Supplemental Security Income (SSI) cash payments are payable to the aged (65 and over), blind, and disabled (including children) who are in financial need. Social Security is an insurance program. SSI is a welfare program. We mention this program only because it is administered by the Social Security Administration, but we do not go into the numerous rules, requirements, procedures and details because this program is beyond the scope of this book.
Entitlement to SSI is contingent upon the amount and types of income and resources you have available to you. The income and resources of those relatives legally responsible for your support (parents of minor children, spouses) will also affect your entitlement to SSI.
The amount of the SSI payment is fixed for all recipients (although many states make supplemental payments included in the SSI check) but is affected by various factors such as types and amounts of other income you receive, the value of your resources, and whether you live alone, with others, or in a nursing home or group home.
The SSI check is gold colored and is delivered on the first day of the month. Although the SSI program is administered by the Social Security Administration, the SSI payments do not come from the Social Security trust fund. The payments are made from the general revenues of the Federal Government derived from various tax payments. If you think you are eligible for SSI or require more information you should contact your local Social Security office. Use this online office locator. Click here.
The Federal Coal Mine Health and Safety Act of 1969 established payments to coal miners who suffer from pneumoconiosis, commonly referred to as "Black Lung." Only Black Lung claims filed before July 1, 1973, are under the jurisdiction of Social Security.
All applications filed after that date are under the jurisdiction of the Department of Labor. Social Security does maintain jurisdiction of claims filed by the survivors of miners who were afflicted with Black Lung.
Black Lung payments are made to coal miners who are totally disabled due to pneumoconiosis. Additional payments may be made to these miners to provide for a dependent wife, divorced wife, or children. Survivor benefits may be paid to widows, children, a surviving divorced wife, parent, brother or sister of a miner who was entitled to Black Lung benefits at the time of his death, or who was totally disabled by pneumoconiosis at the time of death, or who died from pneumoconiosis. For further information contact Social Security or the Department of Labor.
The Social Security Administration will provide an estimate of the amount of benefits payable to anyone who requests it. All benefit estimates given by Social Security will be based on the amount of earnings actually shown on the record of earnings and will not be based on any proposed future earnings. Although Social Security will provide estimates for people of any age, those estimates for workers who are under age 60 cannot be completely accurate. Estimates for people of any age can only be based on the information currently available to Social Security. Estimates of benefits far into the future have been shown to be inaccurate because of changes in the Social Security Act and wide swings in inflation.
If you are nearing retirement age and would like an estimate, you may contact your Social Security office or call 800-772-1213. You may also use the Social Security Administration's Online Calculator. Click here.
Social Security will provide, free of charge, a "Statement of Earnings." This statement shows the annual earnings credited to your record. Because of the amount of time it takes to process reports of earnings, the first and second year preceding the request may not be available. It is a good idea to check your Social Security records every three years. You my request your earnings statement from the Social Security Administration by submitting an online form to them. Click here for further information from the Social Security Administration.
Usually, the earnings record can only be corrected up to three years, three months and 15 days after the year the wages were paid or self-employment income was earned. If you have a disagreement with your employer about how much you were paid, when you were paid, or whether the work was covered under Social Security, you must act within the three years, three months and 15 day time limit. If a disagreement exists Social Security will help you obtain the necessary information to settle the dispute. Based on all evidence received, Social Security will decide whether earnings can be credited, how much earnings should be credited, and for what period. Social Security will notify you of the decision they have reached and what corrective action, if any, they are taking.
Once the three year, three month, 15 day time limit has expired, the earnings record cannot be revised unless one of the following conditions is met:
1. An entry was established through fraud;
2. A mechanical, clerical, or other obvious error is detected (such as earnings mistakenly reported under a wrong Social Security number or mistakenly unreported);
3. Earnings were credited to the wrong person or to the wrong period;
4. To transfer earnings to or from the Railroad Retirement Board if reported to the wrong agency;
5. To add wages paid by an employer who made no report of any wages paid to an employee;
6. To add or remove wages in accordance with a wage report filed by an employer;
7. To add self-employment income if the tax return was filed within the legal time limit;
8. To add self-employment income up to the amount of employee wages deleted as being erroneously reported if a self-employment tax return is filed within three years, three months and 15 days of the year the earnings were deleted. (This may occur where "employment" later is determined to be "self-employment.")
