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Social Security FAQ

What is the value of Social Security disability or retirement to me?

For the average retiree, it is the biggest accumulation of wealth you will make in your life.  It is one half of the income for two thirds of the country in retirement with average monthly income of $1045 in 2007.  To get that type of retirement, you would have to pay an insurance company about $225,000 over time.  It would be the equivalent of a $414,000 retirement insurance policy bought in 2006.  The best part for you is your employer matches what you pay in each payday.  These are huge numbers for the average person.  If you have a chance to opt out of Social Security to avoid the payout, don't.  Read more about it in the true worth of Social Security.

How Do I know what Social Security programs I am eligible for?

The first way you can find out is to request a Social Security Statement. 

Since, the law requires Social Security to send an annual Social Security Statement to almost all working Americans 25 years and older who are not yet receiving benefits.  It is normally sent about three months before their birthday. You can also request a Social Security Statement right now, and they are required to send it to you.

This four-page document that comes to your home in the mail can be an important financial planning tool for you and your family's financial future if you take the time to understand and use it. It provides estimates of retirement, disability and survivors benefits that you would get if you became eligible for disability or retirement. Those estimates are based on you continuing to make the same amount of money each year and the same amounts were deducted from your paycheck for Social Security payroll tax.

Very important:  If you stop working now, your benefit entitlements start to go down.  Don't think of those benefits on your statement as money in the bank.  You have to keep contributing until you are found to be disabled or can retire at 62 years of age or older.  The longer you work past 62, the higher the monthly benefits.

Most financial planners say a you will need 70 to 80 percent of your pre-retirement income to live comfortably in retirement. Social Security benefits, however, only replace about 40 percent of your pre-retirement income. The rest is up to you. It must come from other sources, including your savings, investments and pensions.

It is sobering to look at your statement.  Seeing your estimated future income numbers in black and white on these statements should help you wake up and make changes in your savings and investment habits.  Don't forget about inflation.  Just remember what you could buy 10 years ago that now costs twice as much.

When you get your statement, review your reported earnings and other important information such as your name and date of birth to be sure they are correct. Mistakes could keep you from getting all the Social Security benefits you have earned. The sooner you identify mistakes, the easier it will be to correct them.

These statements also detail all the protections you are eligible for when Social Security tax is deducted from your paycheck. Many people think of Social Security only as a retirement program. Social Security also provides valuable protection in case you become disabled or die before you reach retirement age.

The second way to find out what benefits you are eligible for is to go to the Social Security website.

Social Security has an  Eligibility Benefit Screening Tool  that can be used to find out if you could be eligible for benefits from any of the programs Social Security administers. This tool will give you eligibility information based on your answers to a series of questions. It is not, however, an application for benefits

How do I get a new Social Security card?

If you have lost your Social Security card you can apply for a replacement at the nearest SS Office.  Their numbers are listed not far below.  But even that might not be necessary if you know your number. You can get an application and find out how to replace a lost or stolen Social Security card by clicking on this link: New Social Security Card 

You will need proper ID when getting a replacement card.  You can find out what ID you need here: ID needed for for SS Cards

To avoid losing or someone stealing your card, you should keep your Social Security card in a safe place with your other important papers. Do not carry it with you unless you need to show it to an employer or service provider.

How much of my annual earnings are subject to the Social Security payroll tax?

The Social Security Act was signed into law by President Franklin D. Roosevelt on Aug. 14, 1935. Social Security taxes were collected for the first time in January 1937 at a rate of 1 percent of wages up to $3,000--Thats one cent tax for each dollar of wages. The taxes stopped when the worker earned more than $3000 for that year. Social Security actually started making regular ongoing monthly benefits five years later in January 1940. The tax rate and amount of wages that are taxed in one year gradually went up over the years. In 1989, the tax rate jumped from 7.51 percent to the current rate of 7.65 percent.  The Social Security program was expanded over the years to include disability insurance (SSDI), hospital insurance (Medicare), and old-age and survivors insurance (Retirement).

In 2008, the maximum earnings taxable is $102,000. That means workers must pay Social Security tax of 7.65 cents on each dollar of wages earned on the first $102,000 of earnings for the year; any wages above that amount are not subject to Social Security taxes. However, there is not a limit for Medicare tax. A taxpayer's total annual wages are subject to Medicare tax. Since most of us don't make $102,000 a year, Social Security and Medicare will be taken out of every check we get.  Your employer matches those contributions each payroll.

Who is Eligible for Social Security Disability Benefits?

When a person works, a percentage of their wages are paid into the Social Security fund. Most people know that this money provides retirement benefits for them when they reach retirement age. This money also provides disability insurance coverage. In most cases you must have worked five out of the ten years immediately before you became disabled in order to be fully insured for disability benefits. Once you are covered by Social Security disability insurance you may be eligible to draw a monthly check and for Medicare if you become unable to work because of a physical or mental impairment.

