Social Security FAQs « FAQs
(Including SSI and SSDI)
We are teachers and advocates, and as a part of that process we frequently answer questions from our clients — so we started collecting our Frequently Asked Questions. We are collecting and sharing them with you by topic and hope these are helpful to you.
Please feel free to email Patti at firstname.lastname@example.org if you have a follow up question or comment. We'd also like you to let us know what you think of this new feature of our website.
KEEP IN MIND THESE ARE GENERAL QUESTIONS AND CANNOT BE CONSIDERED LEGAL ADVICE OR THE BEGINNING OF THE ATTORNEY-CLIENT RELATIONSHIP.
We have redacted names to protect the innocent! Sometimes they are posed in a give and take format because they were developed through an email exchange or a list serve discussion.
(Note: questions are not edited for spelling, grammar or content.)
Facts: SSI allows the recipient to own a home – no problem. The home was owned by recipient’s parents and funded into their trust, which provided SNT for son. Both parents have now died, and there are other surviving children.
He is a 54 yo man that suffered a stroke a couple of years ago. He has been unemployed for many years, living w/ his parents, and never accumulated enough QC to qualify for SSD. He was getting a 1/3 reduced benefit for living at his parents’ home, who provided food and shelter, and his max benefit now would be $698 (and I believe a $14 state supplement). Unfortunately there is not a real large amount of money involved w/ the SNT so we are trying to maximize or stretch out the funds as long as possible for him. The 1% was contemplated as a means to allow him among other things to claim the homestead exemption, lower insurance (rather than having a higher premium for a “rental”) and also to try and protect the home from his creditors.
Question: If trust elects to convey a 1% or very minor interest in home to son, as opposed to his having gone out and purchased a home, will SSA consider that conveyance as the trustee providing the recipient with shelter and therefore deem it “unearned income”?
Answer: He can qualify for the homestead without doing that. They changed the definition to allow a trust for the benefit of a person with a disability to qualify as a person under the statute and claim the homestead. Further, you can rent it to him under a rent-to-own or land contract and then it will qualify for a homestead either way and you can maximize SSI; especially if you need another person living in the house as staff or to share staffing cost. Patti
- Question: My child was awarded monthly SSI benefits but cannot manage money. Can I handle his SSI money for him?
- Answer: You can request to be selected as Representative Payee for his SSI benefits. Social Security Administration (SSA) will pay you your child’s benefits to use on his behalf. Use Form SSA-11 and return it to your local SSA office to request to be named Representative Payee.To protect the beneficiary’s funds, the checking or savings accounts title must reflect the beneficiary’s ownership of the funds and your relationship as a fiduciary (financial agent). Neither the representative payee nor any other third party can have ownership interest in the account. The beneficiary must never have direct access to the account. Any account title (under state law) that shows beneficiary ownership of the account with you as fiduciary is acceptable. Do not use joint accounts. Here are two ways SSA recommends to title the accounts:• “(Beneficiary’s name) by (your name), representative payee.”• “(Your name), representative payee for (beneficiary’s name).”Each year, Social Security will ask you to complete a form to account for the benefits you have received. Social Security will mail you a form. You can either fill out the form and return it to Social Security or go online at www.socialsecurity.gov/payeeto file the report.You can sign up for direct deposit of the SSI benefits checks to the Representative Payee bank account online or complete Form 1199a and mail or take to your local office.More information: A Guide to Acting as Representative Payee, and FAQs for Representative Payees.
Maria Messina – PEKD & Associates
- Question: I have a client whose adult son receives SSI benefits. Mother plans to purchase a house jointly with her son, where he will reside alone. He does not have enough benefits to pay for the entire mortgage and utilities. My question is whether or not mother can pay half of the mortgage payment as she is one half owner, with her son paying the other half and all utilities, or will this be deemed a payment for his support and thus income? Or would it be better to put the house in his name alone and have him pay all of the mortgage and she pay the utilities? I think payment of utilities is also deemed support. Mom wants to help but doesn’t want to have his benefits affected.