Social Security does its best to ensure that wages are properly reported. Although corrections legally can be made at a later time, the longer you wait to correct a problem, the harder it will be, due to destruction and loss of records. You should take action to correct your Social Security record as soon as a problem is identified.
A change of address can be reported to Social Security using three methods - with a telephone call, visiting the office, or by letter.
The Department of the Treasury prepares and mails all Government checks. Social Security must notify the Treasury Department of all address changes. Social Security checks are delivered to the local post offices well in advance of the due date to ensure their timely delivery. All of these factors take time. It can require as much as 40 to 45 days for a change of address to take effect. It is important to notify Social Security as soon as you know your new address. It is also important to file a change of address form with the Post Office so that even if the change of address does not register, the Post Office will forward your check.
Section 1407 - Claim Numbers and Beneficiary Identification Codes
Every person who applies for Social Security benefits is assigned a claim number and all records are maintained by that number. The claim number consists of the Social Security number of the worker on whose account the benefits are based with a letter (or letter and number) following it. It is used on all correspondence from Social Security.
The retirement beneficiary's claim number is his Social Security number followed by the letter A. His/her spouse on the account is assigned his number followed by the letter B (if she/he is 62 or over) or B2 (if she/he receives because she/he has a child in her/his care). Children are identified by the letter C and a number (usually 1 for the youngest, 2 for the next youngest, etc.). Widow(er)s receiving on account of age are identified by the letter D.
If a person is entitled on more than one account, the records are maintained under both accounts, but one account takes precedence. If a widow(er) receives both as a retired wage earner and as a widow(er), all correspondence and checks will be sent to her/him in her/his own number followed by the letter A. Other than the initial award letter, the secondary account number will not be mentioned. Beneficiary identification code letters are listed at Appendix 8.
Section 1408 - Who is Entitled to Benefits Due a Deceased Beneficiary
An underpayment exists when benefits are due which have not been paid. Usually underpayments are due because of returned checks or increases in benefit amounts for various reasons. If the underpaid person is alive the payment is made to him (or his representative).
A deceased person can also be due an underpayment. When this occurs the underpayment is paid to whichever person is highest in priority in the following list:
1. To the widow or widower if she or he was living in the same household at the time of death, or, even if not, was entitled to monthly benefits on the same earnings record (receiving spouses benefits- not including divorced spouses benefits).
2. To the child(ren) of the underpaid person who was entitled to monthly benefits on the same earnings record as the deceased for the month of death. The underpayment is divided equally among all such children.
3. To the parent(s) of the underpaid person entitled to monthly benefits on the same earnings record for the month of death.
4. To the widow(er) who was neither living with the underpaid person nor entitled to monthly benefits on the same earnings record.
5. To the child(ren) who were not entitled to monthly benefits on the same earnings record as the deceased for the month of death.
6. To the parent(s) who were not entitled to monthly benefits on the same account as the deceased.
7. To the legal representative of the estate.
For example, if the deceased was survived by his wife who was living with him but not entitled to monthly Social Security benefits and an 18 year old daughter who was receiving monthly Social Security benefits on his account, the underpayment would be paid to his widow. If the deceased and his wife were separated, the underpayment would be paid to his daughter. If the daughter was not entitled to monthly benefits and no one else was, the underpayment would be payable to the widow. The underpayment is not paid to all persons on the list of priority. It is paid only to the highest person on the list. Two or more people with the same priority (e.g., two surviving children) split the underpayment equally.
If Social Security can determine who is entitled to the underpayment, they will pay it automatically without a specific request. If the Social Security records are insufficient to determine all persons who may be entitled (surviving wife or children not entitled to monthly benefits) a request is required from one person who is entitled to share in the underpayment. Proof of relationship may be required.
