Navigating Life as we Know It

20. Understanding SSA Pt 1 -SSI and SSDI

February 17, 2021 Envision Media Group Season 1 Episode 20
Navigating Life as we Know It
20. Understanding SSA Pt 1 -SSI and SSDI
Show Notes Transcript

Most government benefit programs are infused with a level of complexity that is inappropriate for the faint of heart.  Social Security is no exception.,  This episode is part 1 of a 2 part interview with Hillary Hatch a specialist in disability benefits with the Social Security Administration.  I thought I knew all about SSI, SSDI and disability work incentives.  I was wrong.  I learned a lot doing this interview.  Enjoy!

Hillary Hatch:

Hi, this is Steve, have you ever taken a walk through a corn maze, the objective is to enter on one side and exit on the other. But either way, you have to decide whether to take the path on the right or the left, you make your choice and you start winding down the path only to find a dead end. So now you have to double back the way you came in and try another choice. Some people find this entertaining and actually pay money to walk through a corn maze. I find it frustrating and disturbing. It's way too much like attempting to navigate the many issues that confront families living with disability. But it doesn't have to be that difficult. Once in a while you find a great guide who helps you make the right turns and choose the right options. And suddenly that corn maze isn't quite as daunting. It even begins to make sense. After a while. Welcome to our two part series on Social Security. And episode one today we visit with Hillary hatch, an experienced guide who happens to work for the Social Security Administration. One of those corn mazes families need to navigate when their disabled family member turns 18. Hilary will tell us about SSI, Supplemental Security Income SSDI, social security disability income, and our SDI retirement survivors and disability insurance. These can be quite complex. As many of you already know from practical battlefield experience. Hillary does an excellent job of delineating and differentiating the benefits of each program. During her visit, she'll be answering several questions that parents have asked regarding difficulties they have encountered dealing with social security. One of those questions has to do with how to determine how much rent you charge your son or daughter who is living with you and collecting SSI benefits, her answer may surprise you. Episode Two of our series on Social Security will be released on February 24. In the second episode, Hillary will explain how earned and unearned income impact benefits received from SSI and SSDI. employment is encouraged with these programs but not without some danger along the path. For one thing there are earning limits. There is also complex issues and how to accurately report income. a wrong turn on this path may jeopardize Medicaid eligibility and it might result in you getting a notice that you have to repay an overpayment. Again, Hilary does an excellent job explaining work incentives and explaining online resources that can help you navigate what could be a very treacherous path. If you enjoy listening to navigating life as we know it and you'd like to support our podcast, there are three ways you can do this. Number one, tell your friends and other families living with disability about us. simply refer them to en el awki.com that's n Locky comm is probably the easiest thing to do. There they will find every episode listed. And with one easy click they can listen to any of them for free. Number two, subscribe to our podcast on Google Apple, Spotify, Amazon, I Heart Radio or any other podcast platform of your choice. When you subscribe you'll be notified when each new episode is released. Number three, become a supporter through patreon.com slash n l a WKI. For about the price of one small cinnamon Dolce latte a month, you can become a sustaining member of navigating life as we know it. And our memberships are calorie free, gluten free and 100% vegan, please check out patreon.com slash and lucky and consider supporting our work by becoming a sustaining member. And now on with the show. Hilary Welcome to navigating life as we know it. Thank you so much for having me today. Because of the volume of what we have to cover, we're going to have this structured is two separate episodes. Part one is about the benefits and the programs and part two will be about working while receiving benefits. We will also let you know there's a PowerPoint that goes along with this. So you can access that on our webpage and follow along or use it as a resource to go back and look up something. I have lots of information about social security benefits that hopefully you and your listeners will find useful. To get started I want to talk about our disability programs when we have two disability programs. I'm going to talk about each one of those programs just kind of do a side by side comparison and then I will talk about more details on each of those programs, you tell us what title two and title 16 are? Sure. So our title to program is also referred to as the SSDI program, or Social Security Disability Insurance Program, and individuals that are entitled to the SSDI program. They are also entitled to Medicare in individuals that are entitled to SSDI. Their benefit amount is based on how much they've worked and paid into Social Security. Our other program, the title 16 program, is the SSI program or Supplemental Security Income program. And individuals that are entitled to SSI are also entitled to Medicaid. And this is a needs based program. So work is not a qualifying factor for the SSI program. We look at a person income, we look at their resources, and we look at their living arrangement to determine what the SSI payment is going to be. And also eligibility for the SSI program. So in other words, Medicaid is an automatic benefit with SSI in Medicare is something which you get, along with SSDI, which is work benefit paid off of your own work record. Yes, that's correct. The next part is Social Security's definition of disability and that that is kind of befuddling to some people, because there seems to be gray areas between someone's being, you know, fully abled and disabled. So how would you explain the definition of disability. So the definition of disability that is the one thing that both programs have in common, so to qualify for SSDI benefits for for SSI benefits, an individual has to meet that definition of disability. And social security defines disability as having a medical condition, or a combination of impairments, preventing substantial gainful activity for at least 12 months, or expected to result in death. When we are making the determination. We're also considering a person's age, their education, and their work experience. And in our definition of disability, we talk about substantial gainful activity, also referred to as SGA. So basically, what SGA is, we put it we put $1 amount on it, and that amount changes each year, for this year, that dollar amount is $1,260 per month. So if an individual impairment is anything other than blindness, earnings, averaging over SGA, the $1,260 per month, generally demonstrates that person is able to work SGA, that amount is different for blind individuals, the amount is $2,110. how this would work in an initial claim example would be if an individual filed for disability benefits or for SSI benefits. And they have a medical condition that is a terminal illness. We know they need the medical piece of the definition, they have a medical condition that is expected to result in death. There's no with a terminal illness, we don't question that. However, if that person is still working, and they're making over $1,260 per month in gross wages, their application would be denied. It would be an automatic denial, we wouldn't send it to our medical examiner to get a medical examination. Because they don't need that second piece of the definition of not being able to work at GA. I got a couple of questions. One is from Denise in jennison. And her question is,