- Answer: It would be easier to have her own it and put it in a trust. Then have her son pay rent to the trust with a rental agreement. That way SSI will not be reduced for her paying for in kind support. The trust can continue to own it (if drafted correctly) after mom dies and maintain the situation for him. There is a provision in the property tax code that allows a trust that is for the benefit of a beneficiary with a disability to qualify as a person for the homestead. The beneficiary of the SNT is considered the owner of the property for purposes of the homestead exemption pursuant to MCL 211.7dd (vii): “The sole present beneficiary of a trust if the trust purchased or acquired the property as a principal residence for the sole present beneficiary of the trust, and the sole present beneficiary of the trust is totally and permanently disabled. As used in this subparagraph, "totally and permanently disabled" means disability as defined in section 216 of title II of the social security act, 42 USC 416, without regard as to whether the sole present beneficiary of the trust has reached the age of retirement.”
Hope this helps.
Note: for more information related to housing options for people with disabilities, see Community Housing Network.
- Question: I have had several clients lately who have been hit with an SSI overpayment due to access assets. The parents have been fronting a lot of expenses for their adult child (in one case they paid for expensive stem cell therapy trips to Russia). What are the rules for the child to repay the parent for these trips after the fact, in order to get below the $2000 asset limit? Must there be a contemporaneous promissory note to show the debt, in order to avoid a finding of divestment?
- Answer: Nope – I do it all the time. Do an affidavit in lieu of receipts if there are no receipts. Let me know if I can help. Patricia E. Kefalas Dudek
- Question: Who is Eligible for Social Security Disability Benefits?
- Answer: Not everyone who is unable to work because of illness or injury is entitled to Social Security disability benefits. Only those suffering from long-term, severe disabilities may receive benefits.
(From Shifrin Newman Smith, Inc.) click for entire article.
- From The Seattle Times:
- Question: Why is there a five-month waiting period for Social Security disability benefits?
- Answer: By law, Social Security disability benefits can be paid only after a worker has been disabled continuously throughout a period of five full calendar months. The first benefit paid is for the sixth month of disability and is paid in the seventh month. This waiting period ensures that we pay benefits only to persons with long-term disabilities and avoid duplicating other income protection plans (such as employer sick-pay plans) during the early months of disability. To learn more, read Social Security's online publication, Disability Benefits.
- Question: Client's son is 20 years old with debilitating Cerebral Palsy. Son is in a wheelchair, cannot communicate, and has no ability to work. We have already gotten client a Limited Conservatorship over son.Client has been applying for SSDI benefits. The SSDI office found a significant amount of assets in the son's name, consisting of an UTMA account. The UTMA account has a value of about $__________ depending on the stock market.My question is what is the best method of addressing this account in a manner that will allow son to qualify for government benefits. It seems to me that you could just have the UTMA custodian ("client") purchase a specially equipped car (See Title XVI of the Social Security Act Section 2157) and use the remaining funds for the son's day to day living expenses, which are quite substantial. I think the value of a specially equipped car alone could liquidate 1/2 the account.What would be the correct course here? Spend the assets down on exempt assets? D4a Trust? Any other ideas?
- Answer: I have lots of thoughts – first of all you are likely trying to secure SSI, not SSDI. SSDI does not have asset or unearned income limits. Please confirm this – if Medicaid or SSI is not needed for support services then you do not need to do ANYTHING…If SSI or Medicaid is needed, you have lots of options, and you could also use a variety of options. First of all, at 18, the parent is NOT legally obligated to provide support to son or services for free. Odds are that the family has been doing that. Go back and determine what the son would have been eligible for to assist with basic needs from SSI and services from Medicaid. Reimburse the family for any and all expenses they paid for. If reimbursed to family, it is not income to family. If services are paid to family, it is. Do it anyway. That money is now the money of the parents and they can use it to do whatever they need, like pay for legal fees, and/or fund create their own third party trust for their son.They can then spend down; or create a d4A or d4C trust for their son. If anyone else in the family is disabled, you can use d4C trust quickly. Consider purchasing a van or assisting in development of a real home for this young man.
- Hope this helps – please let us know how it works out.
Patricia E. Kefalas Dudek
- Question: A person anticipates being awarded SSDI. This person also owes considerable back taxes to the IRS. Can the IRS take any of the back pay they will receive, and can they garnish from future payments?