If you have not worked long enough to be covered for Social Security disability, there is a program called Supplemental Security Income (SSI). This program provides a small monthly disability benefits and Medicaid health insurance for people who have not worked or have not worked long enough to be covered by Social Security disability. In order to qualify for SSI you must be disabled and your household income and resources must fall below certain limits.

However, the legalization of same-sex marriages in some states, such as occurred in Massachusetts in 2004, will not enable same-sex partners to receive spousal retirement benefits under private pension plans, Federal employee pension plans or Social Security.

There are other technical requirements sometimes that are applicable to individual cases. Call us now at the Law Offices of Ed Goldner at 866-654-7772 or 210-775-2836 or drop an email off to me at ed@edgoldner.com to find out if you qualify.

What are the business hours for the San Antonio Social Security Offices?

Social Security offices in the San Antonio area have the following hours: 9 a.m. - 4 p.m., Monday, Tuesday, Thursday and Friday.  Offices are closed to the public on Wednesdays.

Where are the Social Security Offices in San Antonio and surrounding area?

8020 ALAMO DOWNS PARKWAY
SAN ANTONIO, TEXAS 78238
(210) 257-4000
(210) 257-4020 FAX

3438 E. SOUTHCROSS
SAN ANTONIO, TEXAS 78223
(210) 534-5443
(210) 534-5927 FAX

727 E DURANGO RM 701 7TH FLOOR
SAN ANTONIO, TEXAS 78206
(210) 472-4400(210) 472-6480 FAX

927 S STATE HWY 123 BYPASS
SEGUIN, TEXAS 78155
(830) 379-8802
(830) 372-9928 FAX

8208 NE LENTZ PKWY.
VICTORIA, TEXAS 77904
(361) 575-8254

SAN ANTONIO HEARING OFFICE -OFFICE OF DECISIONS AND APPEALS REVIEW (ODAR)

4204 WOODCOCK DR. STE.100
SAN ANTONIO, TEXAS 78229
(210) 731-3301
(210) 731-3325 FAX 

Is there a place on the Internet I can bookmark to keep up with the latest in San Antonio Personal Injury and U.S. Social Security News?

Take a look at the pages on the bookmarks below.  You will find all the latest news.  If you like it, once there, just bookmark the site.  It is updated whenever new news comes out.

Social Security News You Can Use

Personal Injury News You Can Use

It is taking years to get my disability claim approved and I now have to file bankruptcy.  How does my bankruptcy apply to my disability claim?

If you file for bankruptcy, you should notify your Bankruptcy lawyer of your Social Security Claim and tell Social Security of your bankruptcy immediately.  The bankruptcy Judge will want your disability back pay to help pay your debts.  If you are represented in your disability claim, Social Security cannot pay your representative until the Bankruptcy court gives instructions on what they can pay. If Social Security did pay your representative in error, the money would have to be returned.

How Do I Document or "Prove" my Social Security Disability Claim?

You have to document your claim to win.  This includes making sure the decision makers at SSA have all the information in their possession when they decide your fate. 

How Can I avoid Social Security from reducing my back pay and future monthly payments by as much as 1/3 if I win SSI benefits?

As of 2008, in Texas the maximum amount you can receive in SSI benefits is $637 a month for an individual and $956 for a couple. That amount can be reduced for a number of reasons, one of them is when someone else, besides your spouse pays for your living expenses.That means your parents, your children, your friend, or anyone else. When this happens, Social Security will reduce your back benefits and future monthly payments by as much as 1/3.

When Does This Apply To You?

You are only applying Social Security Income (SSI) benefits.

Someone else besides your spouse is paying your rent, food, and/or other living expenses.

If you were actually receiving SSI benefits, you could afford to pay your fair share of the food, rent, or other living expenses.

When Does This NOT Apply To You?

Your spouse and children are the only people living with you and all your expenses are paid by them.

Everyone in your household receives some sort of public assistance.

You purchase your own food and make contributions to the household expenses.

How Can You Legally Avoid Losing 1/3 of your SSI Back Pay?

Make a written a loan agreement with the person who is supporting you to pay living expenses back after you get SSI Social Security disability. In return for your payments after you get SSI, they promise to "lend" you the money now used to pay for your food, rent, or other living expenses. Because you have a written agreement to repay this debt, Social Security will not reduce your benefits for the support.

That being said, it must be a real agreement, enforceable under Texas State law. You will actually owe the person back the money. Both you and the person paying your expenses have to sign the loan agreement and it must have a realistic repayment schedule for you. For example, the loan agreement may state that you will repay your loan at $100 per month until a certain date. That is feasible because $100 will only be part of your total SSI payments each month. If the agreement says you will repay your loan at $500 per month, but your benefits are only $400 then it wont be accepted by Social Security because its not feasible.