Denise:

what do you do about someone who isn't disabled enough or doesn't have a diagnosis and are unable to live independently? Or even to be employed? What is the appeal process short of hiring an attorney to get these type of people benefits?

Hillary Hatch:

That is a really great question. And there's there's a lot of parts to it. So I will I will do my best to answer that question. A person has to meet Social Security's definition of disability in order to receive those benefits person does not have to necessarily have a specific diagnosis to qualify. The state Disability Determination services or DDS is responsible for making the medical decision. And our medical examiners. They follow a five step process. We call it the five steps of sequential evaluation. And so first, they're looking to see if the person is engaging in FDA. They're looking to see if the person has a severe impairment does the person And meet or equal a medical listing can the person perform past relevant work and can the person perform other work? on our website, there is a full list of impairments, and what the requirements are in order to meet that listing. And that's called the blue book. So if you were to go to WWW dot SSA dot govt, and in our search box, if you type in the blue book, all of our impairment codes and listings will come up. So you can look under the impairment code in the listing the medical listing, and see how a person would qualify based on what that listing is. If an individual is denied, an appeal can be filed, but it has to be filed within 60 days of receiving that denial notice, it's not necessary to hire an attorney. However, everyone is entitled to be represented if they wish to do so for some of the disability that I have here with with families of adult children or children approaching adulthood, with conditions like autism, which is quite prevalent today. Unfortunately, there's quite a spectrum involved in that. I have not looked at the five steps, but is one of those conditions got something to do with perceived IQ. So I can't say specifically that it does for autism. But I do know that when our medical examiners are looking at the claim, and they're looking at the at the medical evidence that is presented, IQ is taken into consideration. I don't know what the requirements are in order for an individual to qualify for Social Security based on the IQ score. However, that information is available in the blue book. So kind of a harrowing experience for some parents, because their son or daughter has a condition that affects their ability to socialize, you know, though they might be able to do many things, they're not able to hold on a job, which is kind of hard to prove. And then that does become an issue for some people. Yes, yes. When an individual does file for benefits, and a decision is made. If it is a denial, we send out a good note, we send out a denial notice. And in that notice there will be instructions on how to file an appeal if a person wishes to do So the most important thing to make note of is that in the appeal notice, it will say you have 60 days from the date of this notice to file that appeal. And individuals can file an appeal online, on our website, they can also call the local office, and they can request the paperwork be sent to them, and they can fill it out and send it back into the local office. What happens if for some reason, family emergency miscommunication, that 60 day limit is passed, we do have what we call good cause for late filing. So in certain circumstances, we are able to still accept the appeal and 60 days have passed their path. And it's going to depend on the circumstances. You know, if we did not have the correct address on file, if there was a family emergency or the individual filing within the hospital, something like that we can make an exception. If we are not able to make an exception, then a person would have to file the initial claim all over again. The next part is eligibility requirements for SSDI and SSI. Could you kind of explain what those are? Sure. So with the eligibility requirements, it's going to be different for each program. As you will find out as we go through the presentation today. The two programs are very different, the rules are different, which makes things even more confusing. The eligibility requirement. Again, the one thing that they have in common is that they have that same definition of disability in order to qualify. However, with the SSDI program, an individual has to have worked long enough and jobs covered by Social Security, or be a widow or disabled adult child of somebody who has worked long enough and jobs covered by Social Security with the SSI program. Again, this is a needs based program work is not a qualifying factor at all. We're looking at a person income resources in their living arrangement to determine eligibility and also the benefit amount with the SSDI program. That program is funded by FICA taxes. Generally those benefits are not affected by other income resources or living arrangement with the SSI program that is funded by General tax. tax revenues. Again, any changes in income resources living arrangement impact that benefit amount SSDI benefit amount is going to be based upon the level of earnings over working years. That benefit is paid on the third of the month on a Wednesday, and Medicare coverage starts after 24 months of entitlement. With the SSI program, the payment amount is going to be based upon a person's income and their living arrangement. The benefit is paid on the first of the month. And individuals that are entitled to SSI are immediately entitled to Medicaid. Question What is paid on the third of the month or a Wednesday, it's whichever comes first. It depends on the type of benefit. So for individuals receiving Social Security Disability Insurance, net amount is paid on or that benefit is paid on the third of the month, when we talk about the Wednesdays, that's going to be a