Recently on our disability forum a user asked, “I am about to be 65 years old. I have been on Social Security Disability Insurance (SSDI) for several years. I am curious what happens when I reach retirement? Do I get my retirement benefits? Do I get less? What happens to my disability benefits?”
Recently on our disability legal forum a user asked, “I suffered a severe head injury in a bar fight. I have difficulty speaking and my short-term memory is gone. I need to apply for Social Security Disability Insurance (SSDI), but I am overwhelmed by the disability process and need help. Is there someone who can help me, and if so, what tasks can they help me complete?”
Recently on our legal forum a user asked, “I was hit by a drunk driver and severely injured. I am now in a wheel chair and do not have use of my right hand. My doctor said my rehabilitation and injuries will keep me from work for at least one year. I have filed for Social Security Disability Insurance, but I understand that it can take months or years to be approved. I am wondering whether I will receive back pay and what factors will influence the amount I receive?”
SSDI benefits exempt from many creditors, but funding hammered by high, chronic unemployment
We’ve addressed this before, but with the debt-ceiling debate, US credit downgrade and endless political posturing, it’s probably a good time to once again discuss the financial health of Social Security overall and the SSDI and SSI programs in particular.
Experts warn of shortfalls in retirement and disability benefits
As we’ve written before, Social Security itself has been declared to be OK until about 2036; in other words, if nothing changes between now and then, the fund will be able to pay out only about 75 per cent of scheduled payments. Medicare is in slightly worse shape, but SSDI (Social Security Disability Insurance) will be busted sometime between 2015 to 2018.
SSDI could run dry as early as 2015
According to long Wall Street Journal piece on SSDI payments increasing in Puerto Rico (but also instructive for its good info on the SSDI national status), “The SSDI is set to soon become the first big federal benefit program to run out of cash—and one of the main reasons is U.S. states and territories have a large say in who qualifies for the federally funded program. Without changes, the Social Security retirement fund can survive intact through about 2040 and Medicare through 2029. The disability fund, however, will run dry in four to seven years without federal intervention, government auditors say.”
Applications have risen along with increased unemployment
According to an Aug. 22 account at Politico.com:
The Social Security disability fund is fast running out of money and may not be able to make payments starting in 2017, thanks in part to the bad economy driving claims up over the past decade, The Associated Press reported.
Applications for benefit claims have risen almost 50 percent in the past 10 years, as many people with disabilities are laid off and cannot find new jobs in the difficult job market. And, the AP added, the rush for benefits is causing a major backup for applicants currently waiting to get their cases decided.
The Congressional Budget Office estimates the disability trust fund will be exhausted by 2017 unless Congress acts. If the fund’s balance falls to zero, it cannot pay out full benefits unless the law is altered. And it’s not the only benefit fund that’s nearly insolvent: In 2040, the CBO projects, Social Security’s retirement fund will also be out of cash.
So, the exact years are in question, but the timeframes are roughly equivalent.
One concern: the ‘multiplier effect’
And it’s not only the SSDI direct benefits that add to the bill. From the NYT’s piece, which gives a dollar figure of benefits in Puerto Rico as averaging a “modest” $1,064 a month:
But the program opens up access for recipients to other government programs, multiplying the ultimate cost to taxpayers.
Anyone who spends two years on SSDI qualifies for the Medicare health program, which usually is available only for those 65 years old and older. SSDI recipients tend to remain tethered to the program for years, and the government’s lifetime financial commitment averages $300,000 per person, estimates David Autor, an SSDI expert who teaches at the Massachusetts Institute of Technology. “The system has profound problems,” Mr. Autor said.
SSDI’s financial woes pose a major test for the White House and Congress, which have been reluctant to tackle the budget-busting costs of entitlements.
Analysts who track the program say the only short-term way to save it without raising taxes would be to fold it into the fund that pays Social Security. That would likely force retirees to face benefit cuts two or three years sooner than they otherwise would have done, because SSDI costs would diminish retirement funds.
SS & SSDI fundings have been combined before
Various sources agree that Social Security (retirement) and SSDI (disability payments) were, in fact, temporarily combined in 1994, as a stopgap, emergency measure. What I’ve not understood, yet–although I do get it about the “multipliers–is how can payroll-funded benefits be such a problem?
In other words, if unemployment is the prime factor, i.e. joblessness strains the system via reduced payroll-tax contributions, then why doesn’t the system seem to care more about unemployment?
