I was age 64 when he died a year ago but decided to delay starting SSA survivors benefits as a widow to wait for a higher amount. Until what age will they keep increasing if I wait?

A: Differences exist between retirement and survivors Social Security benefits but, as with retirement, the younger you are when starting survivors benefits based on age, the larger the reduction. Reductions are based on the number of months away from full retirement age (FRA) a person is. Survivors FRA is different from retirement FRA. For example, for birth years 1945 – 1956, the survivors FRA is age 66 compared to birth years 1943 – 1954 for retirement FRA age 66.

Another big difference is that age based survivors benefits to widows or widowers can start at age 60, compared to age 62 for retirement benefits.

Coming to your question, unlike retirement delayed retirement credits, survivors benefits do not continue increasing if you wait past full retirement age. There is no point in waiting past your survivors FRA to start widows benefits through your husbands work record because they will not continue increasing just because you are older. Of course, you can start to receive them earlier, with a reduction, if desired. 

Along with your age, the widow’s amount will depend on your husband’s retirement amount. By waiting until full retirement age, this will be approximately what he had received, with the total reached by adding the increase from the widows to your existing retirement benefit.  

Since applications for SSA survivors benefits are not yet online, make an appointment with Social Security about two months before you want to start them. Do this by calling the national SSA toll-free number 1-800-772-1213 (TTY 1-800-325-0778). You already proved your birthdate for your retirement application but will need to show proof of marriage to your husband now.  

More about Social Security survivors benefits is at www.socialsecurity.gov/pgm/survivors.htm.

 

Does receiving SSA disability reduce future survivors benefits?

Q: If a person receiving Social Security disability since his 50’s dies at age 68, does the fact that he started receiving Social Security long before retirement age reduce the survivors benefits to his widow?

In other words, are survivor benefits less because the deceased received Social Security disability rather than retirement?

A: No. The monthly amount received by the deceased based on his or her work record, not the type of Social Security benefit involved, is the important factor in computing the amount of a survivors benefit.

People eligible for Social Security disability based on their own work record do not have their monthly payment amounts reduced for age.

Anyway, even if the Social Security benefits were originally established based on disability, once a beneficiary attains their retirement full retirement age, his or her disability benefits are transferred to retirement. This is for administrative simplicity, without any change in benefits to the person. At age 68, this man would have been older than his full retirement age.

Always contact Social Security to ask about possible benefits when there is a death in the family.  

More about Social Security survivors benefits is online at http://www.socialsecurity.gov/pgm/survivors.htm.

More about creating your my Social Security account

Q: My daughter tried to create a my Social Security account to see her work record and get family estimates but could not because her address did not match a credit report address shown for her. She moved frequently over the last several years and does not know what address was needed. Can this be fixed?

A: Yes. The Social Security Administration puts lots of effort into protecting the identity and electronic records of our public. Usually these efforts do not create inconvenience but, unfortunately, this time they did. An overview of methods used to verify and protect a person’s identity are in the my Social Security section at www.socialsecurity.gov/myaccount/.

In summary, creating a my Social Security account involves use of routine ID questions from SSA records and several others provided by the Experian credit firm. The credit firm questions are a security feature since the answers are less likely to be known except by the actual person.

Social Security does not keep an address database except for people currently receiving benefits so the address question seen by your daughter would be from the credit firm. As in your daughter’s attempt, online registration cannot be completed if all information provided fails to completely match available records. She can still complete her my Social Security registration by visiting a Social Security office and presenting current photo ID. An appointment is not required.

Having a security freeze or credit alert on your Experian credit report also prevents you from creating a my Social Security account online. In this case you can either temporarily unblock your credit report to create your my Social Security account online, or you can retain the block and visit a Social Security office with photo  ID to have a representative help you.

People not yet receiving Social Security benefits can use their my Social Security account to get their SSA Statement with retirement, survivors and disability estimates and view their earnings record as it is on SSA records. They can also receive information about previously received benefits. Through my Social Security, people receiving a Social Security benefit can request a letter to verify the amount as well as update their address and direct deposit bank information for those benefits.

How many people work while receiving Social Security?

Q: How many people receiving Social Security benefits are also working?

A: The publication Earnings and Employment Data for Workers Covered Under Social Security and Medicare, by State and County, 2011 mentioned earlier this week does not provide information based on whether the worker received Social Security or not, so a specific answer is not readily available. 

Through SSA retirement, survivors and disability programs, plus family benefits in each of those, payments go to people of all ages, many of whom might be working.

 As reported in the Income of the Aged Chartbook, 2012, based on Census Bureau household survey data, in 2012 approximately 28 percent of those aged 65 or older had employment earnings. Not all of those surveyed were receiving Social Security benefits but nearly 90 percent were. 

In the households surveyed, employment greatly varied based on age. Of those in the age 65-69 range, 49.7 percent had earnings. By age 70-74 this dropped to 30.6 percent , then to 19.8 percent for people aged 75-79 and ending at 8.5 percent for those age 80 or older. 

Social Security provides the largest share of aggregate income for units aged 65 or older. Aggregate income for the aged population comes largely from four sources. Social Security accounts for 35.3%, earnings for 33.9%, pensions for 17.1%, and asset income for 10.5%. Only 3.0% comes from other sources.

The Income of the Aged Chartbook, 2012, is on the SSA website at www.ssa.gov/policy/docs/chartbooks/income_aged/2012/index.html

If you work and receive Social Security benefits, other than because of your own disability, the annual retirement test applies if you are younger than full retirement age (FRA). FRA is different for retirement compared to survivors benefits.

 If receiving SSA benefits due to your own disability, report the work to Social Security and ask how it might affect your benefits. Disability work incentives exist to help you return to work.

Benefit payment dates

Q: I recently signed up to receive my Social Security retirement and was surprised to learn that payments would be late in the month. I thought that Social Security benefits were received on the third of the month. Is this a recent change?

A: Not really. With several exceptions, Social Security benefits have been payable at different times during the month since May 1997. Before then, Social Security benefits were received on the third of a month. 

Since then, most people receiving benefits based on their own work record, such as you on your own retirement; have a payment date based on their birthdate. A family member receiving benefits through your record would also have their payment date based on your birthday. A couple can receive Social Security payment on different days if each is receiving their own retirement.

For birthdates from the 1st to 10th of a month, payment is on the second Wednesday, for birthdates from the 11th – 20th, on the third Wednesday, and for later dates on the fourth Wednesday.

If receiving Social Security before May 1997, or if receiving both Social Security and Supplemental Security Income (SSI), the SSA payment date remains the third. SSI payments are usually on the first of a month.

Regular payment dates for both Social Security and Supplemental Security Income (SSI) are advanced if the usual date falls on a day when financial institutions are closed.

The 2014 Social Security schedule of payment dates is here. Social Security payments are paid in the following month so the benefit for May is received in June.  Supplemental Security Income (SSI) payments for a month are received in that month.

 A link to the 2014 calendar is on my Areavoices homepage blogroll.