different type of benefit. With our social security program. We have, you may have heard the acronym, our SDI, which stands for retirement survivor, disability insurance, individuals that are receiving the disability part are paid on the third of the month. For individuals that are receiving retirement benefits or survivor benefits, those are going to be paid on a Wednesday, and which Wednesday depends on the date of birth of the individual that's receiving the benefits. I'm sure there's a rationale behind that I would love to find out if like a mystery novel is why they why not making the same, there's there's got to be an actuarial reason for it, it escapes me. I was gonna say that with SSDI program and the SSI program, because they're so different. And the rules are so different. It's really important for us to know when we're talking to individuals, that type of benefit they're receiving, it may seem silly that we would include this when we're doing presentations about when the benefit is paid. But it's really important for us to be able to differentiate between the two. So if I'm talking to an individual, I'm out in public giving a presentation and afterwards the family comes up to me and you know, they say, you know, my son or daughter is receiving benefits and is thinking about returning to work, how is that going to impact their benefit? Without having the record in front of me, I need to be able to know what type of benefit their son or daughter is receiving, so I can give them the right advice. So I will say, well, do they get paid on the first of the month? Or do they get paid on any other first seven months, that I know, okay, their son or daughter received? benefits I got to put on my SSI cat so I can give them advice based on the rules and regulations of the SSI program. Okay, that's like Sherlock Holmes. Okay, well, that makes some sense. Now RSD I the reading I've done on that and my son is receiving our SDI but I'm not dead yet. When I read through that, instead of survivor's benefit of kept mentioning surviving widows, or or people with disability that were dependent upon the deceased SSDI is something that a child would receive upon the retirement death or disability of a parent who is receiving SSI. Before that, then they would receive SSDI. Can you explain? So when we talk about the our SDI program, that's kind of the big umbrella and then under our SDI is SSDI. So individuals that receive retirement benefits disability benefits, survivor benefits, there are benefits that are payable to the family. So for example, if I am receiving Social Security, retirement benefit, or I am receiving Social Security disability benefits, my spouse could receive benefits off of my record, and so could my children. In order for a child to receive benefits off of my record, whether it is retirement benefits I'm receiving or disability benefits I'm receiving, my child has to be under the age of 18 or under the age of 19. still in high school, and not married. Children may not qualify for SSI benefits when they're under 18 because mom or dad has too much income, or they have too many assets so the child doesn't qualify once the child turns Ah, Mom and Dad's income and assets No longer are counted. So we're just looking at the income and assets of that child. Well, they're not a child any longer because they're over eight. So I still call them a child. So once they're over 18, Mom and Dad's income and assets no longer count. So now they can qualify for SSI. Other instance where my child can receive benefits off of my record, if my child is not married, and is disabled before the age of 22. And that's what we call the DAC benefit, disabled adult child benefit. And for individuals that have been receiving SSI, my dad may not be old enough to be receiving retirement benefits at that point, once mom or dad files for retirement and become entitled to entitlement, that child that was receiving SSI, could then become entitled to benefits under mom or dad's record. And that benefit amount may be too high for them to continue to qualify to get the SSI cash benefit. However, remember, when somebody is receiving SSI, they're automatically entitled to Medicaid, which is a huge piece, they don't want their child to lose that SSI, because they don't want them to lose their Medicaid, which a lot of times is more important than actual cash benefit. But if that child was receiving SSI benefits, prior to the death benefit, they can keep their Medicaid, so they will no longer receive the SSI cash benefit, they're going to move to receiving the death benefit or mom on mom or dad's record, and still keep their Medicaid. And this falls under the Department of Health and Human Services, which is a completely different organization than Social Security. And our only involvement in that is really our computer telling their computer that this individual qualifies for SNAP Medicaid. So when they turn 18, they're a household within your household when it comes to what their expenses and income are. You don't include mom and dad's, their income is only their income, which is SSI. But that turns into SSDI when mom or dad retire or become disabled or die, then they start collecting SSDI on mom or dad's work record, they would start collecting SSDI on mom or dad's work record, if mom or dad were collecting SSDI so if mom or dad is collecting disability benefits, then it would be SSDI that is collecting retirement benefits or survivor or mom or dad had passed away. It's going to be a survivor benefit based on the child's disability based on the fact that the child has a disability before the age of 22. So this rst RSP? Correct. Okay, that that makes me feel much better. Because when I read about that about the deceased parent, I thought, Wait a minute, I'm I'm still feeling pretty good. I'm not there yet. So are SDI if mom or dad retire, but they weren't disabled? It's SSDI based upon the parents record if the parent was disabled, yeah.

