More Compassionate Allowance Eligibility
In 2018, The Social Security Administration grants disability benefits to applicants who have been diagnosed with certain terminal or debilitating medical conditions that, by definition, meet Social Securitys standards for disability benefits. Disability applicants who have a condition that qualifies for a compassionate allowance, may receive expedited processing of their disability claims.
In August, the Social Security Administration announced that twelve more conditions had been added to the list of medical diagnoses that qualify for compassionate allowances. They are:
If You’re Not Sure Why You Received A Payment
Contact the authorizing agency directly to find out why they sent the payment. You may be able to find the authorizing agency in the memo line of the check. View this diagram of a sample Treasury check to help you locate the authorizing agency contact information on your own check. Scroll about half way down the page to see the diagram.
If you’re unable to find which agency authorized the payment, . They can help you determine which government agency you need to contact. To find which RFC you need to call, look for its city and state at the top center of the check.
Use the Treasury Check Verification System to verify that the check is legitmate and issued by the government.
Consulting With A Social Security Attorney
Social Security can be complicated and very intimidating to apply for. It is also vital that everything is completed correctly so that your chances of receiving benefits are their highest.
To maximize your potential to receive benefits, consider getting assistance from a Social Security attorney. Their expertise in filing paperwork and presenting cases can make all the difference you need to qualify for the benefits you deserve.
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Report The Death Of A Social Security Or Medicare Beneficiary
You must report the death of a family member receiving Social Security or Medicare benefits. The Social Security Administration processes death reports for both. Find out how you can report a death and how to cancel benefit payments. In addition to canceling SSA and Medicare benefits, find out what other benefits and accounts you should cancel.
A Special Rule For Early Retirees
Image source: Social Security Administration.
Interestingly, there’s a special rule that applies for those who become disabled and then apply for early retirement benefits under Social Security. If you became disabled, started collecting early retirement, and then had your disability application approved by the SSA, then you’ll continue receiving your Social Security retirement payments, but you’ll also get disability benefits that are enough to bring you to the full amount of the monthly payment you’re entitled to receive. Moreover, when you reach full retirement age, you’ll receive full retirement benefits as if you had never filed for early retirement benefits.
Note well, though, that this doesn’t apply if you were already collecting early retirement benefits before you were disabled. In that case, you’ll receive disability payments, but your retirement benefits at age 66 will go back to their reduced amount based on your having started collecting them early.
In general, most Americans receiving disability benefits won’t face the huge financial challenges they fear once they reach full retirement age. Continuing to get payments at their previous level isn’t always the perfect solution, but it’s far better than losing benefits entirely.
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How To Receive Federal Benefits
To begin receiving your federal benefits, like Social Security or veterans benefits, you must sign up for electronic payments with direct deposit.
If You Have a Bank or Credit Union Account:
- Call the Go Direct Helpline at .
If You Don’t have a Bank or Credit Union Account:
- Direct Express debit card – a pre-paid debit card. Get help by calling the Go Direct Helpline at .
Make Changes to an Existing Direct Deposit Account:
Learn how to make changes to an existing direct deposit account. You also may contact the federal agency that pays your benefit for help with your enrollment.
Electronic Delivery Of Disability Payments
As of March 1, 2013, Social Security stopped mailing paper checks. Beneficiaries are now required to receive their monthly payments electronically.
If you are still receiving paper check, the SSA will probably switch your payments to electronic delivery by signing you up for the Direct Express Debit card.
There are two ways you can receive your benefits electronically:
Direct deposit of your disability payment: This option deposits your payment into your bank account on the day you are paid.
You need a checking or savings account with a bank or credit union to use this option.
Direct Express Debit Card: If you do not sign up for direct deposit, your benefits will be paid to you via Direct Express debit card option.
The Direct Express debit card works anywhere Debit Mastercards are accepted.
You can also use your Direct Express debit card to make purchases and also get cash back at the grocery store or to purchase money orders at the post office.
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Beneficiaries Received A 13% Increase
For 2021, nearly 70 million Social Security recipients are seeing a 1.3% cost-of-living adjustment to their monthly benefits. The adjustment helps benefits keep pace with inflation and is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers as calculated by the U.S. Bureau of Labor Statistics . If the CPI-W increases more than 0.1% year over year between the third quarter of the previous year and the third quarter of the current year, then Social Security will raise benefits by the same amount.
The 1.3% bump for 2021 compares with the 1.6% COLA for the previous year . In 2019, the COLA was 2.8%, the largest increase since 2012. For the average Social Security recipient, the 1.3% raise amounts to just $20 per month on an average monthly payout of $1,543 vs. $1,523 in 2020.
