Spring 2012 Newsletter
election year, we hear a lot of talk. Some good, some bad. One of the
hot-button issues in every election is the cost of “entitlements.” When
a politician is speaking of “entitlements,” to what, exactly, is he
referring? Certainly, public assistance, food stamps, shelter allowances
and Medicaid come to mind. Some would argue that Medicare and Social
Security might fit under that umbrella. In past Newsletters we have
addressed issues with respect to Medicaid and Medicare, but we have
presented no discussion of Social Security and its basic sub-divisions.
That is the focus of this Newsletter.
Social Security has four basic
subdivisions: its retirement pension system, disability, family and
survivor’s programs. With respect to its retirement program, many people
rely on Social Security payments as their major source of income after
retirement; it is the largest provider of pensions in the country.
In order to qualify for Social Security, one is credited for wages or
self-employment income during her lifetime of labor. For those born
after 1928, a total of 40 credits (10 years of work) are required to
obtain retirement benefits. One need not accumulate those credits
continuously. During one’s working-life, Social Security distributes an
annual statement notifying you of your earnings record and estimated
retirement benefits. The higher your lifetime earnings, the higher your
benefits will be.
When one retires and applies for benefits, then Social Security provides
you with your actual benefit amount. Said payments will then continue
for the duration of one’s life. Below is a chart taken from the Social
Security website which shows when a retiree may expect to receive full
receive full Social Security benefits
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
1960 and later
People who were born on January 1 of any year should refer to
the previous year
Unlike disability insurance, or SSD, which
is discussed below, SSI is federal welfare; the program pays monthly
benefits to the disabled (also to the blind and aged.) Someone is
“disabled” when he is unable to engage in substantial gainful activity
because of a physical or mental medical condition which is anticipated
to last for at least twelve months or until death. Establishing
disability may be contingent upon the results of an applicant’s medical
examinations and/or medical tests. One must sign a release to allow
Social Security to contact one’s doctor. Once the investigation is
completed, then a local agency reviews the reports and results with all
the supporting information, and renders a decision.
In addition, eligibility is based upon economic need. In determining SSI
eligibility, SSI investigates an applicant’s income and resources, much
like Medicaid, but with a lower threshold for resources and, in some
cases, a lower threshold for income than Medicaid allows. If one is
receiving SSI, then he would automatically receive Medicaid for 24
months, on the 25th he would then receive Medicare. The caveat is that
he must be an SSI recipient for continued Medicare coverage. That means
he can have no resource in excess of $2,000, but a home, and its
contents, and car would be exempted.
Income would be limited as follows: an exemption for the first $20 per
month, and then it would depend upon whether the income was earned or
unearned. The threshold for earned is higher than for unearned income.
Frequently, resource and income levels become an issue when an SSI
recipient receives the proceeds from a lawsuit. Compensatory damage
awards from a lawsuit are considered exempted income in the month that
they are received. (Punitive damages are not.) However, if, for example,
an SSI recipient receives the proceeds from a lawsuit this month, April,
and if she did not spend those proceeds within 60 days, they would then
be considered a countable resource in June making her ineligible for SSI
the following month, or July.
Disability Insurance (SSD)
SSD is paid to disabled individuals who
are fully insured and cannot work. Like SSI, for SSD someone is
considered “disabled” when he is unable to engage in substantial gainful
activity because of a physical or mental medical condition which is
anticipated to last for at least twelve months or until death.
Establishing disability may be contingent upon the results of an
applicant’s medical examinations and/or medical tests. One must sign a
release to allow Social Security to contact one’s doctor. Once the
investigation is completed, then a local agency reviews the reports and
results with all the supporting information, and renders a decision.
Eligibility is not contingent upon economic need. Income is a factor,
however. With SSD, benefits would be affected by income that exceeds
$300 per month. An individual who receives SSD benefits for 24 months
would be eligible for Medicare on the 25th month, regardless of age.
Once all of the eligibility requirements are satisfied, no benefits are
paid until a period of five months has elapsed since the onset of the
disability, with a 12 month retroactive period of coverage.
For more information on the above and for information on additional
programs, see the Social Security website at
www.ssa.gov. The website is
comprehensive and easy to navigate; one can apply for any of the above
The above list is for general information purposes only. It is not intended to constitute individual legal advice or a specific recommendation to any particular client.
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