Posts Tagged ‘Social Security’

Social Security recently announced a cost of living adjustment (COLA), the first since 2009. The 3.6% adjustment is important to more than seniors looking forward to the monthly benefit check because it drives a number of other important benefit levels as well.

In addition to Social Security retirement benefits, the adjustment applies to Social Security Disability Income and directly or indirectly impacts Supplemental Security Income (SSI – the low income supplement for the elderly and poor that is an automatic gateway to Medicaid), veterans’ benefits, Medicare and Medicaid.

The VA’s special monthly pension (housebound, aid and attendance) revisions took effect December 1, 2011. You may view the new Aid and Attendance as well as the Housebound benefits on this website.

As mentioned, above, the FBR (the maximum SSI payment) has been revised, as well as the Federal Poverty Level figures. Those, too, have been posted and will remain available all year for reference.

Medicare premiums, co-payments and deductibles have been adjusted, and those, too, are conveniently posted. Those numbers do not tie into Social Security. One surprise (take a deep breath): Part B premiums actually went down, from $115.40 to $99.90.

Finally, various Medicaid nursing home factors have been adjusted, and are posted as well.

Can Social Security be garnished? Can a debt collector take your Social Security benefits?

The collector from the credit card company just keeps calling. “Look . . . pay these bills of your husband’s or we’ll sue. We’ll get a court order taking part of your Social Security and your bank accounts.”

Can they do that? Not to your Social Security benefits . . . and as for the rest of your bank accounts, it depends. In any event, be careful.

The usual way for a creditor to collect on a debt, short of simply bullying you or shaming you into paying up, is to sue. Once the creditor obtains a judgment for the debt, the usual strategy for collecting is to either garnish a part of income or levy on the bank accounts of the debtor.

What if the debt is just one spouse’s?

Often older couples come to a late marriage with their own debts, and they agree to keep their finances separate. If each spouse truly keeps his or her affairs separate and does not contract a debt along with the other spouse, or in some way guarantees the debt, the nondebtor spouse is not responsible. Usually.

Some states use the old English “Doctrine of Necessaries.” North Carolina is one of them. Under that doctrine, a spouse can be responsible for the debts incurred for goods and services that were necessary for the health or well-being of the debtor spouse. Medical expenses are chief among those.

Social Security Benefits Are Armor-plated . . . Sort Of

Even if the Doctrine of Necessaries applies, though, Social Security benefits rate a high level of protection. Generally, under federal law creditors may not touch Social Security benefits. Two notable exceptions apply. The benefits remain subject to alimony and support payments, and, of course, to federal tax liabilities. But other than those: Hands off!

That’s not the end of the story. It has to be handled right. While Social Security benefits are always exempt from general creditors as they are paid, whether the payments that are not spent and that are deposited into an account remain protected after deposit depends on a number of factors.

If the funds have been commingled with other funds (maybe general savings from company pension plan payments) they’ll lose their protected status.

If the funds are “pure” Social Security payments that have accumulated in an account the funds theoretically are protected. I say “theoretically” because you will need to prove to a bank that there are no other funds at all in the account. That may be difficult. The best time to make that proof is in front of a judge when you or a spouse is getting sued . . . but that doesn’t always happen.

If the issue has you concerned, one of two approaches may work:

• Talk to the bank and ask them ahead of time. Of course, you may feel a bit funny doing that. Stuff like that makes some bankers nervous.

• Change from automatic electronic deposit to an old fashioned paper check, cash the check and keep the funds somewhere safe. Of course, this raises some obvious security concerns . . . but it is an option. If you currently receive electronic deposit, you can switch to paper by going to Social Security online services and making the change (you’ll need to create an online account and get a password). If you don’t want to bother with that, call 800-722-1213.

That’s it! If you are interested in how to get the creditor to “quit bugging you” just comment below and I’ll do a post on that.

Ask anyone with a Social Security disability determination for a quick description of the process and be prepared for something like: Agony. Or glacial. Or maddening.

There may be a glimmer of hope for some. On February 12 the Social Security Administration added to the list of conditions that will be considered under the compassionate allowance program, which is a fast track approach to making disability determinations. Among those conditions is early (young age) onset Alzheimer’s disease. More on that below.

Why This Might Be Important

Social Security disability determinations are important for a number of reasons. As most know, all those years of payroll taxes fund a mandatory federal retirement benefit called Social Security. Work enough, turn 62 or so, stop working and collect retirement benefits. But what of the younger worker who becomes disabled?

Social Security Disability Income benefits are essentially an advance payment of retirement benefits for the younger disabled (former) worker. The extra income is nice, but the added bonus is that two years after Social Security says the disability began the (former) worker also collects Medicare. (Why a two year wait? It’s a mystery.)

Medicare is the mandatory federal health insurance program that normally goes along with the Social Security retirement benefits. That can be a godsend for the disabled individual who is no doubt racking up medical bills and may have no other health insurance (remember, she hasn’t been working a few years).

A Social Security disability determination vicodin prescription online is also important for the younger disabled person who is truly destitute (she can’t work, she’s disabled, and she doesn’t have any significant work history). Supplemental Security Income is a small benefit with all sorts of strings attached. But it has one very important feature: The doors to Medicaid instantly swing open. Medicaid is the federal health insurance program for the poor disabled.

Getting One Is Another Matter!

Getting the determination is another matter and not for the faint hearted. Years of budget cuts and under staffing have taken a toll. Overworked and under trained caseworkers make erroneous decisions and often do not understand what they are doing.

Good administrative law judges (the ones who straighten out the decisions made by the overworked and under trained caseworkers) are overwhelmed. Getting on a judge’s docket can take months . . . up to a year.

A final decision can take years. The process is so complex that lawyers can actually make a living at it . . . why else are all those ads on TV?

Cutting Through The Mess . . . For Some

That is why the compassionate allowance program can make such a difference to someone with a listed condition. Social Security Administration has determined that the conditions shown are easy to prove with a simple records review. Experience has also shown that people suffering from the listed conditions always win . . . eventually . . . a determination.

So, the thinking goes, why not fast track those conditions. Early onset Alzheimers disease is now one of those conditions. A break for those with a heartbreaking condition.

For a full list of the listed conditions go to www.ssa.gov/compassionateallowances. There are 88 conditions listed. Someone lucky (or unlucky) enough to be on the list may be on the way to a speedy determination.