Section 1409 - Taxation of Social Security Benefits
Social Security benefits are subject to income tax if you have income which exceeds the following amounts: $25,000, if you file as a single taxpayer; $32,000, if you are married and file a joint return; but $0, if you are married and you live with your spouse at any time during the year and file separate returns.
When you figure your total Social Security benefits received, you have to include gross benefits before deductions for such items as the Medicare premium, a lawyers fee, or Workers Compensation offsets.
In figuring your total income, you must also include "non-taxable" earnings such as interest from municipal bonds. The Social Security benefits are taxable only to the extent they exceed the above limits, but for an individual only 50% of the excess is taxable up to $34,000, 85% of the excess over $34,000; for a couple, 50% of the excess over $32,000 up to $44,000, then 85% of the excess over $44,000.
If you wish, you may request that taxes be withheld from your benefits. To have your taxes withheld, you must: Complete IRS Form W-4V, called a Voluntary Withholding Request form. You may select what percentage of your monthly benefit amount you want withheld either 7%, 15%, 28% or 31%. Only these percentages can be used. Flat dollar amounts are not acceptable. After you've made your selection, sign and return the form to your local Social Security office by mail or in person.
Section 1410 - Immunity of Benefits from Creditors
No creditor has the right to attach a Social Security benefit, except that benefits can be attached for child support/alimony payments or by the IRS for the payment of back taxes. Once the benefit has been received and put into an account such as a savings account or a checking account, it can be attached unless it is a separate account clearly marked "Social Security Benefits." It is very important if you are receiving benefits on behalf of a child and placing them in a savings account that the account clearly specifies that the funds are Social Security funds, so that your creditors cannot attach the child's money.
Under the Social Security program, fraud can be found to exist if a person furnishes false information as to identity to get a Social Security number, or a false statement in connection with a claim for Social Security benefits, or if a person uses a Social Security number obtained by fraud.
Fraud can also be found if a person conceals or fails to report any event affecting the right of a person to receive a Social Security check, or uses Social Security benefits received on behalf of one person for the use of somebody other than that person. Social Security may prosecute fraud even if no benefits were ever paid by the government on the basis of the statement.
The penalty for fraud ranges from a minimum of not more than a $500 fine or imprisonment of one year or both, to a fine of not more than $10,000 or imprisonment for up to 15 years or both. Acts such as alleging you retired when you actually have not or alleging that you transferred a business to your spouse when you did not are a few examples of cases Social Security may prosecute.
Even if criminal fraud is not involved, or in addition to criminal fraud penalties, the Social Security Administration may impose sanctions when an individual makes (or causes to be made) a statement of a material fact to get benefits if:
a. The statement is false, misleading or omits a material fact; and
b. The person knows or should know the statement is false, misleading, or omits a material fact; and
c. The statement is made with a knowing disregard for the truth.
The sanction penalty is nonpayment of benefits for 6 months for the first occurrence, 12 months for the second occurrence or 24 months for each occurrence after that. If the beneficiary is not currently receiving benefits, the penalties will be noted on the record and will be imposed if the person becomes entitled in the future. Only the guilty beneficiary will suffer sanctions; others receiving benefits on the account will not be subject to the sanction if they were without fault.
Social Security has entered into international agreements, called totalization agreements, with 21 foreign countries: Australia, Austria, Belgium, Canada, Chile, Finland, France, Germany, Greece, Ireland, Italy, Japan, South Korea, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. A totalization agreement is pending with Mexico. It must be approved by Congress.
The agreements allow people who have work credits in those countries to file an application with Social Security in the United States for potential Social Security benefits from the other country. This provision allows some people who dont have enough work under either Social Security system to be able to collect one Social Security benefit. It also allows people who are entitled to benefits from both systems to file for them and collect them conveniently.