Steve:

Beautiful. Thank you. So then we move on to Social Security Disability Insurance. For qualifying Someone has to have a reason to work history under some special rules that apply to younger persons who need less work to qualify. Could you explain how that works?

Hillary Hatch:

Sure. So again, to qualify for Social Security disability benefits, a person has to have worked and paid into Social Security. For younger individuals, they're not going to have as lengthy of a work record. So they may not qualify for Social Security disability benefits, or maybe they qualify, but the benefit amount isn't very much because they just don't have a long work history. So in order for a person to qualify, they have to earn what we call work credits. So when individuals are working and paying social security taxes, they can earn up to a maximum of four work credits each year. And to work credits are based on the total amount of wages or self employment during that year. That amount is going to be a little bit different each year. It usually increases a little bit each year. So these figures are for 2020 in for this year for each $1,410 in gross earnings. A person will receive one credit. Again, there's a maximum of four per year. So if a person makes a million dollars a year, they don't get more Work credits, they only get a maximum of four per year, but they got him on the first day of working, they can get them in the first day of working,

Steve:

right? If they're making that much money, they qualify immediately. Okay.

Hillary Hatch:

So the amount of work that is needed and the amount of work credits needed depends on the age at the time that the disabilities start. So for individuals that are disabled, before the age of 24, they need one and a half years of work, and a three year period before becoming disabled. And a lot of times, I will get a question asking, Okay, wait, wait, wait, what does that mean, my child has been disabled all their life, how many work credits do they need? in it, the minimum is six work credits, before the age of 24. For individuals that have been disabled, you know, all their life, the minimum that they need in order to be insured for Social Security Disability is six work credit. For individuals that are between the age of 24 to 31, they have to have work during half the time between age 21, and the time the disability began. And then for individuals that are 31 or older, work during five out of the 10 years before the disability began, we refer to this as being insured for disability benefits. You know, it's not something that I think a lot of people know about their insurance status. But if they want to know, there is a calculator for individuals that, you know, go online, and they they set up a what we call a my Social Security account, it gives them access to all of their personal information as it relates to Social Security, whether they're receiving benefits or not. So for an individual that is not receiving benefits, and they want to know about their work earning, if they're insured for benefits, they're entitled to what their spouse would be entitled to what their child would be entitled to. There are calculators available and that information is available online through their my Social Security account. And I want to mention somebody if somebody has not been on on the website for ssa.gov has got to be the easiest one to remember. It's quite robust, it works very, very well, it makes things that look complicated, seem a little bit easier to understand, now we used to mail out be the statements have a person's work history might be three or four pages long. I remember it being green, and white and individuals through their work history and make sure everything looks okay, make sure their earnings were posted. And we don't do that anymore. Since that information is online, my Social Security account, and there's plenty of safeguards in terms of accessing that information, too. They don't let you into easily you have to have passwords and everything else that makes the keeps your information confidential. Yes, it's very secure,

Steve:

the amount of the benefit is calculated how

Hillary Hatch:

