Social Security

Below are questions and answers regarding Social Security provided by Michael Walling in his current newsletter, “Benefits Training and Consulting”. Each month, we will add his new Q & A article. To view past newsletters, click here.

Question 1: (note – writer recently completed Session 103 of the webinar)
I have a question about Title XVI benefits and beginning to work. Assume under all these scenarios, “John” is eligible for SSI and has been receiving it for a couple of months. I am trying to understand the distinctions between Section 1619(a) and 1619(b), and then the application of 1619(b).

a. Does Section 1619(a) apply only when John has started working but has not crossed the “break-even” point ($1551*)? Section 1619(a) says that he will still receive Medicaid and he will still receive SSI cash benefits, but his cash benefits will be reduced per the formula. Is this correct?

Answer 1.a. If John is only receiving SSI, he moves into 1619(a) when his wage is $1,090 and he remains in 1619(a) until his wage exceeds $1,551. His SSI cash benefit will be reduced per the formula. Section 1619(a) does protect his Medicaid.

b. Assuming the above is true, then Section 1619(b) applies only when John’s monthly earned income exceeds the break-even point of $1551*. In this case, his SSI cash benefits will be reduced to $0, but he will continue to qualify for Medicaid.

Answer 1.b. Yes, and remain eligible for SSI (non-payment status). This allows him to begin to receive a cash benefit if his wage drops below $1,551*.

c. Assuming this is also true, then my next question is about
how long John would stay eligible for Medicaid. Let’s assume John meets the requirements to qualify for Section 1691(b).

Answer 1.c. John must renew 1619(b) status every 12 months. He can stay in 1619(b) as long as he: 1) has resource below $2,000; 2) unearned income below $753* (the FBR plus $20); 3) earned income remains under the state Medicaid threshold or an individual threshold; 4) does not medically improve; and 5) continues to work.

d. If John continues to make, say, $1560/month, how long will he be eligible for Medicaid? Will he stay on Medicaid indefinitely? Or only 5 years?

Answer 1.d. As long as he remains eligible for SSI (even in Section 1619(b) status), he remains eligible for Medicaid.

e. My next question is what happens once John exceeds the State’s threshold. I wrote down that once the person’s annual income exceeds $33,098 (in Oregon), this starts the clock and the person would no longer be eligible for Medicaid in 5 years. In other words, you have a 5 year safety net where you would continue to receive Medicaid even after you cross the $33k threshold.
Is this true?

Answer 1.e. NO.
Once his earned income exceeds the state threshold or individual threshold he will terminate from SSI and the Medicaid associated with SSI will stop. He could then apply for state Medicaid Buy-in Program (in Oregon – Employed Person with Disability [EPD]. When he terminates from SSI, he has a 5-year “safety net” in which he can request an expedited reinstatement of his benefit if his countable earned income drops below the Substantial Gainful Activity level due to his original disabling condition (for the year this happens).

f. What this all comes down to is, how long can you stay on Medicaid when your SSI benefits are $0 but your income is either ABOVE or BELOW the State threshold?

Does the Expedited Reinstatement of Benefits (slide 146) apply only to you once you exceed the State threshold ($33,098/yr) or once you’re no longer receiving SSI cash benefits, even if you’re below the threshold.

Answer 1.f. The five-year period in which the person could request an Expedited Reinstatement of benefits begins when the person exceeds the Threshold amount and terminates from SSI. If John is in Section 1619(a) or Section 1619(b) status and employment ends (for any reason) his monthly benefit payment will begin. If he has worked long enough and has sufficient quarters of coverage for his age, he will be processed for entitlement to SSDI.

Comment to your scenario: John has recently qualified for SSI. If he moves into Section 1619(a) or Section 1619(b) during the first year of SSI eligibility, he would be performing Substantial Gainful Activity. Social Security may question whether John was ever disabled and terminate his eligibility for SSI retroactive to his date of eligibility for SSI. (This does not apply to individuals with blindness.)

Note: * – the amounts would be higher in Social Security administer state supplement states.

Question 2:
I was at your seminar yesterday in Odessa. I am still somewhat confused. If I wait a year to start working from when disability started then I start and get a commission check in Real Estate and the check is $3000.00 for one month, will Social Security take 3 months disability pay from me or will it be 1 month for one month commission check. Again, thanks for hosting the seminar, it was very valuable information.

The first question Social Security must resolve is whether you are an employee of the brokerage or a self-employed real estate agent. This has a bearing on whether they consider the gross amount of the commission or the net amount after you deduct business expenses related to the commission. You should keep an accurate log of your time invested in the sale, this would enable you to distribute the commission over the months you performed services for the commission. The bottom line to your question – you are in your Trail Work Period and during your Trial Work Period your income does not affect the monthly SSDI payment.
Question 3:
I have alot of individuals applying for Disability and while waiting or shortly after being approved, they want to return to work. It was my understanding while working with a Social Security Project, that an individual has to be very careful not to return to work until the year of being disabled has been completed.
There is no federal law which says you have to be out of work to apply for benefits. The person must have medical evidence to substantiate s/he cannot work substantially. This means the impairment prevents the person from generating $1,090 per month of countable earned incomes for 12 months in any job in the national economy prior to and after the date of inset of disability. If the person does perform Substantial Gainful Activity during the first year of entitlement, Social Security should send the case back to the state disability determination service to see if another date of disability onset can be established, before taking action to terminate the benefit.

Question 4:
Along the way, I read or heard that if a child became disabled prior to age 18 they may can draw off of their grandparents Social Security record. Is this true?
For a child (disabled or not disabled) to draw benefits off a (caregiver) grandparent’s work record, the child’s parents must both be disabled or both be deceased and the grandparent must be in a Social Security insured status. Or, the grandparent has legally adopted the grandchild.

Question 5:
If an individual receiving SSDI returns to work as an instructor and is actively employed 9 months out of 12 months and is paid those 9 months and not paid for the remaining 3 months, is SSA looking at the actual paid months and no pay for the 3 months? Or will they divide the $30,000 annual wage over 12 months when comparing to SGA?
Answer: SSDI counts wage in the month the services were performed when determining whether the person is entitled to the monthly SSDI benefit payment. When SSA is making the decision of the SGA Cessation month, they will only consider the 9 months in which services were performed, but this will be distributed over two periods of SGA. Sept. through Dec. is one period of SGA. Jan. through June is the second SGA period. (Remember, the SGA amount usually changes at the beginning of the calendar year.)

Question 6:
Do members of Congress have to pay into Social Security?
Yes, they do. Members of Congress, the President and Vice President, federal judges, and most political appointees, have paid taxes into the Social Security program since January 1984. They pay into the system just like everyone else, no matter how long they have been in office.

Sometimes We Overlook Numbers

In March 2015, Social Security reported 8,352,303 people received SSI. The average monthly payment was $540.12 (excluding retroactive payments). The total amount of federal money expended during March for SSI payments (including retroactive payments) was $4,801,963,000. [click here for source] “In the FY 2016 President’s Budget request includes $938 million specifically for conducting SSI CDRs and redeterminations, which would allow SSA to conduct approximately 428,000 SSI CDRs1 and 2,622,000 for re-determinations. The total funding is estimated to result in about $4.9 billion in net program savings over the next 10 years.” [click here for source]

In you want more detail about SSI, check out “The Annual Report of the Supplemental Security Income Program,” issued in August 2014. This report covers SSI up to the beginning of 2014. [click for access to annual report]

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