How Your Ssdi Payments Are Calculated
The severity of your disability will not affect the amount of SSDI benefits you receive. The Social Security Administration will determine your payment based on your lifetime average earnings before you became disabled. Your benefit amount will be calculated using your covered earnings. These are your earnings at jobs where your employer took money out of your wages for Social Security or FICA.
Your SSDI monthly benefit will be based on your average covered earnings over a period of time, which is referred to as your average indexed monthly earnings . The SSA uses these amounts in a formula to determine your primary insurance amount . This is the basic amount used to establish your benefit.
SSDI payments range on average between $800 and $1,800 per month. The maximum benefit you could receive in 2020 is $3,011 per month. The SSA has an online benefits calculator that you can use to obtain an estimate of your monthly benefits.
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How To Lose Ssdi Benefits
The commonest reason why the SSA would stop a persons Social Security Disability payments is because the recipient has gone back to work, even though this isnt always the case. If you go back to your normal job when in receipt of SSDI benefits the SSA will decide if you are taking part in substantial gainful activity .
The key factor in deciding if work is considered to be SGA is the amount someone is paid. In 2020, somebody is typically considered to be engaging in SGA if his/her earnings exceed $1,260 or $2,110 for someone who is blind.
For example, if you are earning $200 weekly in a part-time job, you are not working above the SGA limit. If you are spending a lot of time at work but what you are doing constitute SGA despite the earnings being below the SGA threshold you could have your SSDI stopped.
However, if you are working and make over SGA you can be entered into a trial work period. This period allows somebody who is receiving SSDI benefits to try to go back to work without being told they will lose their SSDI eligibility.
In the majority of cases, you should be able to work for up to 9 months during a trial work period and you will still continue to receive your SSDI regardless of the amount you are earning. When the trial work period comes to an end and you are still taking part in a job earning above the SGA level the SSA is likely to decide you are no longer disabled so your Social Security Disability payments will stop.
How The 2021 Changes Will Affect Social Security Benefits
Heres how this changes the benefits and reductions if we look at filing at the earliest age and at the latest age.
Currently, the SS filing window is between 62 and 70. You cant file before 62 and it doesnt make sense to file after 70.
So, for those born between 1943 and 1954, the FRA is 66, you are entitled to 100% of your benefit.
You can file as early as 62, but youll only receive 75% of your benefit. If you file at 70 youll receive 132% of your benefit. Once the FRA starts moving up, it all changes.
Youll still be able to file at 62, but youll only receive 70% of your FRA and if you delayyour benefit will increase to 124% instead of 132%.
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Getting A Social Security Number For A New Baby
The easiest way to get a Social Security number for your child is at the hospital after they are born when you apply for your childs birth certificate. If you wait to apply for a number at a Social Security office, there may be delays while SSA verifies your childs birth certificate.
Your child will need their own Social Security number so you can:
- Claim your child as a dependent on your income tax return
- Open a bank account in their name
- Get medical coverage for them
- Apply for government services for them
Keep your Social Security card in a safe place to protect yourself from identity theft.
Social Security Disability Benefits To Rise By Only 13 Percent In 2021
- By Andy Jones
Social Security disability recipients will see an increase in benefit levels for 2021, although the rise will be the smallest in years due to the economic downturn caused by the COVID-19 pandemic.
On October 13, the Social Security Administration announced that Social Security benefit levels will increase by just 1.3 percent in 2021, compared with 1.6 percent in 2020 and 2.8 percent in 2019.
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Theyve never been this low for this long a period in the history of Social Security, Mary Johnson, Social Security policy analyst for The Senior Citizens League, told CNBC.
For recipients of Supplemental Security Income , Social Securitys primary disability benefits program for low-income people, monthly benefits will edge up from $783 to $794 for individuals, or from $1,175 to $1,191 for couples.
For recipients of Social Security Disability Insurance , Social Securitys primary disability benefits program for people with longer work histories, average monthly benefits will increase from $1,261 to $1,277.
The day after the 2021 increase was announced, two House members introduced legislation to raise next years COLA to 3 precent.
This absolutely anemic COLA wont even come close to helping afford even their everyday expenses, let alone those exacerbated by COVID-19, Peter DeFazio wrote in a news release.
Click here to read an SSA fact sheet on the upcoming changes for 2021.
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Aero Recalculation Of Benefits
The second way to raise your PIA is by recalculating your benefits so you receive credit for previously un-credited earnings. This process automatically happens twice each year and is called an Automatic Earnings Reappraisal Operation recalculation. Heres how it works: When you start getting disability benefits, the SSA calculates your payment amount using the previous years earnings. This is typically based on your tax information or other documents submitted with your initial application to verify your earnings. Every year you qualify for SSDI benefits, the SSA compares how much money you earned the year before your disability began as well as the prior years earnings. These numbers are automatically reviewed to determine if any prior years earnings make you eligible for increased monthly Social Security disability payments.