This loan agreement only counts for SSI back pay or future monthly payments awarded after the date of loan agreement. You cant make a loan agreement when you are awarded benefits and expect SSA to apply it to the total time you are eligible for disability.  So, if you want to maximize your SSI back pay and monthly payments using this method, its important to get that loan agreement in writing as soon as possible.

To Recap, if you answer "Yes" to all these questions, you need to call us ASAP so we can help you:

  • I am applying for SSI only
  • I am living with someone other than my spouse who is paying my rent, food, and other living expenses
  • If I got SSI, I could pay my fair share of those expenses
  • I want to maximize what I legally can get for my SSI
  • I am willing to pay back my fair share of living expenses to that person

How Will My Lawyer Inform Me About My Case?

We keep you informed whenever there is anything important happening because we understand the importance of open communication between client and lawyer.  While we would like to call you every week, this is usually not practical. Sometimes we are just waiting for the other side to respond or act and their deadline has not run. Other times, the large workload of the other side makes a case slow going-We have to wait in line. 

If you believe you are having problems with your lawyer, there are things you can do to resolve your lawyer problems.

That being said, one of the most important things you can do is to tell us if you have changed your phone numbers or address. Often we get notified of short-notice deadlines and we need to get in touch with you immediately. If we have a bad address or phone number, or if you do not respond to our calls and letters, your case can be severely damaged.

In the end, it is our job to pursue your case and we take that seriously. When important developments occur, we will call you immediately.

Find out more about the Lawyers at the Law Offices of Ed Goldner.

What Types of Experts Can I expect at my Social Security hearing?

Depending on your claim and your judge, you may be facing a medical expert and/or a vocational expert at your hearing.

An Administrative Law Judge (ALJ) may get evidence at your hearing from a medical expert, either by interrogatories (written questions) or in person at the hearing. If the ALJ chooses interrogatories the law requires that you get a copy the ALJs proposed Interrogatories. Since live testimony is always preferred, you should consider requesting a subpoena for the author of the interrogatories if they prove to be non-responsive or incomplete. The request must be in writing and filed at least five days before the hearing date.

An ALJ may decide that a consultative examination (CE) is necessary. That is where you are given an appointment to go see a government hired medical expert for a medical examination. If so, the law states that the ALJ should not usually specify a particular physician or psychologist to conduct a C.E. or test. Because the Social Security Administration (SSA) considers a claimants treating physician(s) to be the primary source of medical information about a claimants impairment, the State Agency supporting the SSA (DDS) will, if possible, select a treating source that is qualified, equipped, and willing to perform the C.E. or test for the amount allowed under their Government fee payment schedule.

If an ALJ requests a State Agency (In Texas DDS) to use or not use a particular treating or non-treating physician or psychologist to conduct a CE or test, the ALJ must provide the physicians or psychologists name, address, and telephone number, and explain the reason(s) for the special request; and place a copy of the special request in your file at SSA.   

Federal Rules require the doctor to set aside at least 30 minutes for a CE examination.  In a recent survey half of the people interviewed said their examination was less than 20 minutes. If this happens to you, tell your lawyer.

Often medical experts are paid by the Government to testify at your hearing. If the medical expert testifies against you, will you be prepared to question him or her about the factual or medical basis for their opinion? Your benefits for disability are at stake and you should hire a lawyer to do this work for which he has been specifically trained, licensed and which he or she has become an expert.

Vocational experts (VEs) are used by Administrative Law Judges (ALJs) to determine if your diagnosed disabilities adversely affect your ability to work. An ALJ may rely on a VEs testimony in the form of a hypothetical. Basically, the facts of your diagnosed disabilities and how they affect your ability to work is put into a hypothetical situation by the ALJ and the vocational expert gives an opinion as to whether you can work or not if all those facts are true. Vocational experts are used regularly where you have claimed a mental impairment.

Reliance on this hypothetical opinion is proper only if the hypothetical posed to the vocational expert comprehensively describes your impairments. The vocational experts response to a hypothetical question that does not include each of the limitations that are medically established cannot constitute substantial evidence to support the ALJs decision of disability or no disability. Where the vocational expert has been insufficiently questioned, the experts testimony is insufficient to support a finding against you.

If all of this sounds difficult to you, make sure you have an attorney to represent you. An attorney, like the experts at the Law Offices of Ed Goldner are trained and licensed to develop your case and cross examine these experts at hearings. It will take you well over a year and a half to get to your hearing setting. This is your best shot to win because you are there with expert help to fight for you. Don't walk into a hearing with an attorney ALJ, vocational export and/or medical expert ready to testify without an attorney to go after them in your best interests.

My relative has just won Social Security disability benefits, but he has a mental disability and can't manage his lump sum for back pay or future payments. Is there some way to protect and manage his Social Security Disability Checks?

Absolutely. Instituted and monitored by the Social Security Administration (SSA), the Representative Payee Program is a system that provides financial supervision for individuals who are unable to manage their own Social Security benefits due to a physical or mental disability.