At the time you file for Social Security benefits in the U.S., the interviewer will ask if you ever worked in a foreign country covered by the agreement. Social Security will complete a second application for potential benefits from that other country for you.
People who work for the railroads are not covered under Social Security; they are covered by the Railroad Retirement Board (RRB). If you are entitled to benefits from both Social Security and from the RRB, they are made in one combined payment. SSA will compute your Social Security benefit and send the information to the RRB who will figure your annuity and adjust it for the amount of Social Security you receive. To be entitled to railroad retirement benefits, an employee must have ten years of railroad service. If he has less, his railroad employment will be credited to his Social Security account. If an employee does not have enough work to collect a Social Security payment, his earnings under Social Security will be credited to his railroad retirement account. Survivor benefits may be paid by either agency.
More information on railroad retirement benefits can be obtained by contacting Railroad Retirement Board field offices in major cities throughout the country, or calling 1-800-808-0772.
Section 1414 - Receiving Benefits for Someone Else The Representative Payee
Social Security benefits will be paid to an adult in his or her own name unless he or she has been shown to be incompetent or incapable of managing his/her own funds. A mentally ill person may still be able to manage benefits in his or her own interest; if so the payment will be made directly. A physically disabled person will have payments made to a representative payee only if so disabled as to be unable to manage benefit payments even with the help of someone else. Benefits to children under the age of 18 normally are made to a representative payee. The payment may be made directly to a child under the age of 18 if the child is entirely self-supporting and living away from home, or in other limited circumstances. It is unusual for a child under the age of 18 to collect payments on his own behalf. Benefits may not be paid to a child under 15.Once a child turns 18, payments are made directly, unless there is a need for a representative payee.
The order of preference in appointing a representative payee for a child is: a natural or adoptive parent with custody; a legal guardian; a natural or adoptive parent without custody, but who shows strong concern; a relative or stepparent with custody; a close friend with custody and provides for the childs needs; a relative or close friend without custody, but who shows strong concern; an authorized social agency or custodial institution; or anyone not listed above who shows strong concern for the child, is qualified, and able to act as payee, and who is willing to do so.
The order of preference for an adult is: a spouse, parent or other relative with custody or who shows strong concern; a legal guardian with custody or who shows strong concern; a friend with custody;a public or nonprofit agency or institution; a Federal or State institution; a statutory guardian; a voluntary conservator; a private, for-profit institution with custody and is licensed under State law; anyone not listed above who is qualified and able to act as payee, and who is willing to do so; a friend or relative without custody, but who shows strong concern for the beneficiarys well-being; or an organization that charges a fee for its service.
The responsibilities of a representative payee are: to apply benefit payments for the beneficiarys use; to maintain a concern for the personal welfare of the beneficiary; to notify Social Security when the responsibility for the welfare and care of any person entitled to Social Security ends; to report to Social Security any changes that may affect the beneficiarys right to receive Social Security; and to give Social Security periodic written reports accounting for the use of benefits, if requested to do so. Benefits paid to a representative payee must be spent for the beneficiarys current needs or saved for the beneficiary if all current needs are being met.
If you receive Social Security benefits on behalf of another and find that you are able to save some to establish a bank account for the person, the bank account must clearly indicate that the funds in that account are Social Security benefits. The preferred format for the title of the account is: "Name of Beneficiary, By Name of Representative Payee," or "Name of Beneficiary, By Name of Representative Payee, Trustee." A bank account title such as "Name of Payee in Trust for Beneficiary" should not be used because some states treat the funds in such an account as belonging to the Representative Payee. Whatever the title of the account is, it must clearly indicate that the money in the account is the property of the beneficiary, and no one else, and that it is derived from Social Security benefits.
Social Security requires a written account from representative payees on a periodic basis. If you are acting as a representative payee, you should keep records showing how the Social Security money was spent. The reporting you will be asked for may include the amount of benefits you had at the beginning of the period, where the beneficiary lived during the period, the amount of income from other sources during the year, how the benefits were spent, how much of the Social Security benefits were saved and how they were invested.