These AERO recalculations happen automatically every March and October. If you qualify for higher Social Security disability payments from an AERO recalculation, youll get a notification by mail about a month later. Your next Social Security disability payment should reflect this increase as well as any retroactive benefits youre owed.
What Happens With Social Security Disability Recipients At Retirement Age
The Social Security Administration recognizes that concern, and it takes into account the impact that disability has on income potential. Specifically, as the SSA spells out here, when you reach full retirement age, if you’re still receiving disability benefits, then they automatically convert into retirement benefits. However, even though they’re technically paid out of a different part of the Social Security program, the amount remains the same as it was before, based on the formulas that govern how much you received in disability benefits. In essence, for disability recipients, Social Security ignores the 35-year work history rule and only considers work history prior to disability.
In addition, even if you’re not disabled at the time you retire, many individuals qualify for what the SSA calls a “disability freeze.” By applying for the disability freeze, you can ask Social Security to ignore your periods of disability in their calculations for retirement and survivors’ benefits. That in turn makes sure that you’re not penalized for those zero-earnings years even if you’re able to overcome your disability and return to work later in your career.
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Earn Ssa Work Credits In Some Countries
You may not have enough credits from your work in the United States to qualify for retirement benefits. But, you may be able to count your work credits from another country. The SSA has agreements with 24 countries. If you earned credits in one of those countries, they can help you qualify for U.S. benefits.
Tax On Social Security Benefits
You may have to pay taxes on your Social Security benefit, depending on your income level. If your retirement income is over a certain amount, then part of your Social Security benefits may be taxable.
Single-filers with an income between $25,000 and $34,000 will have to pay income tax on up to 50% of their benefits. If they make more than $34,000, then up to 85% of the benefits may be taxable.
Keep this in mind when filing your tax return. You may also be able to withhold your taxes from your Social Security benefits payments, so you arenât stuck with a large tax bill on Tax Day. Check your SSA account online or visit your local Social Security office for more information.
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The Source Ofand Solution Tothe Problem
When the current Social Security formula was put in place in 1977, no provision was made for the contingency that economic conditions would be so dire that average wages would fall in any given year. This problem first surfaced in 2009 during the Great Recession. The AWI, however, fell by a relatively small amount, and policymakers chose not to do anything about it. As a result of the COVID-19 pandemic, however, the decline in the AWI is likely to be about four times as big now as it was during the Great Recession.
There is ample precedent for fixing this problem. The first precedent concerns Social Security cost-of-living allowances . As mentioned above, payments in years after beneficiaries first year of retirement are indexed to inflation using a version of the consumer price index . However, under the law, if prices fall in any year, benefits are not adjusted downward rather, they remain the same. The second precedent concerns the Social Security contribution and benefit base, also known as the taxable maximum. The taxable maximum is the dollar amount of annual earnings above which the Social Security payroll tax does not apply. The taxable maximum is indexed to the AWIbut like COLAs, it is never adjusted downward.
Increases In Monthly Benefits
Every year, the cost of goods and services tends to go up, at least a little bit. Fortunately, the Social Security Administration accounts for this and makes a cost of living adjustment to monthly benefits. The COLA is done to try to ensure disability recipients can buy just as much with their benefits as they did this year. The SSA reviews the consumer price index to help determine an appropriate increase.
In 2021, approximately 70 million people who receive Social Security Disability benefits, including Supplemental Security Income benefits, will see their benefits increase by about 1.3 percent. This is just below the average annual increase the SSA has made over the last 10 years .
Next year, the average monthly payout for Social Security Disability Insurance recipients will increase from $1,261 to $1,277. The average monthly payout for SSI benefits for individuals will increase from $783 per month to $794 per month. The average monthly payment will increase from $1,175 to $1,191 for couples.
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How Are Back Payments Made
If you are approved for SSDI only, you’ll most likely receive one lump-sum payment for the entire amount of your backpayments.
If you are approved for SSI, or SSI and SSDI, the rules are different. Social Security generally pays the past-due benefits for SSI or combined SSI/SSDI in three equal installment payments that are separated by six months each. However, you are eligible for larger first and second installments if you need funds for necessities or to pay off debts for necessities. Or, you may be eligible for one lump-sum payment if you are not expected to live past the next 12 months or you are no longer eligible for SSI benefits at the time you receive your backpay . For more information, read our article on lump-sum payments of backpay.
To learn more about disability backpay in general, see Disability Secret’s section on Social Security disability backpay.