the amount of the benefit is calculated, based on the entire work history of the individual. There is a actual calculation that I don't know it. Did, someone asked me, you know, well, how do you know like, how do you calculate it out? There's, what dividends are involved or, you know, all of that mathematical stuff, I wouldn't be able to tell you, I don't know. But there are worksheets that you can use. If you want to calculate it out by hand, you're able to do that. Or even if you use there is a calculator. If you go into the my Social Security account as well, there's a calculator where you can use to get that information about how the benefit is calculated. But the short answer is, the benefit is based upon a person's entire work history. For younger individuals who haven't worked a whole lot haven't paid into Social Security a lot, their benefit isn't going to be at high. And so there are many instances with younger individuals in particular, who qualify for a Social Security benefit, a low amount, maybe $200 a month or $300 a month, and they also qualify for SSI payments as well. So now you have someone who gets a benefit on the first of the month. If the benefit on the third of the month. They have, you know SSI and SSDI they're entitled to Medicare, and they're entitled to Medicaid. And let's say that they decide that, you know, they're going to go work part time. Now they have rules, different rules for the two different programs that they're receiving benefits from. So it definitely gets tricky. If they're collecting some SSDI based upon their own work record, and it's like 200, some dollars, their SSI is reduced by that $200. So they're not going to actually collect both and get more money than they would have with the SSI correct? Yes, that is correct. So with Social Security, disability benefits, the the amount that they receive over $200, we actually would subtract $20 from that, not really any good reason other than that's what Congress decided, and how to process the calculation. So we would take the $200, subtract $20. And the rest would be that $180 would be $1, for dollar reduction to the SSI benefit. And the primary thinking behind that, as has been explained to me is SSDI is based upon a premium you paid in so it's an insurance product, and SSI comes out of general revenue. So it's always the payer of last resort, whether it's for medical, or it's for income. So the next area is Medicare, we just been talking about income, but now we're gonna move on to the medical care. And can you explain how that works in conjunction with SSI and SSDI. So Medicare entitlement is for individuals that are receiving SSDI. And that Medicare coverage automatically begins after being entitled to disability benefits for 24 months. So we call it the 24 month waiting period. So for example, if the month of eligibility is January of 2015, the individual won't be entitled to Medicare until January of 2017. It's not something that a person has to apply for, if they are receiving disability benefits, we will automatically send out that Medicare card, it's usually about three months. Prior to when the coverage will begin. There is a couple of exceptions. For people who have permanent kidney failure requiring dialysis or a transplant, or have ALS, they actually can qualify for Medicare almost immediately. So they're the only exceptions to that 24 month waiting period. And when you qualify after 24 months for Medicare, Medicaid go away, and Medicaid will not go away. But it depends on the individual that is receiving Social Security Disability. If they have Medicaid, the Medicaid won't automatically go away because of the Medicare. When individuals are receiving both SSDI and SSI. That's what we call dual eligible. They're also dual eligible for Medicare and Medicaid. When an individual is only receiving SSDI, or social security disability, they're going to get Medicare. But not until that 24 month waiting period is up. They could possibly receive Medicaid. However, it's not an automatic entitlement, like it is with someone who is receiving SSI. So they would actually have to go to the Department of Health and Human Services and file for Medicaid to see if they would qualify. Once they're entitled to the Medicare 24 months later that Medicaid doesn't automatically and but it's going to be up to the state to decide whether it will continue. I'm sure there's lots of other qualifying factors that go into play in regards to the type of coverage an individual would receive with Medicaid. Let's take for instance in my son, he was on SSI, until I retired. Then he started collecting our SDI from my work record. And then after two years of disability, you've enrolled with Medicare, so he's dually eligible for Medicare and Medicaid. As I understand it, the reason for that, again is like the SSDI and the SSI Medicaid pays second and Medicare pays first. Yes, in your example with your son it, he remained eligible for Medicaid because he was first receiving the SSI and then once he became entitled to benefits on your record. That's that Dak benefit that Medicaid carries over with him and he's entitled to Medicare and remains eligible for the back Medicaid. If that's not confusing enough. I guess sometimes it has to be. The next thing is benefits for family. Do you explain benefits for family please? Sure. So for individuals that are receiving benefit, Social Security, retirement benefit bid for Social Security disability benefits, members of their family may also qualify for benefits off of their record, the person that is receiving benefits, so let's say I am receiving disability benefits, my spouse could get benefits off of my records. Once my spouse is age 62. Or my spouse can receive benefits off of my record, at any age, if my spouse is caring for a child under 16, or a disabled child. Also divorced spouses could qualify off of the record as well. And that I believe they were married for 10 years as the qualifying factor before the divorce. Correct. 10 years when you look at your statement and make mentions a maximum family benefit, but if your ex is able to claim your Social Security, it doesn't affect your your maximum family benefit. That is something in addition to the maximum family benefit. That is correct me if my ex is receiving benefits off of my record, it is not going to impact or reduce any of the benefits that I would receive for myself or my family. Which is one of the reasons that I might explain why so security is in trouble. When it comes to paying out. I don't think the actuaries ever had all this in mind when they started it.

Unknown:

Well people just don't stay married as long as they use to

Hillary Hatch:

we know what's wrong. I like the old fashioned way. I've been married for 35 years now. And it's great. And with a child that's not married under the age of 18, under 19 are still in high school and not married and disabled before age 22. That's a little confusing, could you kind of clarify that. So again, if I'm the person that's receiving benefits, if I'm receiving disability benefits, if I have children that are under 18, and they're not married, they can receive benefits off of my record, they can continue to receive benefits up to age 19. As long as they're still in high school, once they are age 19, they no longer can get benefits on my record, whether they're in high school or not. If I have children that became disabled before the age of 22, they can also receive benefits off of my record. So sometimes there are instances where an individual is receiving benefits, and their child receives benefits off of their record, just for the fact that they're under age 18. So if I'm, if I'm getting benefits, and I have a child know that 1617 whatever age under 18. And receiving, they're receiving benefits off of my record, just for the fact that they're a minor child, but my child also happens to be disabled. Once my child turns, age 18 those benefits can be converted to my child receiving benefits as a DAC as a disabled adult child. It's not an automatic process. So it is something that I have to would have to apply for, for my child to receive those benefits.

