“SSD” BENEFITS: AVAILABLE TO BLIND/DISABLED WORKER WHO:

ICLE ELDER LAW COLLEGEDECEMBER 16, 2008SOCIAL SECURITY ISSUES:SOCIAL SECURITY DISABILITY (“SSD”) ANDSUPPLEMENTAL SECURITY INCOME (“SSI”)Presented by Donald D. Vanarelli, Esq. Certified Elder Law AttorneyNational Certified GuardianAccredited Professional Mediator

“SSD” BENEFITS: AVAILABLE TO BLIND/DISABLED WORKER WHO: (1) applies for benefits; (2) has not reached full retirement age; (3) is “insured” (SSA earnings); (4) is disabled; (5) has been disabled (5 months within last 17 months)

“INSURED” FOR SSA DISABILITY BENEFITS (ADULT) SSA requires an individual to have earned “insured status” through work activity at the onset of disability. Each year an individual has the potential to earn 4 quarters of coverage through earnings. “Insured status” = (1) “fully insured” (40 quarters), and (2) show a current connection to the workforce (worked 5 out of the last 10 years).

“SSI” BENEFITS: AVAILABLE TOAGED, BLIND OR DISABLED WHO: (1) applies for SSI/other benefits for which may be entitled; (2) is U.S. resident or qualified alien; (3) is not resident of a public institution; (4) meets income and resource requirements; and, (5) is not fleeing to avoid prosecution/ violating probation or parole.

“DISABILITY,” DEFINED (ADULTS): Inability to engage in “substantial gainful activity” (SGA) based on physical/mental impairment (or combination) expected to last at least 12 months or result in death.

“SUBSTANTIAL GAINFUL ACTIVITY” (SGA): 2008: $940/month (disabled); $1,570/month (blind).

SOCIAL SECURITY RETIREMENT BENEFITS: Available to worker who has reached “normal” retirement age (which varies based on birth date). Benefit amount based on worker’s “primary insurance amount (“PIA”)” and age.

SOCIAL SECURITY RETIREMENT BENEFITS: Normal retirement age is gradually increasing. Year of BirthNormal Retirement Age 1937 or earlier 65 1943 - 1954 66 1960 and later 67

SPOUSE/FORMER SPOUSE BENEFITS: 1. OLD AGE BENEFITS: If insured worker is alive and receiving benefits, benefits are available to spouse/former spouse who retires at normal retirement age or who is caregiver of worker’s child.

SPOUSE/FORMER SPOUSE BENEFITS (CONT’D): 2. WIDOW’S/WIDOWER’S BENEFITS: Available to worker’s widow/er based on earnings record of fully insured worker. Available at widow/er’s retirement at age 60+, or earlier if caregiver of worker’s child.

CHILDREN’S BENEFITS: Available to worker’s children, if worker is entitled to retirement/disability benefits or if worker is deceased and fully insured. Child must be dependent minor or disabled adult.

SOCIAL SECURITY AND MEDICARE Those age 65 and over who are entitled to retirement benefits also qualify for Medicare Part A. After 24 months of SSD eligibility, recipients are entitled to Medicare Part A and are eligible for Medicare Part B subject to premium payment.

MAJOR DIFFERENCES BETWEEN SSD AND SSI: • SSD available only if “insured” • SSI not based on insured status or earnings, but based upon income and resources • SSD available only until retirement age • SSI available to individuals over age 65

MAJOR DIFFERENCES BETWEEN SSD AND SSI (CONT’D): • In NJ, those who receive SSI are also automatically entitled to Medicaid. • After 24 months of SSD eligibility, those who receive SSD are entitled to Medicare Part A (and Medicare Part B subject to payment of a premium).

INTERPLAY BETWEEN SSI AND SSD: • An individual may receive benefits under both SSI and SSD • Same standards for the disability determination for SSI and SSD (for adults)

INTERPLAY BETWEEN SSI AND SSD (CONT’D): • After the first $20 per month of unearned income (including SSD) without penalty, any unearned income is deducted from SSI benefit on a dollar-for-dollar basis. • SSD benefit could reduce an SSI benefit to zero (resulting in loss of Medicaid).

SSI BENEFIT AMOUNTS: Depends on: 1. Recipient’s living arrangement; and 2. Recipient’s marital status.

SSI BENEFIT AMOUNTS (CONT’D): NJ supplements the federal SSI benefit. The basic federal benefit in 2008 is $637.00. In NJ, the state supplement is $31.25 per month.

SSI RESOURCES Limit: $2,000 if single, or $3,000 if married Types: Non-countable Countable

NON-COUNTABLE RESOURCES Home Household Goods and Personal Effects Automobile Life Insurance - Face Value under $1,500 Burial Plot All other resources are countable.

SSI INCOME LIMITS: Countable income must be below maximum SSI benefit amount established for the applicant’s particular benefit category. SSI payment may be reduced depending on how much, and what kind of, income is received.

SSI INCOME CATEGORIES: Under SSI rules, income can be earned, unearned or in-kind.

UNEARNED INCOME Income not received from work (includes Social Security benefits, annuities, alimony, child support, dividends, interest from bank accounts, royalties, rents, prizes, awards, gifts, and inheritances. SSI recipient may receive $20/month unearned income (without penalty). Excess is deducted from SSI benefit on dollar-for-dollar basis.

EARNED INCOME Earnings from wages or self-employment. Includes payment for work in a sheltered workshop. Earned income over $65/month ($85/month if there is no unearned income) will reduce SSI benefit. Every $2 earned reduces the SSI benefit amount by $1.

