Wednesday, August 28, 2013

Withholding SS Benefits to Recover VA Debt

Eleanor from upstate New York is having a financial hardship because Social Security is withholding money from her monthly disability checks to recover money she owes to the Veterans Administration. She explains her situation: "I am receiving benefits through SSD, I am a disabled and not able to work. My SSD payments are being garnished from Veteran's system now and it is causing an extreme financial hardship for me to maintain my rent, food, health, etc. I have requested a waiver for hardship through the VA with no response yet from them and the $ are still being deducted from my SSD benefits. Is there any way to stop these deductions to wait and see what the response is on the waiver for hardship?"

The unfortunate answer is no. Under the Debt Collection Improvement Act of 1996 the Social Security Administration must withhold up to 15% of the benefit payment amount from monthly SS benefits to collect delinquent debts owed to a federal agency. They call this the Benefit Payment Offset (BPO in bureaucratese) The benefit payment cannot be reduced to less than $750. The SSA has no authority to make exceptions because that is up to the creditor agency.

But there may be something available for a little bit of relief.  Depending on the individual circumstances, if the total monthly income is less than $797 for an individual living alone, or $976.48 for a couple in upstate New York, you may be eligible for a supplemental payment to bring your household income up to those levels. These payments would be made under the SSI program, or Supplemental Security Income, which is administered by the Social Security Administration. These SSI payments are not subject to the debt collection provisions, so it would behoove Eleanor to go to her local SS office to apply for SSI payments. It just might help, at least a little bit.

Tuesday, August 27, 2013

Baby Benefits

Larry from Alabama writes to ask if its true that newborn children can receive a benefit on a retiree's account.  Here's how he puts it: "I recently heard that if you are 65 or older and collecting social security as you only means of income; and you have a new born child; social security can or will provide you with a subsidy for your child. Do you know anything about this new program?"

Well Larry this is not a new program at all.  Since 1940 dependent benefits have been available for young children as well as wives and widows  (husbands were not included until much later).  But you must apply for the benefits asap because the application can be retroactive for only 6 months.  And in a rather quirky provision, no benefits are payable for the month of birth, unless the child was born on the first day of the month!  This is because a beneficiary must meet all the eligibility requirements "throughout the month" and one of the requirements is that the baby must be born to be eligible.  No prenatal benefits allowed!