Steve:

Another related question popped into my mind, but if you got a mom and a dad whose earnings are very different, and let's say in this case, it is as many cases today. The mom is making more money than the dad, but the dad retires first. In that situation, the disabled child would receive retirement benefits off dad's work record. Correct.

Hillary Hatch:

I didn't follow you on that, can you repeat that?

Steve:

You have a mom and she's making $100,000 a year and dad's making 75,000. Dad retires first and they have a disabled adult child living at home. That child was start receiving benefits off of the dad's work record because he retired. Yes,

Hillary Hatch:

Yes, that's correct.

Steve:

What happens when mom retires as a does it get adjusted upward?

Hillary Hatch:

Yes, when mom retires, then we are going to see which benefit is higher for the child so the child will not receive benefits off of mom and dad's record, that child will just receive benefits off of whomever record is going to give him or her the higher benefit amount

Steve:

at the time that they retired

Hillary Hatch:

at the time that they retire.

Steve:

And then SSI what is supplemental security income. This is slide 14.

Hillary Hatch:

With the SSI program, the Supplemental Security Income program, it pays monthly benefits to individuals with limited income and resources for individuals that are age 65 or older, or blind or disabled at any age. And again, it's a needs based program. The maximum monthly benefit amount for this year is $783. So that's the maximum monthly benefit that we pay to anybody that is receiving SSI, that amount increases usually a little bit each year. So it's different than the SSDI program. Under the SSDI. program, the benefit amount is different for everyone because it's based on their own work record. With SSI, that payment is the same across the board for everyone. $783 per month is the maximum. And there are factors that are going to change, or could possibly change that benefit amount.

Steve:

Work factors.

Hillary Hatch:

So there are there are work factors, we also look at resources. And we also look at living arrangements as well, for resources or assets, we call resources, things that would be included in the resource limit. And that resource limit for an individual is $2,000. And for a couple, it's $3,000. So the things that would be included towards that resource limit would be bank account, stocks, bonds, 401, K's a second vehicle, life insurance, and property other than where an individual resides, things that we exclude from the resource limit would be the home in which the individual resides, we will exclude one vehicle, we exclude burial plots for Self and Family, and then some additional resources that are set aside for burial. And then we also exclude ABLE account up to $100,000 in an ABLE account would be excluded from that resource limit.

Steve:

And for some people, that resource limit is also referred to as a countable asset that I hear attorneys use that term. And then also the assets that are in a qualified special needs trust are excluded.

Hillary Hatch:

Yes that is correct.

Steve:

A mom that I know from Grand Haven has as a question,

Guest Question:

my child is over 18. And we set up a third party special needs trust for him, he has no access to the funds in the trust, they can only be withdrawn by the trustee at the trustee sole discretion. What information about the trust, if any Am I required to provide to Social Security.

Hillary Hatch:

So it's going to depend on the type of benefit that the individual is receiving. So for individuals that receive SSDI, or our SSDI benefits from a parent's record, we don't need any information regarding the trust, it's not going to be a countable resource for us, because we're not in order to qualify for SSDI or our SDI, there is no resource limit. So if a person is getting SSDI benefits are our SDI benefits, we don't even ask about it, we don't have to know about it, it's not going to impact their their benefit at all. But for individuals that are receiving SSI, we will need information regarding that trust. And we are definitely going to need a copy of the actual trust, we're also going to need to know who established the trust. And we need to know if there was legal authority to do so we also need to know how the trust was funded. And any related documentation, we need verification of the the amount in the trust, we would need to see bank account records or financial statements of some sort that show how much is in the trust. And the trust is, is different. And how the review process works at the Social Security Office is if somebody has a special needs trust setup, they have to submit the documentation to the local field office, the technician there will review the trust make a decision whether or not they can be excludable. And then they submit that to our regional office, which is our regional offices located in Chicago and a specialist out of the regional office takes another look at that and either agrees with the technician or disagrees with the technician and will document the reasons why. So there is a two step process in the trust review that we use at the local field office. So when it comes to SSI, in order to qualify as a third party special needs trust, in order to qualify for that trust to be an excludable asset. There are some special wording that has to be in the trust, the individual cannot have access to the funds, they cannot be able to revoke the trust. We also look at what we call the Medicaid payback language that also has to end the trust. So the trust must state that Upon the death of the beneficiary, any remaining funds would go to pay back the state of Michigan or any other state that has provided medical coverage through the Medicaid program.