For a variety of reasons and conditions, the SSA may require some beneficiaries to appoint another qualified person to receive and manage their Social Security disability insurance and/or supplemental Social Security benefits. This person is called a representative payee.

A representative payee is someone appointed by the beneficiary and approved by the SSA to receive his or her Social security checks and deposit them into a bank account established solely for beneficiary support. The representative payee then disburses those funds to pay the beneficiaries bills and to ensure that the beneficiary's essential needs are met.

The more common options of guardianship or conservatorship can place all decisions into the hands of the guardian. Representative payee-ship addresses financial control only, leaving all other choices intact.

I just got a big check from Social Security for my disability benefits and I am sure it is too much.  I sure need this money.  Do I have to pay it back?

Yes, normally.  However, you can apply for a waiver of the overpayment from Social Security but they do not have to grant it.  Here is where you can start:  Waiver of Overpayment.  More importantly, Social Security believes it is never too late to demand money back from those on benefits.  Recently, SSA demanded over $600 back from a disabled orphan that they overpaid more than 30 years ago.  Read the full story at: Disabled Orphan

I get money from Individual Retirement Account (IRA) each year.  Will my IRA income reduce my Social Security benefits?

No. In calculating your retirement benefits, Social Security counts only the wages you earn from a job or your net profit if you're self-employed.  Non-work income such as pensions, annuities, investment income, interest and capital gains are not counted and will not affect your Social Security benefits.

I have been getting Social Security benefits for several years. I'm still not able to work but I am worrying that they may stop some day. Is there a time limit on disability benefits?

No, there is no time limit on receiving Social Security or Supplemental Security Income disability benefits. Your benefits will continue as long as you have a disabling condition that has not improved and that makes you unable to work. From time to time, Social Security will review your case to make sure you still have a disability severe enough to qualify for benefits. If they find you are no longer qualified for benefits, Social Security will notify you by mail and you will have 60 days to appeal.

I already am getting disability benefits.  Can I try to go back to work and keep them?

In most cases, yes!  However you have to understand the rules and as always, make timely and truthful reports to SSA.

The Social Security disability program has special rules called ''Work incentives'' that allow you to keep your monthly disability benefits coming and continue your Medicare or Medicaid coverage while you are attempting to return to work.  They will even help you find a job! This makes sense when you think about it. The program should give you an incentive to return to work if you can, but not penalize you if you try and cant make it.

As a disabled person returning to the work force your are protected by what is called a ''trial work period.''  The initial trial work period will last until you have worked nine months in a 60 month period.  Even after that it can be extended as long as 36 months after that.  As long as you apply to Social Security for the program before you start working, report your work activity to them, and you continue to have a disabling condition, your full Social Security benefit will be paid during your "Trial work period."

If you fail to keep your job, report it to Social Security. Again, your benefits wont be affected. However, if you continue to work, after the trial work period ends, your benefits will stop if you make what is called ''Substantial Gainful Activity'' or SGA. For Social Security purposes, SGA in 2007 is $900 a month. In 2008 SGA is raised to $940 a month.

You can learn how to apply by going to their website by clicking here: Ticket to Work

I adopted a child who receives Social Security survivor benefits because their parent died several years ago.  Is he going to lose his Social Security Survivor benefits?

No. Adoption of a child already entitled to survivor's benefits does not terminate the child's benefits.  When a child who is receiving benefits is adopted, Social Security must be notified of the child's new name, the date of the adoption decree and the adopting parent's name and address.

I have Medicare.  Can you tell me about my prescription plan benefit?

Beginning January 2008 many prescription plans under part D of Medicare raised their premiums and co-payments.  Some will lower their charges and expand their list of drugs to include more Generic drugs to help those who fall in that Dough nut hole.  However, in the most far-reaching change starting January, most brand name prescription drugs vanished from the list of covered drugs for credit to get the patient to the other side of the dough nut hole.  This has probably effect people with moderate to high prescription drug costs first.

Our advice:  Look carefully at your prescription plan to see how it affects you.  Change if you need to.  Also, look read our web page under our Frequently Asked Questions FAQ to learn about the Medicare, the "Dough nut hole," and where you can find help to get you through it.  You can also read the very helpful AARP Article about these important changes here:  Dough nut Hole gets Larger

You will be automatically be enrolled in a prescription drug plan if you do not enroll in one on your own. The Centers for Medicare & Medicaid Services (CMS) will send you a letter that will tell you which plan you have been enrolled in and how to change plans.

However, you could lose months of benefits, and you might not get the plan that is best for you if you wait to be automatically enrolled. To learn more about Medicare part D prescription drug coverage, go to medicare.gov. To learn more about the extra help available through Social Security, go to www.socialsecurity.gov.

Are Social Security disability benefits taxable?

Yes. Both monthly SSDI benefits and lump-sum retroactive payments of SSDI benefits are subject to federal income tax. The state tax treatment of SSDI benefits varies, but Texas does not tax SSDI benefits.