Weeding out beneficiaries who ‘sneak back to work’
SSI is not funded by payroll deductions but by the general revenue fund. In other words, a work history is not required to qualify. However, it is much more restrictive. According to the AP, a chronic problem–which we’ve reported about–is lack of review that would spot beneficiaries who have gotten work but kept taking benefits:
Today, about 13.6 million people receive disability benefits through Social Security or Supplemental Security Income. Social Security is for people with substantial work histories, and monthly disability payments average $927. Supplemental Security Income does not require a work history but it has strict limits on income and assets. Monthly SSI payments average $500.
As policymakers work to improve the disability system, they are faced with two major issues: Legitimate applicants often have to wait years to get benefits while many others get payments they don’t deserve.
Last year, Social Security detected $1.4 billion in overpayments to disability beneficiaries, mostly to people who got jobs and no longer qualified, according to a recent report by the Government Accountability Office, the investigative arm of Congress.
Delays can leave unpaid bills piled high
Another concern, according this piece at credit.com, is the delay and lag-time in receiving benefits. As mentioned, the influx of applicants from the unemployed adds to the delay. So what shape are beneficiaries in when they finally begin receiving payments?
For many recipients, Social Security Disability Income (SSDI) and/or Supplemental Security Income (SSI) are their financial lifeline. Their more immediate concern may not be what happens in Washington to save the program, but what happens today to the money they receive. I couldn’t find any statistics about how many SSDI and SSI recipients have past-due bills, but if our email is any indication, plenty of them are struggling and getting calls from creditors or debt collectors threatening to take the little income they do get each month. And because it takes so long to get approved for disability these days, applicants may find themselves already in the hole by the time they start receiving benefits.
Benefits not shielded from child support, taxes or student loans
However, there’s a bright spot in that few creditors can successfully come after these benefits. Again from credit.com: “For those who rely on these benefits, the good news is that they are generally protected from creditors and debt collectors. However there are exceptions in the case of past-due child support, past-due taxes, and federal student loans. “ ‘They can chase you (for student loans) to the grave,’ warns bankruptcy attorney Cathy Moran.”
Free evaluation available
Just remember, we can help connect you with a compatible, trained attorney who can help you with your case–if nothing else, it’s possible that an experienced attorney might be able to steer your case toward a more reasonable outcome.
Help is available whether you’re fighting denied or delayed benefits or whether creditors are threatening to attach benefits you’ve already received. Consider signing up for your free evaluation today.
[Editor’s note: This is a follow-up to Colorado ‘medi-pot’ issue splits SSDI from SSI; New Jersey voters nix mixing jobless, disability funds.]
By Mike Hinshaw
Beneath an eye-jangling, alarmist headline–Disabled Workers of the World Unite!–follows a Nov. 3 article from Hollywood Today that sheds light on a problem discussed very little outside its own industry. Probably more people are aware of health problems faced by professional athletes who played in eras before the current era of huge contracts and bonuses.
David Robb writes:
It’s hard enough being disabled in Hollywood. A veteran TV writer, crippled by a major stroke, can’t get his fingers to type out a simple sentence. A well-known director, suffering from Alzheimer’s, is relegated to watching his old movies on TV, not recognizing any of the once-familiar faces. A former stuntwoman, crippled by arthritis, can barely make it to the kitchen without the aid of a walker.
Making matters worse, each is being robbed of a portion of their hard-earned residuals — and few people even know about it; fewer still even care. Disabled actors, stunt performers, writers and directors who are receiving Social Security Disability insurance [SSDI] are entitled to a tax break that very few of them are receiving. In fact, most of their accountants don’t even seem to know it exists.
An overlooked exemption
Robb says the tax break comes in the form of an exemption that applies to disabled workers who are entitled to SSDI benefits do not have to pay taxes on Social Security or Medicare for earnings “if the worker did not perform any service for employer during period for which payment is made.” He cites the supporting document as “page 32 of the Internal Revenue Service’s ‘Employer’s Tax Guide’ (Circular E) – Rule 15.” The .pdf file itself is not hard to find, but you can’t do an easy internal search on the wording; you have to find page 32, then scroll to the seventh row of the table on that page.
Now, conceivably, this could apply to other-than-Hollywood types–for instance, authors or others who receive royalties or other employment-related earnings in years other than the original years worked. But, from Hollywood Today’s perspective, it specifically applies to actors, stunt personnel, and so forth who get receive residuals in years following those when the original work was performed.
In any given year, the effect on residuals from a specific project (movie or TV show) may not add up to much.
