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.

Social Security number as tax ID

Q: When did Social Security numbers start being used for tax ID?

A: President Kennedy signed into law Public Law 87-397 on October 5, 1961. This legislation was designed to cut down on tax cheating by assigning a tax identity number to every taxpayer.

 In 1962, the Internal Revenue Service adopted the Social Security number (SSN) as its official taxpayer identification number. IRS assigns a tax number to people not eligible for a SSN. 

The Tax Reform Act of 1986, signed into law by President Reagan, required that every dependent age 5 or older listed on a tax return had to have his or her own SSN. This new requirement doubled the Social Security number workload the following year. 

Related to this, many children today receive a Social Security number (SSN) as part of their birth registration, a process called Enumeration at Birth. Starting when birth certificate information is provided at the hospital, this voluntary and free process allows the state agency issuing birth certificates to share information about the child with the Social Security Administration. A SSN is then provided to the child and mailed to the parents without any additional paperwork or cost.  

More about Social Security numbers for children is here. General information for obtaining, updating or replacing a SSN card is at www.socialsecurity.gov/ssnumber/. There is no charge for any SSN activity.

 

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.

OASDI by zip code for 2013

During July, I posted information detailing Social Security benefits paid by State and County in 2013 (annual publication OASDI Beneficiaries by State and County (2013)). OASDI is Social Security Old-Age (Retirement), Survivors, and Disability Insurance benefits.

Social Security payment information for 2013 is now available by zip code in the publication OASDI Beneficiaries by State and ZIP Code, 2013.

For individual zip codes, information provided includes the number of beneficiaries by type of Social Security benefit, amount of benefits paid, and the number of beneficiaries age 65 or older.

Why SSI ?

Earlier this week, I wrote about the annual SSI Annual Statistical Report, 2013. Supplemental Security Income (SSI) is a national, needs based, federal assistance program administered by the Social Security Administration (SSA) that provides benefits to low income people at age 65 and over, and for blind or disabled children and adults.

Is SSI part of Social Security? 

Supplemental Security Income (SSI) is very different and separate from the Social Security retirement, disability and survivors programs. It is not Social Security even though administered by the Social Security Administration. Depending on office size, SSA employees often work primarily with either SSI or Social Security.

Since the two programs are separate, there are many differences between them with two major ones related to how each is funded and basics of eligibility. U.S. Treasury general revenues fund SSI while Social Security is funded mainly through designated payroll taxes paid by employees and employers. SSI is an assistance program for the aged or disabled with eligibility based on financial need. Social Security provides retirement, survivors and disability benefits based on individual work.

If a person meets the separate program requirements, he or she could receive both Social Security and Supplemental Security. If not, a person might be eligible for just one or neither.

Why is there a SSI program?

The original Social Security Act of 1935 contained more than just the start of Social Security, which is in Title II of the Act. For example, funding for unemployment compensation is in Title III of the Act.   

Other sections of the Act provided federal funding for state run need-based programs of old-age assistance, aid to dependent children and aid to the blind providing the roots for the future SSI program. Despite substantial federal financing, those were essentially state programs. With only broad federal guidelines, each state was responsible for setting its own standards for determining who would receive assistance and how much they would receive. As a result, eligibility requirements and payment levels differed from state to state. Over the years, the State programs became more complex and inconsistent, with as many as 1,350 administrative agencies involved and payments varying more than 300% from State to State. 

Beginning in the early 1960s, this state-operated, federally assisted welfare system drew criticism from within and outside of government for lack of consistency. To reform this, Congress passed and President Richard Nixon approved the Social Security Amendments of 1972, (Public Law 92-603, enacted October 30, 1972), which federalized the programs and created Supplemental Security Income.  

Supplemental Security Income (SSI) provided for a uniform federal income floor of assistance, and optional state programs could supplement that floor. The new program was historic in that it shifted from the states to the federal government the responsibility for determining who would receive assistance and how much assistance they would receive. 

The Social Security Administration was chosen to administer the new SSI program because of its reputation for successful administration of the existing social insurance programs, its existing network of field offices and large-scale data processing and record-keeping operation. At the time, over 3 million people were converted from State welfare programs to SSI. 

The first Supplemental Security Income payments were issued in January 1974. I was there. 

Information for today’s post is primarily from the Social Security website history section and the Background section of the SSI Annual Statistical Report, 2013 

Learn more about SSI and Social Security retirement, survivors and disability benefits at www.socialsecurity.gov. Click on the homepage “Benefits” tab to select a topic.

SSI Annual Statistical Report, 2013

The SSI Annual Statistical Report, 2013, is now available.