General SSDI benefits. As with all Social Security benefits, up to 50 percent of SSDI benefits are potentially subject to tax each year. To determine this, an individual adds up half his SSDI benefits plus all his other income sources, including taxable pensions, wages, interest, dividends, etc., as well as tax-exempt interest income. Married individuals filing jointly will have to pay taxes on a portion of their SSDI proceeds if their total exceeds a base amount, which for 2007 is $32,000. Most other filers will have to pay taxes on proceeds that exceed a base amount of $25,000.

However, as much as 85 percent of SSDI benefits can be taxed if the total of one-half of a person's benefits and all her other income for 2007 exceeded $34,000 as a single filer or $44,000 for those who are married filing jointly.

Lump-sum SSDI benefits.  If it took 42 months to receive your award, you could receive a lump-sum payment of more than $40,000. That's taxable income and you need to do something about it.  Fortunately, you can spread that income out over the previous tax years that you were waiting for an award.  And, you can do that when you file your tax return in the year you receive the back pay award--You don't have to file any amended returns for previous years.  However, because the calculations required to figure this out on your return are extremely difficult, we highly recommend you use a tax professional to prepare your taxes in the year you receive your back pay.

What credits and deductions are available to lower my tax bill?

If you received disability payments through your employer's long term disability insurance policy and had to repay the insurance company for those payments, you can take an itemized deduction for all or part of the repayments.

Credit for the disabled. This credit is available if you receive taxable disability income and have a 2007 adjusted gross income under: $17,500 for single filers; $20,000 if filing jointly and only one spouse is eligible for the credit; and $25,000 if filing jointly and both spouses are eligible.

Representation cost. You can deduct the expenses you paid your lawyer in your disability representation. 

Dependent care credit. If you pay someone to care for your dependent or spouse who is not physically or mentally able to take care of herself, you may be able to receive a credit of up to 35 percent of the care provided while you were working or looking for work. The amount of the credit decreases as earnings go up, but a minimum credit of 20 percent is available to those with adjusted gross earnings over $43,000.

Earned income tax credit (EITC). This is a refundable credit, which means that if the credit amount is higher than an your tax bill, you can get the unused portion of the credit back as part of a tax refund. To be eligible, a you had to have been employed for at least part of 2007, earned below $12,590 to $39,783 (depending upon your filing status and the number of children you claim), and had maximum investment income of $2,900.  If you qualify for the EITC, you can realize a credit ranging from a few dollars to more than $4,700, depending on your income and family size.

The IRS estimates that approximately one in four eligible taxpayers failed to claim the EITC, mainly because they are unaware it exists.

Saver's credit.  If you are struggling with the financial hardships caused by a permanent disability, putting away money for retirement may seem impossible. But you may qualify for a nice tax break for half of the first $2,000 ($4,000 for couples) saved in a retirement account.   For 2007, the maximum income thresholds for this credit are incomes below $26,000 for single filers and $52,000 for couples filing jointly.

Medical deductions. If you itemize you tax return you can deduct medical costs from your income tax so long as the expenses equal more than 7.5 percent of your adjusted gross income.

Deductible expenses include medical and dental costs for the taxpayer, their spouse and dependents, travel expenses to and from treatments, premiums for long-term care insurance payments, laser vision surgery, prosthetics, eyeglasses and hearing aids, costs for certain special equipment for the visually and hearing impaired, the cost and maintenance of a wheelchair and the cost and care of a guide dog for a person with a physical disability. Additionally, improvements to a home, such as constructing entrance ramps, can be deducted if their main purpose relates to medical care or accommodating a home for an individual's medical condition.

Additionally, individuals who are blind may be entitled to a higher standard deduction on their tax return.

I get military retirement.  Will that affect my Social Security benefits?

No. You can get both Social Security benefits and military retirement.  Generally, there is no offset of Social Security benefits because of your military retirement.  You will get full benefits. The only way your Social Security benefit may be reduced is if you also receive a government pension based on a job in which you did not pay Social Security taxes.

I am retired and the only income I have is a monthly withdrawal from an Individual Retirement Account (IRA).  Are the IRA withdrawals "earnings?" Could they reduce my monthly Social Security benefits?

No.  Social Security counts only the wages you earn from a job or your net profit if you're self-employed.  Non-work income such as annuities, investment income, interest, capital gains and other government benefits are not counted and will not affect your Social Security benefits.  Most pensions will not affect your benefits. However, your benefit may be affected by government pensions earned through work on which you did not pay Social Security tax.

If all I received was SSDI benefits, am I eligible for the 2008 Federal tax rebate program?

Generally, yes. But in order to receive a rebate, you must file a tax return - even if you owe no taxes. Starting in May, the program will pay rebates to individuals with at least $3,000 in qualifying income, which includes income from a job, self-employment, Social Security benefits such as SSDI and veterans-disability payments. The rebate is $300 for qualifying single individuals receiving just Social Security or veterans-disability benefits and $600 for married couples.