Steve:

Yeah, and I believe is for first party trust. It's if it's the individuals money if mom and dad leave the money To the trust is a third party and that case is not a payback. But if grandma left Johnny $10,000, they'd have to establish that first party trust, which is payback. But in both cases for a first and a third party, I believe it's an excludable asset.

Hillary Hatch:

Yes, yes, you are correct. I missed a third party. pretty important. First, there's

Steve:

no fourth party trust, at least think there's not a fourth party trust that I know. And Mandy from Grand Haven has a question that has to do with resources here or actually for for benefits payable to family.

Mandy:

My husband is a police officer for a local department and he does not pay Social Security tax on his paycheck. When he retires. I am wondering if my son who is on SSI, will still be able to pull his SSI or if he will have to switch to taking my Social Security benefits. Instead, My social security benefits will be lower than my husband would have been because my income is lower than his.

Steve:

And for me to add to that to the mom would have to retire first in order for the son to get her retirement benefits. Am I correct in that?

Hillary Hatch:

Yes, you are correct on that. Because SSI is a needs based program. An individual receiving SSI is required to file for all other potential benefits, if her son will be entitled to benefits on her record will be required to file for those benefits, but not until she filed for her social security retirement benefits. And his SSI payment they may be reduced or stopped depending on the benefit amount you will receive from her record. If the benefit amount you receive makes him ineligible for that SSI cash payment, you will still remain entitled to Medicaid. Again, that's the back Medicaid that we have talked about. But in regards to the statement about her husband being a police officer for a local department and doesn't pay social security taxes, that doesn't have any impact on her son's benefit. And less if her son is receiving SSI, and he was going to draw some sort of benefit off of his dad's pension or disability payment or whatever it is, that would be counted as on earned income to the sun if the sun is receiving something. And so that could impact his SSI benefit.

Steve:

So best thing to do is look at the contract that the police union has with a municipality to find out if there is any benefit. These kind of stuck on SSI until my retires for the most part. What is earned and what is unearned income.

Hillary Hatch:

So for the SSI program, we have the two different categories of income because they impact the benefit differently. Basically, earned income is any income from working. And then on earned income is basically any other source of income not from working. So it could be other social security benefits or unemployment benefit. Veterans Benefits, insurance, pension, pretty much anything any sort of income an individual receives.

Steve:

That would include things like gifts or gift cards or, but non cash gifts are okay, if someone buys them a new stereo or some kind of electronic gadget that's not income whatsoever, correct?

Hillary Hatch:

Yes, that is correct. So if it's your son, or daughter's birthday, and grandma and grandpa gave him $50 in cash, that would be counted as unearned income made by him a vehicle, the value of the vehicle isn't going to be counted as

Steve:

income. That's good advice for that grandchild to say to grandma and grandpa as you need to buy me a car because at $50 is part of my income if you give it to me, right,

Hillary Hatch:

exactly.

Steve:

Obviously earned income or wages and self employment and whatever they make on the side or through a job. That is living arrangements. And there is a question for this one. Jim from jennison asks, Can you explain the benefits of charging rent?

Jim:

And how do you calculate your monthly expenses? And what do you need to show for proof?

Hillary Hatch:

I think it's a really great question. And it comes up pretty frequently when we're doing presentations for a lot of parent groups that we work with. And in order for a person to receive a benefit that is not reduced due to the living arrangement, an individual must pay his or her fair share of the rent and household expenses. So we have to establish rental liability, meaning that an individual is living in his or her own household, and there is liability to the landlord for payment. So when it comes to room rental in a private dwelling, in order to have rental liability, an individual must be in a separate household from the landlord, which we really don't see that very often as it's not common for the separate households to exist more often. Often what we see is that a flat fee for food and shelter is established. So this is a variation of separate room rental within a private dwelling. The beneficiary maintains a separate household from the landlord and pays a flat fee for food and shelter, the landlord can set the amount at whatever he or she sees fit. But if the landlord and renter are related, such as a parent child relationship, and the landlord would charge a non relative a different amount, that difference will count as income to the beneficiary, and then a lower SSI payment would result. So for example, if your child is over 18, and is living with you filed for SSI, and has been approved, we will do a review just to update all the information. And one of the sections on that review is we ask questions about living arrangement. So if your child is living with you, and not paying their fair share of rent and household expenses, their SSI is going to be a reduced benefit. If you are charging your son or daughter rent, our next question is going to be okay. In the amount that you come up with with a flat fee. It can be any amount as you see fit. So you can tell us $500 $600 $300 but then we're going to ask is this the amount you would charge a non relative? And if the answer is no, you're charging your son or daughter $400. But you would charge a nine relative $600 that $200 difference is going to be counted. In effect, it's counted as income to your child, so their SSI benefit amount is going to be reduced. Because of that, the proof that we need, it's going to vary for each situation. Most often, the representative at the local field office can obtain information from the landlord, which would be mom or dad over the telephone. And we can just document the case by talking to mom or dad over the telephone and then answering our questions. However, additional information may be needed, such as a rental agreement, which would be a lease for receipts for the child paying rent. Most often, though, just that verbal communication over the telephone and us documenting the case is going to be enough to show that rental liability exists. And then the benefit would not be reduced based on a living arrangement.