- Answer: Yes. The anti-attachment provisions of the Social Security Act at SSA §207 (42 USC §407] are superseded by direct reference in IRC §6334(c). Under the continuous levy program (P.L. 105-34, §1024), the IRS can have the Soc. Sec. Admn. Withhold up to 155 of each benefit check for payment of back taxes until the debt is paid. However, the IRS can also go after larger amounts through other means. It doesn't have to use the continuous levy program. However, an IRS notice provides for exemptions by the IRS in hardship situations.
- From Social Security Online:
- Question: I have a client with an 18 year old child who is receiving SSI. The child does not spend the total amount that he receives each month. If the SSI money which the child does not spend is used to fund a d4a trust, will the d4a trust corpus (of SSI money) be considered exempt for SSI purposes.
- Answer: Answer is sort of… The SSI after the first 30 days becomes a resource. Once it appears they are getting close to the $2,000 resource limit, they can transfer the resources to a D4c or D4A trust — and once in the trust it is unavailable, and there is no transfer penalty. My question is "How are they not using it all?" Are they living with parents, and that is why they are not using it all? If so, the answer is much more detailed. Have the parent's charge for services they are not required to provide for free; and then the money is mom and dad's and they can use it to purchase a second to die policy to fund a 3rd party SNT; or save for the purchase of a home for their child, etc. Hope this helps! Patti
Question: I have an estate that will distribute $25,000 to an SSI recipient. What are his options of dealing with the inheritance and keep SSI? I think the inheritance would be treated as income, but with the ability to transfer before the end of the month in which the inheritance was received. Is this correct?
Answer: That is correct! Purchases are anything for FAIR MARKET VALUE:
1. If the person owes money, you can pay off debt
2. Dental, glasses, etc.
4. Car insurances
5. Prepaid burial and funeral arrangements
6. A phone and service
Above are the most common, but doesn’t include: clothing, shoes, coat, boots, travel (can be paid the first month even if the trip isn’t for months). If they aren’t sure they can spend it that quickly, anything not spent in the month can go into a pooled trust or a D4A trust. Hope this helps.
Question: SSI recipient lives with parents. In a questionnaire from SSA, parent reported charging her $300.00 per month for rent, and would charge anyone else $400.00 per month. The reason he provided is that she is his daughter, and he gives her a break. SSA considered this $100.00 difference to be income and reduced her SSI payment by $80.00 per month. Parent admits he simply guessed at what the going rate would be, and didn’t base the amounts on any facts. I don’t deal with payment issues once someone is allowed SSI, but this is a friend, and I’d like to give him some useful advice. Are there any grounds for appeal? Is there anything he could do to get the original payment continued?
Answer: Yes! Draft a simple lease between him and the child for the amount of the SSI payment before less $60.00 for personal spending money. It will be considered a reimbursement of an expense to him NOT income. Then the child should get Independent Living amount which is the highest rate. Also, please recommend to your friend to make sure he has a properly drafted special needs trust in case something happens to him so his child doesn’t lose benefits.
In the meantime, there is a ton of good information on this stuff on my website. I hope this helps!
Taxes on Social Security Benefits:
- Question: Do I have to pay taxes on Social Security benefits? Are Social Security disability benefits taxable?Answer: (from Social Security) – Some people who get Social Security will have to pay taxes on their benefits. Less than one-third of our current beneficiaries pay taxes on their benefits.You will have to pay federal taxes on your benefits if you file a federal tax return as an "individual" and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. For more information, call the Internal Revenue Service (IRS) toll-free at 1-800-829-3676 and ask for IRS Publication Number 915, Social Security and Equivalent Railroad Retirement Benefits. People who are deaf or hard of hearing may call the IRS toll-free number, 1-800-829-4059. If you wish to have federal taxes withheld from your check, see Can I have federal taxes withheld from my Social Security check?
- The Social Security Administration has no authority to withhold state or local taxes from your benefit. Many states and local authorities do not tax Social Security benefits. You should contact your state or local taxing authority for more information.
- From Social Security Online "Understanding the Benefits" – Publication 05-10024
- Your Benefits May Be Taxable. Some people who get Social Security will have to pay taxes on their benefits. Less than one-third of our current beneficiaries pay taxes on their benefits. You will have to pay taxes on your benefits if you file a federal tax return as an “individual” and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. For more information call the Internal Revenue Service’s toll-free number, 1-800-829-3676.