SSDI stands for “Social Security Disability Insurance” and refers to benefits payable to claimants who have enough credit hours to be considered “insured” for disability.  The monthly payment is a function of what you have paid in to the system.  In my practice the average SSDI monthly payment is around $1,50o.

SSI stands for “Supplemental Security Income” and refers to welfare benefits payable to claimants who do not have enough credits to be insured for disability.  The maximum monthly payment is set out in the law – and for 2011 is $674 per month for an individual.

Last week, for example, I received a long email from a concerned woman who was writing on behalf of her father.   Apparently, her father had worked at a very physical job for over 20 years before suffering a stroke in 2002.   This gentleman filed for Social Security disability in 2002 and was denied at a hearing, which I will assume was held at some point in 2003.

After being denied, this gentleman did not file anything else.  He remained at home, unable to work because of the ongoing complications from the stroke as well as depression and anxiety.

In 2009, the gentleman filed a second application.  In May, 2011, he appeared at a hearing and in July a “fully favorable” decision was issued.

But, the daughter notes:

there is still one little problem. For the past two years we thought we were fighting for SSDI and apparently we weren’t. I remember early on getting a letter stating that he was denied social security disability. But when we wrote to appeal, that is what I thought we were appealing. A few weeks after receiving the judge’s decision we realized that he did not get SSDI but SSI instead. I was in utter shock I had no clue there was a difference between the two and I truly thought my father would get his full disability benefits but this is not the case. I had no knowledge that social security only looks at the past ten years, and that the applicant must have worked five of those last ten years.

What happened here is this:  when the father stopped working in 2002, he was “insured” or covered for SSDI until about 2007.  Why?  SSDI looks at your earnings during the ten year prior prior to your “onset date.”  In order to collect under SSDI, you need to show that you have worked and earned credits for at least 20 out of the past 40 quarters.  There are four (4) quarters in a year, so 20 out of 40 is equal to five out of the past 10 years.  If you have earned full credits for ten out of ten years, your insured status will carry forward for approximately five years.  The requirements are a little different for younger workers, but the principle is the same.

Generally, to earn a credit, you need to show around $1,000 of earnings for that quarter.  So, if you show around $4,000 of earnings for a calendar year, you get all 4 credits for that year.

When the father reapplied in 2009, he should have alleged an onset date prior to his date last insured.  In this case, he could have alleged an onset date anytime after the date of the 2003 hearing denial, but before his insurability ran out in 2007.

My guess is that when he applied in 2009, the intake person at the Social Security Administration used the date of his application as the onset date.   No one ever thought to amend (change) this onset date.  It is also possible that the intake person only processed an SSI application because her computer showed that the father did not currently have credits.

In her email, the daughter does not say if her father had a lawyer appear with him at his hearing.   Assuming that the evidence supported an onset of disability back to 2004 or 2005, that lawyer should have requested an amended onset date back to the earliest possible date.

Of course, the attorney may have made this request but the judge could have denied it on the grounds that the evidence did not support an onset prior to 2009.

SSI pays claimants around $674 per month, and may reduce that amount if the claimant receives support – including room and board – from family, friends or welfare.  SSDI, by contrast, pays a monthly benefit based on the claimant’s past earnings.  Often SSDI payments can be $1,500 to $2,000 per month and there are no household support offsets.

Here, the best advice I could give the daughter and her father would be to speak to a Social Security lawyer about filing an appeal to the favorable decision.  The basis of the appeal would be that the judge used an onset date that was too late – it should have been earlier.   The father will also have to argue that the SSA intake person erred in not taking an SSDI application.  The attorney may have to argue that the father did not have the capacity to understand the difference and thus should not suffer because of his lack of capacity or knowledge.

You can probably sense that the father has an uphill battle.  It would have been a lot easier to deal with this issue prior to the 2011 hearing.  I hope it is not too late for the father to undo what should have been done several years ago.

What happens to an individual’s disability benefits when they are convicted of a felony offense and sentenced to a time of incarceration?

Answer: Under Section 404.468 of the Code of Regulations, “No monthly benefits will be paid to any individual for any month any part of which the individual is confined in a jail, prison, or other penal institution or correctional facility for conviction of a felony.” Thus, if an individual receiving disability benefits commits and is later convicted of a felony offense, any disability payments he/she was receiving at the time of his/her incarceration will stop until such a time as the individual is released.

*Please note: both SSDI and SSI payments are subject to termination if an individual is convicted on a felony offense and as a result is sentenced to a period of incarceration. However, auxiliary benefits, those benefits paid to eligible family members, will continue even if the individual is not receiving benefits at the time because of his/her felony conviction and imprisonment.

Restoring SSI and SSDI Benefits After Being Released from Prison

Although an individual may lose his/her benefits during the time of incarceration, benefits can be restored as soon as the individual is released from prison. The procedures for having disability payments reinstated differ slightly according to the type of benefit that an individual was receiving prior to his/her confinement.

Restoring SSI

Depending on the length that an individual expects to be confined, he/she may be able to begin a “pre-release procedure” while still incarcerated. This is completed through a “Pre-Release Agreement” between the jail and the SSA and applies to inmates that have been or expect to be incarcerated for a period of less than one year. Although felony sentences by law carry a prison sentence of more than one year, it is possible that a defendant could be given credit for any time he/she has already served while awaiting trial and/or disposition in their case. An example of a hypothetical situation is as follows:

“John,” a SSI recipient of five years, is convicted on felony theft, which in the state of Georgia is theft of property in excess of $500.00 and is punishable by a possible term of imprisonment of 1-10 years. John was unable to afford bond and as a result spent six months in jail awaiting trial and/or disposition in his matter. John subsequently entered a guilty plea and was sentenced to 15 months in the state penitentiary. At his discretion, the sentencing judge gave John credit for the time he had already served, meaning that John only had nine months remaining. In this particular case, John was able to start the paperwork necessary to reinstate his benefits while incarcerated. Since John was proactive, it is likely that his benefits will start immediately following his release. If John has chosen to wait until his release to start the reinstatement of his benefits, again he would have received payment for any day that he was eligible, but the probability of his checks being delayed would have significantly increased.

Since any SSI award is based on the recipient’s income, individuals presently confined need to know what his/her income will be upon release and what resources he/she will have available. In addition, the SSA will need to know what other persons, if any, will be residing with the defendant following their release. On the day a disability claimant is released from confinement, they are encouraged to go directly to their Social Security office with personal identification and proof of their release.

Restoring SSDI

If an individual is receiving SSDI at the time of his/her incarceration, he/she will remain on the rolls during their jail or prison term, regardless of the length of their sentence. Like with SSI, SSDI payments will stop when a claimant is incarcerated and recipients will need to request reinstatement of their benefits when the time comes to be released from prison.

Although there is no pre-release procedure for SSDI as there is for SSI, jails or prisons that have Pre-Release Agreements for SSI can also use the same form to help SSDI recipients get the reinstatement process started. Those inmates unable to obtain a Pre-Release Agreement form should inquire as to whether the prison staff knows how SSDI payments can be restarted upon their release. If all else fails, incarcerated individuals should seek the assistance of their family members who can contact their local Social Security office for more information. In addition, the Social Security’s website, http://www.ssa.gov/disability/ contains a wealth of useful information.

In closing, it is against the law for any person convicted of a felony and sentenced to a term of imprisonment to continue to receive social security disability benefits during their period of incarceration. Likewise, it is illegal for someone other than the intended recipient to cash a disability check in the name of another person, specifically under the disguise of the individual in prison.

In June of this year, the New York Times published an article about the Lifeline program entitled Providing Cell Phones for the Poor.

The program specifications vary from state to state – and associated programs may provide subsidies for electricity and other utilities.  You can find out what is available in your state by a simple web search – I typed “Lifeline + cell phones + Georgia” into Google and the search result documented a number of carriers offering the service.

Another service that provides free or low cost cell phones to low income individuals is Assurance Wireless – click on the link to learn more.

Thanks to Wisconsin disability lawyer Don Chewning for blogging about this important benefit to SSI recipients.

If you are interested in learning more about how to get one of these free or low cost cell phones, please visit:

Lifeline Across America

AssuranceWireless.com

Representative payees assume a great deal of responsibility.  They are responsible for handing the claimant’s money and for filing periodic reports with the Social Security Administration.   I have seen at least one case in which the rep payee was sued by Social Security because of an overpayment – the claimant went back to work and lost eligibility for benefits but Social Security did not find out for several years.

It has also been my observation that claimants often become angry with their representative payees when the payee refuses to allocate money for an item or service that the claimant deems necessary but the payee does not.   If you are thinking about serving as a representative payee I advise you to research and carefully consider the obligations of this position.

I recently received a question from a prospective payee named Celeste that touches on some of the issues faced by rep payees:

My friend just recently won her disability case, but the judge said she had to have a payee, which is me. I have a few questions that I would like for you to answer for me if you don’t mind.

When we went to her appointment at the SS office to get her benefits started we were told that her disability check would be about $365 a month, plus she’d get regular Social Security for about the same amount.  She lives with her brother & his wife & has for quite some time and was hoping to move out on her own. If she did move out and had to take on all the bills herself is it possible that her benefits would go up? I understand her wanting to be on her own, but my fear is that she can’t survive on what she’s getting right now.

Also, she’s getting back money because she’s been considered disabled since June 2006. She has loan agreements with some people where she lived with them in the past and social security is paying them back. I understand that, but what I don’t understand is her attorney still has to get paid too (25%), but what I’m not sure of is how he’ll get paid. Does SS send him a check? Am I supposed to take 25% of the “loan payment” money & pay the attorney? I’m just a little confused about the whole thing. Can you help explain it to me, please?

Here are my thoughts:

1.  What happens when the claimant moves out on her own? It appears from Celeste’s email that her friend has been approved for both SSDI and SSI and that her friend is receiving both.  As you may know from reading this blog, SSI payments are set by statute.  For 20o9 an individual can receive a maximum of $674 from SSI.  SSDI is based on a claimant’s earnings record.   I am going to assume that the award is for $365 for SSI and around $365 for SSDI, which makes a total of $730.

SSI payments are reduced per a complicated set of rules called the “deeming” rules.  Social Security assigns a “value” for room and board provided by friends or family and reduces SSI accordingly.

If this was an SSI only case and the claimant was receiving only $365 because of the deeming rules, and the claimant then moved out, the SSI could increase to reflect the loss of the room and board.

In this case, however, it appears that the SSI and SSDI together (totaling approx. $730) generate a payment that is higher than the SSI maximum benefit amount.  Thus, from the limited information I am seeing here, I don’t know that the claimant would receive any more in her monthly benefit if she moved out and lived on her own.

2. Loan agreements I am not sure what Celeste means when she states that “Social Security” will be repaying the claimant’s former landlords.  Agreements to repay can be used to reduce the offsets to SSI but Social Security does not issue checks to anyone.  Also, an agreement to repay does not mean that the claimant has to repay her creditors immediately or at any particular time.   This is one of those areas where the rep payee needs to be very careful because repaying old creditors may not be the best use of the claimant’s money.

3. Attorney’s fees – most attorneys request direct payment from Social Security and file necessary paperwork so that they will be paid directly from SSA.  Celeste and the claimant should confirm this with the attorney – if there is no direct pay, Celeste should pay the attorney from the lump sum.  The attorney is not entitled to 25% of on-going benefits however.

I would advise Celeste to schedule a meeting with her friend’s disability lawyer to discuss these issues.  Obviously my observations are intended to be general as I do not have all of the facts or paperwork in front of me.

–Jonathan

Can you SSDI benefits be seized to pay past due child support?  Yes, according to Social Security Ruling 79-4, the Social Security Administration can withhold a percentage of a claimant’s benefits in an amount equal to what SSA could withhold to pay delinquent income tax debt.

No interest or penalties may be withheld, and before the first withholding may commence, SSA must give the claimant 60 days notice.

There is a question in my mind as to whether SSI benefits may be seized to pay delinquent child support.  The web site esocialsecurityappeal.com states that a “custodial parent has no right to any of the proceeds from SSI.”    Tim Moore, the editor of DisabilitySecrets.com also states that SSI recipients will not have their monthly disability benefits and past due benefits seize.  According to Mr. Moore, the rationale to protect SSI from levy relates to the nature of SSI as a welfare benefit:  “since SSI is essentially a public welfare benefit and does not derive  not from a claimant’s earnings record, SSI benefits cannot be taken for other purposes, just as food stamps and AFDC funds, likewise, cannot be seized.”