IN-KIND INCOME (IN-KIND SUPPORT & MAINTENANCE (“ISM”)) “Not cash, but food, shelter, or something the recipient can use to get one of those items.” Receipt of food or shelter from a third party is ISM and may reduce benefit.

ISM (CONT’D) Calculated two ways (depending on circumstances of recipient): the One-Third Reduction Rule and the Presumed Maximum Value Rule.

IN-KIND INCOME Example: Purchase of a television set If you give the recipient of public benefits the cash necessary to purchase a television set, the recipient’s SSI will be reduced dollar-for-dollar after the first $20.

IN-KIND INCOME However, if you purchase a television set and gift the television set to the SSI recipient, then the recipient’s benefits are unaffected.

IN-KIND INCOME Strategy - giving the beneficiary the right to obtain goods and services (e.g., a non-refundable gift certificate to the appliance store) does not result in the receipt of in-kind income. When you give the beneficiary any right to receive services or goods, it should be non-transferable and non-refundable to avoid any argument that it could be converted to cash.

IN-KIND SUPPORTAND MAINTENANCE The receipt, or right to receive, food or shelter is known as “In-Kind Support and Maintenance,” or ISM for short. The beneficiary’s SSI benefits will be reduced if he/she receives ISM.

IN-KIND SUPPORTAND MAINTENANCE SSI benefits are specifically intended to pay for a person’s food and shelter. If that person receives food or shelter from any source, then less SSI is needed.

IN-KIND SUPPORTAND MAINTENANCE If Social Security determines that ISM is given to SSI beneficiary, his or her benefits will be reduced, but not dollar-for-dollar. When a beneficiary is given food or shelter, his/her SSI will be reduced by either 1/3rd of the federal benefits rate or the actual value of what is provided--whichever is less.

THE ONE-THIRD REDUCTION RULE Used when SSI recipient lives for a full calendar month in the household of another person who provides both food and shelter to him without charge. When this Rule is used, the SSI benefit amount is reduced by one-third the federal benefit amount.

THE PRESUMED MAXIMUM VALUE (“PMV”) RULE Used when SSI recipient has received food or shelter from an outside source but the One-Third Reduction Rule does not apply. Under this Rule, SSA presumes that food and shelter has a maximum value, which is the one-third of the federal benefit amount, plus $20. (Recipient may prove actual value is less than PMV).

THE ONE-THIRD REDUCTION RULE AND THE PMV RULE Regardless of the amount of ISM, the SSI benefit is never reduced by more than one-third the federal benefit plus $20.

THE ONE-THIRD REDUCTION RULE AND THE PMV RULE (CONT’D) SSA does not apply both Rules to a recipient in any one month: if SSA pays a reduced SSI benefit under the One-Third Reduction Rule, any additional in-kind income is disregarded, regardless of amount.

IN-KIND INCOME (IN-KIND SUPPORT & MAINTENANCE (“ISM”)) Bills paid by a third party directly to a vendor (seller or supplier) for items that are not food or shelter do not result in countable income to the SSI recipient.

AVOIDING ELIMINATION OF SSI SSI is a supplemental income program. Therefore, the greater the recipient’s other income (such as income from Social Security Disability or Retirement benefits), the less SSI the beneficiary will receive. If the recipient receives only a little SSI each month, then the reduction in SSI benefits due to the receipt of ISM may be fatal to the beneficiary’s SSI and Medicaid benefits.

AVOIDING ELIMINATION OF SSI For example, if the beneficiary receives only $100 per month in SSI benefits, the imposition of a PMV reduction will eliminate the entire SSI benefit.

SSI GIFT PENALTY • 36 Month Lookback • 36 Month Maximum Penalty • Duration - Divide Amount Gifted by SSI = • Penalty Period

THE APPEALS PROCESS: Levels of appeal from an adverse determination: 1. Reconsideration: Paper review 2. Hearing by an ALJ 3. Review by Appeals Council 4. Federal Court review Forms may be obtained online from www.ssa.gov.

THE HEARING:OUTLINE OF TESTIMONY • Personal, educational, literacy/fluency, mental aptitude • Work experience • Impairment(s), including onset date, symptoms, medical sources consulted • Current treatments

OUTLINE OF TESTIMONY (CONT’D): • Physical limitations • Environmental restrictions • Psychiatric limitations • Pain

OUTLINE OF TESTIMONY (CONT’D): • Physical Residual Functional Capacity for various activities • Daily activities of a typical day • “Before and After” example of limitations • Medical doctors • Demonstrations

DETERMINING DISABILITY: Based on the 5-part sequential analysis of 20 C.F.R. §404.1520: (1) The claimant is not engaged in “substantial gainful activity” (“SGA”)’ and (2) The claimant has a “severe” impairment, which will last at least 12 months (or result in death).

DETERMINING DISABILITY (CONT’D): If claimant satisfies first 2 inquiries, severity of the impairment is then analyzed: (3) The impairment meets or equals the severity of the listed impairments defined in the medical listing. (If yes, then the claimant is disabled, according to medical listing).

DETERMINING DISABILITY (CONT’D): If answer to inquiry #4 is no, determine whether:: (4) The claimant is unable to perform his/her “past relevant work” (“PRW”); and (5) The claimant is unable to perform other work within his “residual functional capacity (“RFC”). If yes, then the claimant is disabled according to vocational factors.

THANK YOU FOR ATTENDING QUESTIONS / COMMENTS?

“SSD” BENEFITS: AVAILABLE TO BLIND/DISABLED WORKER WHO: