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.

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!

Setting Up Withholding From Checks

Stanley from California writes:

Without going to the SS office in Palm Springs, where do I find the forms to have withholding tax withheld from my monthly checks. I had it done in 2009 then canceled the WH in 2010 because I wasn't working, but guess what, this 80 yr old Pharmacist has been invited back to be PIC (Pharmacist in Charge) of a concierge infusion pharmacy catering to the uninsured elders with means to pay for this service. Your help would be appreciated.
Sincerely
Stanley

ANSWER: Well Stanley congratulations are in order on your new position! Now I wonder what a concierge infusion pharmacy is? But getting back to your question, if you choose to have SSA withhold taxes from your benefits, you must file IRS form W-4v with the Social Security Administration. You can simply mail it to your local SSA office. Here is a link to the IRS for a down-loadable and fill-able form with instructions: http://www.irs.gov/pub/irs-pdf/fw4v.pdf

If you have not been to the locall SSA office lately and want to check for its current location, here is a link to the online SSA office locator: https://secure.ssa.gov/apps6z/FOLO/fo001.jsp

Note that monthly withholding is not required, you can pay directly to IRS with quarterly estimated payments if you are familiar with that process. But I suppose you would prefer the convenience of withholding now that you are going to a very busy man. Again, congratulations.

When the Payment Date Is A Sunday

Ramon from California writes:

I receive my check on the 3rd of the month, which falls on Sunday. Will it be delivered on Saturday or Monday?

ANSWER: When the payment date is on a Saturday, Sunday, or a legal Federal holiday, the check will be dated for the first day before that is not a Saturday, Sunday, or legal Federal holiday. So this year the checks will be paid on Friday, April 1. Let's see if there's any April Fool's jokes in the envelope.

Widow's Benefit On Top Of Disability Benefit

Suzanne from Florida writes:
I only have one question - I am 58 years old and am on social security disability. My husband is 78 years old and gets regular social security. If he dies (heaven forbid) do I get any of his benefits as a survivor on top of my disability payments????

ANSWER: Yes Suzanne, you would be eligible for a widow's benefit even though you are under age 60 because you are disabled. Disabled widows are eligible as young as age 50 if totally disabled. The benefit would be reduced for age as if you were age 60. The difference between your disability benefit and the widow's benefit would be added to your disability amount, so although you would be receiving two benefits, the total would be no higher than the widow's benefit amount alone. Of course, if your own disability benefit is higher you would continue to receive that. You could also defer receiving the widow's benefit to full retirement age to get an unreduced benefit then if it is higher.  But let's hope you don't need to consider these things for a long, long time!

Disability Benefits at 62 Years Young

Mark from Hawaii writes:

In February I became 62 but I have been disabled from work since 52 years old. Do I get an increase in my pay for being 62 years young?
Mahalo and thank you.

ANSWER: Sorry Mark, no. The disability benefit amount is already figured as if you were at Full Retirement Age when it was awarded. At Full Retirement Age (age 66 for you) the disability benefit will be converted to a retirement benefit, but the amount stays the same.

Child Under 18 Paid All Year

Kathy from Ohio writes:

For a child under 18 and in school, on Social Security benefits, are the benefits paid all year long or only when the child is in school--nine months?

ANSWER: Yes they are paid all year long. When the child turns 18, if he or she is in secondary school, benefits continue till graduation. If the child takes secondary school level courses after graduation, benefits can continue up to age 19 if the child is in full time attendance, and even a couple of months after 19 depending on the school program.  The benefits are paid during vacation months, unless the child turn 19 in non-attendance month, at which time they stop.