Residuals can add up through the years
He gives the example of “former stuntwoman Jeannie Coulter, who has been receiving Social Security Disability insurance for nearly 25 years, and she told me that on the very day we spoke, she received a $150 residuals check from NBC/Universal that had $9.30 deducted for Social Security tax and $2.17 deducted for Medicare tax. That’s $11.47 that was deducted from a single residuals check that shouldn’t have been withheld.”
And as Robb points out, this potentially affects a huge number of folks, including actors, writers, stunt performers, directors, and so on. He says hundreds, but when you think all the movies, all the TV shows–maybe even radio shows–and all the people who are entitled to their residuals, well, I’m no industry expert but it seems no stretch to say that thousands of former bit players and even aging former stars might be getting shortchanged in their twilight years.
Here’s how residuals–and the tax benefit–can add up, cumulatively, continuing with the example of merely one, top-tier stuntwoman:
Coulter, who was once one of Hollywood’s top stuntwomen, worked on hundreds of TV shows, including numerous episodes of “Charlie’s Angels.” And every time one of her shows is re-run on TV, she gets a residuals check. And every time she gets a residuals check, she’s improperly docked for Social Security and Medicare taxes.
Last year, $211 was deducted from her residuals checks for Social Security and $49 for Medicare. In 2008, $251 was deducted for Social Security and $58 for Medicare. In 2007, $362 was deducted for Social Security and $85 for Medicare. That’s over $1,000 in taxes that she paid but wasn’t supposed to over the last three years – and this has been going on for the last 25 years. For Jeannie alone, the overpayment of taxes in the last 25 years comes to more than $8,000.
It may seem frivolous, but who knows exactly how big the problem is? For instance, let’s postulate only 50 former show-biz people getting shorted eight grand each. That’s $400,000 they might use to band together and help each other. It’s certainly worth some authority looking into.
Now, on to another topic.
The high costs of paperwork
This is something that affects almost anybody with a legal situation, but perhaps most affects those with a disability claim.
Namely: paperwork and keeping records.
From an October post at The Injury Board’s “BlogNetwork”, we see this: “One expense that is encountered in nearly every Social Security Disability claim (“SSDI”) is the cost of getting, copying and then filing medical records to support the case. The charges seem to vary widely from medical provider to medical care provider even if the claimants have the same spine, back or brain injury or other disabling medical condition. The question we get from clients and their families is, ‘How much doctors can charge for medical records in disability claims ?’
Now, that, is an excellent question.
And that’s where we continue, next time. Please stay tuned.
Another benefit of receiving Supplemental Security Income (SSI) is that you may qualify to receive Medicaid. It is important to remember that Medicare and Medicaid are not the same thing. Medicaid is a federally-funded, state-run program that provides medical assistance for individuals and families with limited incomes and resources. Medicaid pays for your health care costs, including doctor’s visits and eye care.
If you receive Supplemental Security Income (SSI) and you get Medicare, your state may pay your Medicare premiums if you have low income and few resources. In some cases, your state may also pay Medicare expenses like deductibles and coinsurance.
Only your state will know if you are qualified. Your state or local welfare office or Medicaid agency can tell you whether you are qualified to receive these benefits.
You also may be able to get extra help paying for the annual deductibles, monthly premiums and prescription co-payments related to the Medicare prescription drug program (Part D). You may qualify for extra help if you have limited income (tied to the federal poverty level) and limited resources. These income and resource limits change each year and are not the same as the SSI income and resource limits. You can contact Social Security for the current numbers.
If you have both Medicaid with prescription drug coverage and Medicare, Medicare and SSI, or if your state pays for your Medicare premiums, you automatically will get this extra help. You will not need to apply for it.
As you can see, there is a worthwhile monthly cash benefit that you will receive if you qualify for Supplemental Security Income (SSI). In addition, there are the additional benefits listed above that you may qualify for because you are receiving Supplemental Security Income (SSI). It is certainly worth the time and effort to apply for SSI.
You may have applied and been denied for Supplemental Security Income (SSI). What can you do now? What options are open to you?
If you decide to appeal the denial by the Social Security Administration, you are probably going to need the help and advice of a good disability attorney. People who have an experienced disability lawyer are approved more often than those without an attorney.
SocialSecurityHome.com is the Web site where you can get in touch with a disability lawyer who can help you get the Supplemental Security Income (SSI) benefits that you are entitled to.
Appealing the denial by the Social Security Administration can be a long and trying process. The disability attorney at SocialSecurityHome.com can counsel and assist you in your efforts to win your claim.
Do not put this off. Do not wait or delay. This is something that is vitally important to you and your future. Contact the disability lawyer at SocialSecurityHome.com, today.