I have looked at Social Security’s official web site, but I cannot find anything directly from Social Security that confirms the disparate treatment between SSDI and SSI.  Mr. Moore and esocialsecurityappeal.com may be entirely correct, but until I am able to find source materials to confirm their assertions I will keep this blog post indefinite.

Auxillary Benefits

You should also note that auxillary benefits paid to dependents of SSDI (not SSI) recipients do not equate to child support.  In other words if a disabled claimant with children is awarded SSDI and those children begin receiving benefits as a dependent of the claimant, those auxillary benefits do not offset the claimant’s obligation to pay child support.

If you have worked consistently for 10 years then stopped working, therefore, you “insurability” will follow you for approximately 5 years.

One of the pieces of information I always look for is my client’s “date last insured” for SSDI.   If you have not worked regularly or if there is a big gap between dates that you worked, your date last insured could be an issue.  In order to recover SSDI, your onset date has to be earlier than your date last insured.

This, by the way, is why part time work and large gaps between work attempts can create issues.  When you add a lot of zero dollar quarters into the calculation, the date last insured will get closer and closer to the present.

The amount you received from SSDI is a function of what you paid in.  If your annual earnings were in the $75,000 range your monthly SSDI benefit will be in the $2,000 + range.  If your annual earnings were in the $20,000 range you are more likely to be looking at $1,000 or $1,250 per month.

SSI, by contrast, is a welfare program that pays a statutory amount (around $670) to individuals who meet the definition of disability but who are not insured for SSDI.   The problem with SSI – household income serves to reduce the benefit, sometimes dollar for dollar.  So, if your spouse is working and earning $50,000 annually, your SSI benefit will be totally offset.

Here is a question I received from one of my readers:

my husband was recently given a fully favorable decision and is insured and eligible for ssdi. i would like to know what they use to decide whether you get ssdi or ssi considering ssi is so much less than ssdi.do you get ssdi automtically if you’re insured or are there other factors.

My answer: your eligibility for SSDI is solely based on your insured status.  There are some instances where you can get both.  If your SSDI benefit is low (say $500) and you are eligible for your full SSI benefit, you would get $500 from SSDI and $270 from SSI.

Also, SSDI claims are subject to a 5 month “waiting period” whereas SSI claims are not.  In some cases, you can get SSI for the 5 months, then SSDI thereafter.

I see this a lot among self employed people, or salespeople who are paid in cash and do not have money withheld for Social Security taxes.   Here is an email I received from the wife of such a claimant:

I have worked and paid into social security since 1965.  My husband worked on and off for the past 30 years, but has not regularly paid in to social security.  Ten years ago he was diagnosed with MS and he has been unable to work at all.  I went to Social Security to ask if I could get disability payments for him and they told me that I earned too much money ($45,000 annually).  I am now about to retire at age 60 and would like to collect disability for him.  I’ve gone through web searches and there is such a mire of information – I don’t know where to begin.  Can he collect against the money I’ve paid in?  He is completely dependent on me.

Jonathan’s response: unfortunately I think that you are out of luck. If your husband did not earn enough quarter hours of credit, he is not “insured” for Title II disability.  He cannot claim disability based on your earnings record and your earnings will effectively offset any claim he might have for SSI.

You may want to request an earnings and benefit statement (form 7004) to determine if there was every a point where he was insured for Title II disability.  If he was insured at one point and you have medical support to argue that he was unable to work at that point in time, he could collect from SSDI.

Often, Social Security representatives will look to see if a potential claimant is currently insured.   However, this does not take into account that some people wait two, three, four or more years after “becoming disabled” before they apply.  If you know your “date last insured” for Title II and your “onset date” (the date you meet the definition of disability) is prior to your date last insured, you can still collect, even if you are not insured at the time you apply.

I don’t deal a lot with SSI issues on this blog mainly because I don’t take a lot of SSI cases.  If you do not know, there are a number of disability programs adminstered by Social Security – Title II Social Security Disability (also called SSDI) is one program, and Title XVI Supplemental Security Income (SSI) is the other.

SSDI pays benefits to claimants who are disabled and who have a qualifying earnings record.  To oversimplify, you qualify for SSDI if you have worked for five out of the last ten years.  There are exceptions to this general rule, but basically SSDI applies if you have worked and paid enough Social Security taxes to be “insured” for the SSDI program.

SSI, by contrast, pays benefits to claimants who are disabled but do not have sufficient earnings or assets to qualify for SSDI.  An SSI claimant can be a disabled child, a 20 year old with a serious medical problem and minimal work experience, or a 50 year old housewife who worked for 15 year back in the 1970′s and 80′s but has not worked at all in the last 10 years.

Up until last year, I rarely took SSI cases because Social Security would not withhold attorney’s fees on past due benefits.  Unfortunately, when did take SSI cases, we would win, and the claimant would get a lump sum check, but would not pay me the 25% owed.  As I got busier, I made the decision not to take SSI cases because they were not worth the risk.

Last year, Social Security finally corrected this glitch in the payment process and now they do issue direct payments to attorneys.  However, I am still very careful about taking SSI cases because of the offsets involved.

As noted above, SSI claims are only payable to claimants with limited assets and income.  Social Security will count as income something called “in kind” services, which can be room and board, welfare payments, or support from family.  Also SSI will reduce your benefits if you are living in a household with a spouse or family member who works.  That is why the 50 year old married housewife who lives with her employed husband may qualify medically, but will not recover any benefits because of the “deeming” of household income.

Obviously, SSI claimants have to live somewhere and they need funds for food and transportation as well.   Therefore, in many cases there is an offset of benefits.  Since SSI benefits are set by law and the maximum monthly SSI benefit (for 2008) is $637, it doesn’t take too much in kind support or deeming to reduce that benefit down to nothing.  As a matter of business, I just can’t take on cases where I work for 2 to 3 years, appear at a hearing and expend hours of my time and paralegal time, only to end up with $400 or $500 or, in some cases, nothing.

With that background stated, let me address Elana’s question, which is:

I have a gentleman that lives with daughter and pays $500.00 for rent which he reported to SS. His daughter was asked to complete a form which asked the market value of room.  She put $1,000.00 market rent.  Now SSI benefits were reduced by the value of the $500.00 as income to the man.  How can he correct this.  I thought of obtaining an appraisal by a Real Estate Agent of the rental market value of the room.  If less than $1,000.00 submit this document to SS along with the request for reconsideration.  Do you think this would work?  Do you have any other suggestions to try to correct the market value of the room? I appreciate your input.  Thank you.

Here is my response: In this situation, the claimant is dealing with an offset of his benefits.  Based on the information that the claimant’s daughter provided, she is “giving” her father $500 of value in the form of room and board.  Social Security is reducing his benefit by that in kind support.  Assuming that the father is getting the maximum $637 from SSI, the $500 reduction leaves him with only $137 per month to live on.

Now, the father and daughter need to argue to Social Security that the actual market value of the father’s room is something less than $500.

I think that Elana is on the right track regarding what to do.  I would gather documentation from local real estate professionals.  This could take the form of a notarized statement, or documentation of comperable rental units in the area.

The father needs to look carefully at the documentation he has received from SSI.  I believe that when SSI computes an offset they provide written notice.  He needs to see if that written notice provides for any appeal rights or deadlines.

In any case, I would contact the local SSI office and ask to speak to a supervisor to discuss correcting this error.  Hopefully SSI will be cooperative.  If not, you may need to file for reconsideration of the deduction – my only question is whether the father has missed any applicable deadlines to do so.

Jonathan responds: Betty, if your nephew is getting SSI, he is automatically eligible for Medicaid, not Medicare. Medicaid should be paying the bills. I would suggest that you call your local Social Security office as well as the State Medicaid office. Realize that Medicaid is a State operated program that receives funding from the federal government so you will need to call both the State Medicaid office as well as your local SSI (Social Security Administration) office. Sometimes, your federal Senator or Congressional representative can be very helpful in cutting through the red tape.

–Jonathan