However, the rebate amount could be more for a couple where one individual is also working (up to a $1,200 rebate) or where a single person with a disability had earned other income (up to a $600 rebate). Also, anyone getting a rebate may be eligible to get an extra $300 for each of their children under 17.

Just because you have to file a tax return to get the rebate, it does not mean you'll have to pay any taxes. It just provides the IRS with the information it needs to issue your rebate, like your name, Social Security number, mailing address and 2007 income.

I am getting workers comp and it offsets my Social Security benefits. What are the tax consequences?

In Texas, there is no income tax (we pay the same amount of taxes in different ways.  The name of the state should be "Taxus") However Workers Compensation could become taxable as Federal Income tax if your workers' compensation payments received causes a reduction in your Social Security disability benefits and you make too much other money. Then, the part of the reduction of Social Security benefits could be taxable as Social Security income.

Less than one third of current Social Security beneficiaries pay Federal taxes on their benefits because they don't make enough money. You will have to pay taxes on your SS benefits if you file a federal tax return as an "individual" and your total income is more than $25,000.  If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. Remember, workers comp only is countable if it reduces the SSA benefits and you make over the minimum amount. 

Also, the reimbursement of a medical bill or expense that was previously deducted could be taxable. All of this should be daunting to you. If your gross income is close to the above amounts, I recommend that you ask a tax professional to look at your specific situation and use this short note as a basis to ask questions.  Or, if you like, you can call the IRS toll-free number (1-800-829-3676) for more information.

I get Supplemental Security Income (SSI) benefits. Do I need to report the financial help I receive from my children?

Yes. Any money or in-kind support you receive (such as free rent and food) must be reported to Social Security. It might or might not affect your SSI, depending on the circumstances. You can report this income by calling the Social Security Administration at 1-800-772- 1213.

I just inherited a home and I am concerned I may lose my SSI payments and Medicaid.  Do I have to give it away?  Do I have to move?  Do I tell anyone?  What can and should I do?

In order to get or keep your SSI benefits, you have to be at the poverty level. If you are injured in an accident and receive any type of settlement, or if you inherit property or money, you may need to transfer the money, and the income from property if it is sold, into to a Special Needs Trust (SNT) so you don't lose SSI and any other benefit you are getting because of your lack of income and wealth. Just your Medicaid benefits alone are an asset you must steadfastly protect.  No SSI, No Medicaid.

Depositing your windfall assets into a SNT can allow you to improve their quality of your life, while preserving their important public benefits. But this is effective only if the trust is properly drafted and carefully administered. This special needs trust planning is needed for those receiving SSI, but not for those receiving SSDI.

If you get a windfall, don't think that no one will find out. Very often the SSA does find out. It is not just about maintaining your SSI payments each month, people are regularly prosecuted and go to jail because they are fraudulently receiving benefits. At the very least you may end up owing tens or perhaps hundreds of thousands of dollars of benefits back to Social Security. If that happens, payments will stop until they add up to the entire debt. The best thing is to deal with a windfall straight up and use a SNT.

Before deciding to place a your assets in a SNT, you should consider other alternatives first. For example, if you inherit a home you live or intend to live in, you don't have to put it into a SNT because it is an exempt asset. However, if you later sell it, you can place the proceeds in a SNT and keep your benefits. You could purchase an exempt asset with your windfall, (like a home) and still keep your SSI benefits. You could also spend the windfall on things which would improve the your home or build improvements, such as access ramps. You could buy a handicapped equipped van, prepay expenses or services, or enter into a lifetime personal services contract. All of these are a way to spend down a windfall and keep your SSI benefits.

If you do decide to use a SNT, to keep your SSI benefits, the trust must meet six legal requirements to be approved by the Social Security Administration.

  • First, the disabled person must be under age 65. If the person is over age 65, Medicaid now prohibits any assets from being placed in a SNT after the person attains the age of 65. If you did it before November 1, 2007, it is still OK.
  • Second, you have to establish the trust with your assets (the assets of the disabled person). You don't have to be determined disabled by SSA before you create the trust, but you have to get it approved by SSA if you are determined to be disabled by them.
  • Third, you as the disabled person must be the sole beneficiary of the trust, but you cant be the trustee of the trust. What a SSA approved trust can pay for is somewhat limited. It can pay for your expenses during your life and some of your expenses after death Since payment of funeral expenses is not one expense that is allowed after death, your trustee should always use SNT funds to prepay funeral and burial expenses during your life.
  • Fourth, the trust must have been established by a parent, grandparent, legal guardian, or, in Texas, a District Court Judge. The disabled person cannot be the grantor or person establishing the trust, nor can the disabled person's spouse, adult child, or friend, set up the trust. Often a petition must be filed in court to establish the trust.
  • Fifth, the trust must contain specific language requiring the trustee to pay back Texas for medical assistance it provided you during life after you die. This is called the "Medicaid pay-back provision." Only after the this payback can your remaining assets pass to someone under your will or by law. If you don't have enough assets to pay Texas back, your heirs do now owe the State anything, it just means they don't get anything.
  • Sixth, the trust must be irrevocable. This means you cant take it back. Some of the ten social security regional offices are even more stringent with this requirement. They say for a trust to be irrevocable it cannot be changed. Others say that if the trust does not specify a specific person or entity as the residuary beneficiary after payback to Medicaid, the trust is revocable, and thus fails to meet SSA criteria. For example, if the trust reads, "On my death repay Medicaid and then to my heirs at law," they say the trust does not meet SSA requirements, because it fails to specify the beneficiary by name and thus is revocable. These overreaching requirements of regional offices generally should be followed as it is normally just too difficult to fight and easy to write into the trust what they want. It is more form over substance in most cases.