Steve:

Now I know of parents who have kind of complained a bit about having to submit heating bills and electric bills and everything to do with the upkeep and maintenance of the house to take that number and divide it by four or five depending on how many residents are in the house to find out what the fair share is when my son who is now 30 to 30. Getting SSI, we just tried him a fixed amount that we would charge anybody living in the house, how is it determined that you are charging a reasonable amount,

Hillary Hatch:

so it's really going to depend on the situation and it's gonna depend on the conversation that takes place between the technician and the landlord, which is mom or dad is when it comes to a flat fee amount. So the flat fee is for food and shelter. It's really whatever the landlord decides, if mom or dad tells us No, we're going to charge our son $200 per month as a flat fee. And this is the same amount we would charge a non relative there is nothing in policy telling us as an agency or telling that technic and that's not acceptable. It really is whatever mom and dad the landlord sees as an amount. And the key is that it's the same amount they would charge a non relative

Steve:

this should be in writing. Writing is still is valid to say that, okay, my son's receiving $783 a month we're gonna charge $400 for room and board and have that into an agreement. And if you have that agreement, if appropriate, have your son sign it or if your guardian sign it, that should suffice to present that to social security to prove that rent is being charged.

Hillary Hatch:

Correct.

Steve:

Then the next area SSI benefits for children under the age of 18.

Hillary Hatch:

benefits for children, the eligibility factors are pretty similar to that of the adults. So we have talked about living arrangements or we've talked about assets, we've talked about income, those all impact the benefit for children under 18, better receiving SSI as well. The major difference is that definition of disability, it's still very similar though. So for children under age 18. We defined disability as having a physical or mental impairment or combination that results in marked and severe limitation in functioning and that condition must be expected to last at least 12 months or result in death. So we don't have the differences that we don't have that work.

Steve:

Yeah, amount of income and assets are going to depend upon the family. situation to me, there's a lot of variables involved in that determining whether the family meets the requirements for SSI for their child, correct?

Hillary Hatch:

Yes, yep, we're looking at the income and assets of that disabled child in the household, and then also of the parents that are living in the household. And we actually call that the process of feeding. So deeming applies when that child is under 18. And they're living at home with his or her natural or adoptive parents, meaning that the month after the child turned 18, so even if that child is still live with mom and dad, they're in the same household once they turn 18, the month after that mom and dad's income and assets would no longer count as the child.

Steve:

Okay, so at that point, we have the independent household living within the household, so to speak, when it comes to reporting. And I think that has become a problem for a number of parents I have talked to over the years where they get the questionnaire, and it's addressed to their child. But it says, who lives in your household. And so they put down six people, because there's six people in the house, but it's the household of the child, which is one.

Hillary Hatch:

So once that child is 18, it's like the child is in their own households, their own

Steve:

separate household, and that's a real struggle, can Sakuya read the paperwork? It says, you know, Johnny, who lives with you? And the answer is, I live by myself, but I live in this house. So I always have told people just pretend like he's got a separate duplex. It's right next to you, and it's not connected to you. He's a household within a household. And I've also been telling him right, one more thing I wanted to bring up, you cannot bring a power of attorney into a Social Security Office.

Hillary Hatch:

Yes, that is correct. So we do not recognize power of attorney. However, if you are the legal guardian, we do recognize that guardianship.

Steve:

Welcome to the unlucky chat cafe. For those of you who are skilled in voice recognition, you probably realize that I am not carrying during the previous interview, Hillary has used the phrase spousal benefits one time too many and Carrie decided to file a claim she wanted the night off. Being the wise old man that I am I granted her request, we will have a comprehensive cafe chat with an extra shot of caffeine after the Social Security episode next week. But we still have credits to share with you. It takes approximately four to six hours of work to complete all the phases of production for 145 minute and Locky podcast episode. I could not do this alone. I want to thank my lovely wife and co hosts Carrie. I also want to give credit to Alex, our producer who tracks our stages of production, and is always coming up with better and more efficient ways to produce the show. Then there is Daniela Munoz, our intern who manages post production communications with our guests, among other miscellaneous assign tasks. Also, last but not least, we have Holly Johnson, our website designer and artistic director of the show. But more than anyone, we all want to thank you for listening. As a reminder, we asked you to support our show and one or more of the following three ways. refer us to your friends. This is easy to do, simply forward to them a link to this podcast or ask them to Google and l a wki.com. Number two is subscribe on your favorite podcast platform. And number three, become a sustaining [email protected] slash and lucky Thank you