Since 1974, the Supplemental Security Income (SSI) program has guaranteed a minimum level of income for needy aged, blind, or disabled individuals. This annual report presents national data on the SSI program and the people who receive benefits from it. The report covers:

  • ·         federal benefit rates, total annual payments, and total recipients;
  • ·         federally administered payments;
  • ·         recipients of Social Security, SSI, or both;
  • ·         children under age 18;
  • ·         noncitizens;
  • ·         diagnoses of recipients under age 65;
  • ·         recipients who work;
  • ·         applications;
  • ·         awards;
  • ·         outcomes of applications for disability benefits; and
  • ·         suspensions, terminations, and duration of eligibility.

From the report Highlights:

Size and Scope of the Supplemental Security Income Program

  • ·         About 8.4 million people received federally administered payments in December 2013.
  • ·         The average monthly payment in December 2013 was $529.
  • ·         Total payments for the year were almost $54 billion, including more than $3 billion in federally administered state supplementation.

Profile of Recipients

  • ·         The majority were female (53 percent).
  • ·         Sixteen percent were under age 18, 59 percent were aged 18 to 64, and 25 percent were aged 65 or older.
  • ·         Most (86 percent) were eligible on the basis of a disability.
  • ·         Six out of 10 recipients under age 65 were diagnosed with a mental disorder.
  • ·         More than half (58 percent) had no income other than their SSI payment.
  • ·         Thirty-three percent of SSI recipients also received Social Security benefits.
  • ·         Of the people receiving SSI benefits, about 2 percent were residing in a Title XIX institution where Medicaid was paying more than half of the cost.
  • ·         Despite their disabilities, about 312,000 recipients (4.3 percent) were working in December 2013.

More about the SSI program is at www.socialsecurity.gov/disabilityssi/ssi.html. To apply, call the national Social Security toll-free number, 1-800-7723-1213 (TTY 1-800-325-0778) from 7:00am – 7:00pm, standard business days, or contact your local office. 

 

 

 

SSI Recipients by State and County, 2013

Last week I posted information about the annual publication OASDI Beneficiaries by State and County, 2013, containing Social Security beneficiary information to the individual county level.

Newly released is the publication SSI Recipients By State and County, 2013, containing local area data for the Supplemental Security Income (SSI) program.  

Administered by the Social Security Administration, but very different from Social Security, SSI is a cash assistance program providing monthly benefits to low-income aged, blind, or disabled people, including children.

People can receive both Social Security and SSI if the individual program requirements are met. SSI Recipients By State and County, 2013 shows the number of SSI recipient’s also receiving Social Security (OASDI) benefits.

When looking up your state or county information, note that benefit amounts are shown in thousands of dollars.

What SSA widow / widower benefits are not age based?

My preceding post was about Social Security survivors benefits to a widow or widower based on age, payable once the eligible person is at least age 60.

This leads to the question of what widow or widower Social Security survivors benefits are not based on age. There are two, each with its own requirements.

At any age, Social Security survivor benefits might be payable to a widow or widower if a child of the deceased also receives suvivors benefits on that record. The surviving parent must be taking care of the child and the child must be younger than age 16 or disabled.

Since taking care of the eligible child is the reason for payment of benefits, age of the surviving parent does not change the amount payable to the widow or widower. However, their individual benefits for a year can be reduced by employment earnings due to the annual earnings test, just as for a person receiving Social Security retirement. Amounts paid to the widow(er) can potentially lower amounts payable to eligible children. For these reasons, people otherwise eligible for this type of benefit sometimes choose not to receive it, especially if working full-time.

The other is based on disability, with an age requirement. Called disabled widow(er) benefits, these can be paid if the person is at least age 50, but not age 60, and determined to be disabled within a certain period of time. Exceptions exist but usually the disability must have started within seven years of the spouses death.

Not being discussed today, divorced spouses of a worker who dies can receive the same types of survivors benefits as a widow or widower, provided that the marriage lasted 10 years or more and other requirements are met.

Read the booklet “Survivors Benefits” (SSA publication 05-10084) for general information about Social Security survivors benefits.

 

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.

 

 

SSA benefits & child support orders

Q: I now have child support withheld from my wages. If I start receiving Social Security, will the child support be withheld from my retirement?

A: Social Security benefits can be garnished for child support. For this to take place, the child support agency sends Social Security an income withholding order, just as orders are sent to employers. You would have to ask the child support agency if they intend to do this in your case.

Children can potentially receive Social Security benefits through your record when you do. If so, benefits to them would not reduce what you receive. See www.socialsecurity.gov/retire2/yourchildren.htm.

 

On a different topic, the original Social Security Administration Internet site was launched on May 17, 1994. For accurate Social Security information, or to complete an application for benefits, visit it at www.socialsecurity.gov.