One of the hardest decisions is who to be made the Trustee of the trust.  Here are some guidelines

  • A spouse is never a good choice because of the rules which deem income of the spouse to the disabled person in determining eligibility.
  • If parents are not alive, you should consider one of your adult children, or a brother or sister to be Trustee. However, most thefts from SNTs are committed by relatives who do not follow the requirements of the trust. You can get a bond to act as insurance if your Trustee does not follow the requirements of the trust or steals from it, but some bonding companies will not issue a bond for a non-professional trustee. In addition, your family members may not have the financial sophistication to deal with accounting requirements of the SNT and investment risk.
    1. For example, whoever serves as trustee must realize that they are accountable for all income and expenses, as well as for compliance with the administrative requirements of special needs trusts. They must not make cash distributions to the disabled person which would reduce their monthly SSI benefit
    2. The trustee should also not make payments to others to provide food, clothing, and shelter, because that would also reduce the SSI benefit, but only up to couple hundred dollars a month. The trustee may make the decision to pay for condo rent and expenses even though the disabled person would lose this couple hundred dollars a month, in order to improve their quality of life, but would not lose their Medicaid coverage which is their most important benefit.
    3. The trustee may safely pay directly for a whole list of items, other than food, clothing and shelter, such as telephone, cable, uncovered medical expenses, education, entertainment, a residence or second home, vacations, aids and attendants. The trustee may also purchase personal property, such as a television or computer, and may provide the disabled person with a credit card to charge these items.

Some trust companies and brokerage houses will write a SNT for you, but they may lack personal understanding of your needs as a disabled person. Some guardians and care managers, accountants, or attorneys, are willing to be Trustees, often for a lower fee than a corporate trustee or bank. My choice is to use a professional guardian or a company specifically set up to administer special needs trusts.  Can you say "Expensive?"

In Texas, the ARC of Texas (Master Pooled Trust) is available for those smaller settlements that cannot justify the cost of an individual Special Needs Trust.  However, as part of the trust agreement, you as the injured party may not own or have direct access to the trust fund, and the trust must be irrevocable. Trust funds may not be used to provide for rent, clothing, or food, but only for expenses not covered by entitlement benefits. The injured party cannot be the grantor or settlor of the trust; trustee and successor trustees must be other than the injured party; and trustees have absolute discretion regarding the disbursement of funds for supplementary needs.

Does this sound difficult?  Yes it is.  Establishing a trust that will be approved by SSA is a complicated legal matter.  This information is here to acquaint you with the general guidelines for a successful SNT.  Get a lawyer immediately if you are on SSI and get a windfall.

If a woman (widow) remarries, would she lose her Social Security benefits if she receives Social Security based on her own work record? How about if she were collecting Social Security based on her former husband's work record? If she does lose it by remarrying, would she get it back again if her present husband dies or gets divorced?

The remarriage of a widow(er) does not affect benefits received on his/her own work record. The remarriage will only affect a widow(er), if he/she is receiving benefits as a surviving spouse, surviving divorced spouse or disabled widow. Generally, you cannot get widow's or widower's benefits if you remarry before age 60. But remarriage after age 60 (or age 50 if you are disabled) will not prevent you from getting benefit payments based on your former spouse's work. And at age 62 or older, you may get benefits based on your new spouse's work, if those benefits would be higher. Finally, benefits cannot continue to be paid if the divorced spouse remarries someone other than the former spouse, unless the latter marriage ends (whether by death, divorce, or annulment), or the marriage is to a person entitled to certain types of Social Security auxiliary or survivor's benefits.

I am receiving Supplemental Security Income (SSI) benefits, and my checks go directly to the bank. How Do I get Social Security to change where my payments go if I change banks?

Open your new account and then call Social Security at 800-772-1213. Tell the representative your new account information, including your new account number. As usual, things take time with Social Security, so don't close the old account until you're sure your SSI monthly payment is being deposited at your new bank.

I am now getting Social Security disability benefits but will be at retirement age soon (62). Can I still get my regular Social Security retirement benefits when I reach full retirement age? Will the money amount change?

You will not receive both a disability and retirement benefit from Social Security, but if you are still receiving Social Security disability benefits when you reach your full retirement age, Social Security will automatically switch you from disability benefits to retirement benefits at that point. The money amount will remain the same. Social Security will just classify you as a retiree instead of a person with a disability.

Are Social Security Disability or Retirement benefits Taxable?

If your only source of income is from Social Security, odds are that you wont have to pay income tax on those benefits. But, if you have other income besides Social Security, you have work to do.

To find out whether your Social Security disability benefits will be taxed you must do a special calculation: Add up all your income, including tax-exempt income, plus one-half of your Social Security benefits. Then:

According the 1983 tax threshold that is still in effect and has not been indexed for inflation, if you're single and the total exceeds $25,000, or if you're married and filing a joint return and the total exceeds $32,000, up to half of your Social Security benefits will be taxed. Had the basic income threshold of $25,000 for a single person been indexed to inflation, it would stand at about $52,044 today, a government inflation calculator shows.

According to the 1993 tax threshold that is still in effect and has not been indexed for inflation, if you're single and the total exceeds $34,000, or if you're married and filing a joint return and the total exceeds $44,000, up to 85 percent of your Social Security benefits will be taxed. Had the basic income threshold of $32,000 for a married couple been indexed to inflation, it would stand at about $66,616 today. So unless you can get your elected officials to at least index the thresholds to inflation, you and many other Social Security beneficiaries are stuck. You can bet there wont be tax relief in this area.

A word of advice: All of this calculating is not easy. Better get expert help in your tax return preparation. Many people repeatedly make mistakes in calculating the taxable amount of their Social Security benefits, according to a report by the U.S. Treasury Inspector General for Tax Administration.

For more information on calculating the tax on Social Security benefits, see Internal Revenue Service Publication 554, "Older Americans Tax Guide." For a free copy, visit your local IRS office, call the IRS toll-free at 1 (800) 829-3676, or use this IRS Web site.

What is your Law Offices' policy on personal information I give you about your case?

The privacy of our clients has always been of utmost importance to insert law firm name. The privacy policy outlined below applies to the Social Security data we collect from you. This is our notice to you about why we collect your personal information, how we use it, who we share it with and how we protect the information we collect and maintain.

How and why we collect your personal information:

        We ask that you provide us with your Social Security number at the time we initially undertake your representation.

         We need your Social Security number to obtain your medical records and wage information. We do not use the information for any other internal secondary purpose.

        If you do give us your personal information, we treat it very carefully.

         We collect personal information about you (e.g., name, email address, Social Security number or other unique identifier) only if you specifically and knowingly give it to us.

How this personal information is protected:

        We will take reasonable precautions to maintain the security, confidentiality and integrity of the information we collect.

        Information in your file is confidential and is only accessible to members of our staff.

How and when we will use your personal information:

         We do not sell the information we collect.

        The personal information you give us will be used only in connection with the prosecution of your claim and for other purposes as described in this document or at the point the information is collected.

Who we will share your personal information with:

  • We may disclose your Social Security number to health care providers, employers, and the Internal Revenue Service in order to obtain evidence relevant to your claim.
  • We may also disclose your Social Security number to an adverse party if requested to do so in the course of the discovery process and only where such information is relevant to the claim.      

How we dispose of this personal information:

        At the conclusion of your case, your file will be stored for a period of at least five (5) years. At that time if it is appropriate we will destroy your file, including information about your Social Security number.

Who wrote the Social Security Act anyway?

The Father of Social Security is the late Edwin E. Witte, a native of Watertown, Wisconsin.

Edwin Witte was born on a farm in the town of Watertown back in 1887. He was a graduate of Watertown High School and then received his undergraduate degree from the University of Wisconsin in Madison in 1909 and his doctorate in 1927. He was a statistician for the Industrial Commission in Wisconsin for a short period of time and then moved to Washington where he became secretary for Congressman John M. Nelson. By 1914 he was a special agent for the Committee on Industrial Relations for the Department of Labor.

He became secretary of the Wisconsin Industrial Commission in 1917 and remained there until 1922 when he took over as head of the Wisconsin Legislative Reference Library. He was then the first director of Unemployment Compensation for the Wisconsin Industrial Commission in 1934.

It was shortly after that, he was called upon by President Franklin D. Roosevelt to become executive director of the President's Commission on Economic Security which was ultimately the sponsor of the Federal Social Security Act of 1934-1935. It was during this period that Edwin was on leave from his professorship at the University of Wisconsin.

There was a real sense of urgency to this historic legislation and Edwin was leading a team of 20 to 30 experts who were working day and night. When it was all said and done, it was the leadership and the work of Edwin E. Witte that crafted this country's Social Security Administration and its wide reaching programs.

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