Kristin Carleton is a longtime columnist with Rethinking65. To read more of her articles, click here.
Kristin Carleton
The Social Security horror stories are true. Backlogs are causing delays of up to a year in processing new applications. Wait times for phone calls can be several hours long — and frequently applicants do not receive call backs from Social Security Administration (SSA) staff. But as a financial advisor, there’s a lot you can do to assist your clients who are caught in the Social Security quagmire for themselves or for a family member.
When advising clients and interacting with the agency directly, first make sure you’re familiar with the current rules and regulations. If you receive answers that you believe are incorrect, ask to speak with a manager, be prepared to send the correct rules and regulations to this contact, and keep pushing. You should also help your clients be proactive by educating them and encouraging them to schedule appointments with the SSA.
You can help them set up these appointments and even attend them with your clients. Better yet, come with printouts of the written code and your conversation notes.
These steps can be helpful for clients and their families who are receiving Social Security, Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) benefits. The SSI program is a means-tested program that provides monthly payments to adults and children with a disability or blindness, and to adults aged 65 or older. Social Security and SSDI are entitlement programs based on the earnings record of the recipient or the recipient’s parent.
When I recently called the Social Security Administration on behalf of one of my clients, I experienced the agency’s disfunction firsthand. My client was seeking an SSI benefit for their child who had just turned 18 and is diagnosed with autism. We waited for two and a half hours on hold, and then the first person we spoke to lacked the correct information and had no knowledge of the agency updates being implemented this month.
The staff member initially responded on the call that that my client’s child was not eligible for the full SSI benefit because he was working a few hours a week. In actuality, my client’s child was earning less than $300 per month, meaning their full SSI benefit should have remained intact. Unfortunately, this misinformation and lack of knowledge is all too common and can really jeopardize the government benefits that a client or their loved one not only entitled to and but need to meet their needs.
I shared the correct information with the SSA staff member, pointing to where it was noted in the POMS regulation. (POMS, short for Program Operations Manual System, is the guidebook for SSA staff). The staffer then looped their manager into the phone call. The manager read the POMS and agreed that my client’s child was owed the full amount of their SSI benefit.
This clarification also brought thousands of dollars in back benefits to the child. I then helped my client figure out how to help their child stayed under the $2,000 resource limit to remain eligible for SSI. (Spoiler alert: We contributed the money to his ABLE account).
SSA Improvements Coming
In fairness, the Social Security Administration faces some significant challenges, the biggest of which is a staffing shortage. The administration currently has about 60,000 employees. This may sound like a lot but there are more beneficiaries and more processing needs than ever before. Furthermore, many employees are new and lack knowledge of processes and rules.
But positive changes have been made, and I believe they will continue. On December 20, 2023, Martin O’Malley, formerly the governor of Maryland and before that the mayor of Baltimore, was sworn in as the new commissioner of the Social Security Administration. His changes, which became effective immediately except where noted, include:
Reduction in Docking Overpayments
Specifically, this change reduces the amount that future SSI/SSA checks are docked for overpayments, from 100% to 10%, with no interested added on. For a family, this means that instead of immediately losing their monthly checks, without notice or the ability to prepare, they will face a maximum 10% reduction to their check. This will allow them to reduce their expenses in a more reasonable way to make up for the lost income.
I recently worked with a family whose son, let’s call him George, suddenly started receiving $400 per month less in SSI. After receiving an initial notice regarding this reduction, the family received a notice stating that George had been paid $400 per/month more than was allowed and that he would not receive a benefit until he repaid more than $28,000. The family was using this money to transport George to and from his volunteer work at the local animal shelter and to cover the rent they were charging him to help pay their mortgage.
George had to stop volunteering, which hugely disrupted his helpful structured routine, and the family had to dip into its emergency savings to pay their mortgage. A 10% drop in the total amount would have allowed George to continue volunteering and for the family to use only a small amount of savings to pay their mortgage.
Extending Repayment for Overpayments
Beneficiaries who have been overpaid SSI will now have the overpayment taken back by the Social Security Administration over a 60-month period instead of over just 36 months. This can really help a beneficiary and/or family who rely on these benefits to pay bills and meet monthly expenses, such as room and board.
Permission to Request Waivers for Repaying Overpayments
Claimants may now request a waiver of repayment if they believe the overpayment was not their fault.
Imagine that you have a child with a disability who lives with you and receives SSI. You rely on this SSI every month to help pay the family’s mortgage. The Social Security Administration just told you that because you provide more support than is allowed to your child, your child has been receiving too much income. However, you look back at your documentation you see that you provided the SSA with in-depth information and proof that your child was paying her fair share of household expenses.
Previously, the SSA could simply claim it had overpaid beneficiaries and collect repayment of those funds. Now the burden is on the agency to prove that you did not actually provide that information, or that the information you provided was incorrect. This change is huge because it removes the burden from overworked families. The average family supporting a disabled family member spends more than 40 hours a week providing “unpaid supports.” Now they do not have to add fighting the SSA to their list of unpaid labor.
This policy would have also been helpful for George’s family, and it should go a long way toward improving relations between beneficiaries, families, and the Social Security Administration.
More Efficient Call-in Procedures
Individuals calling the Social Security office are now permitted to address more than one issue and more than one beneficiary on a single call. This can save parents a lot of time if they are calling for themselves and a child, multiple children, or multiple benefit missteps for the same individual.
Greater Access to Housing Assistance Without Jeopardizing Benefits
Effective Sept. 30, 2024, a new rule goes into effect that stipulates that SSI applicants or recipients are not receiving In-Kind Support and Maintenance (ISM) in the form of room or rent when the amount of monthly required rent for the property equals or exceeds the presumed maximum value (PMV).
Yes, there are quite a few acronyms to get familiar with when discussing supplemental security income, and sometimes even their explanations sound like a foreign language. The PMV is one-third of the FBR + $20. The FBR is the federal benefit rate, which is currently $943 for an individual, $1,415 for a couple. This means the current PMV for an individual is $334.
In order for a beneficiary to continue to receive the full SSI amount, a family can now provide a simple rental agreement that shows they are charging their child rent above the PMV of $334. Previously, a family was required to show a complex calculation and proof they were either charging market rent for room and board (housing and food), or that the individual was paying their “fair share” of household expenses.
This new rule focuses only on housing, and simplifies calculations for the beneficiary and their families so that they can receive the entire SSI benefit amount. It also works if a parent helps a child pay for rent outside the family home.
A Housing Example
Let’s say Charlie, age 25, has just moved out of her parents’ home and into her own apartment. She has cerebral palsy and receives care through a Medicaid waiver. Mom and Dad also consistently check on her. The rent for the apartment is $1,200. Mom and Dad pay the $1,200, and then charge Charlie $500. Charlie continues to receive the full amount of SSI because she is personally paying more than the PMV of $334.
More Access to Food Assistance Without Jeopardizing Benefits
The new rule that goes into effect Sept. 30, 2024, also omits food from in-kind support and maintenance calculations (ISM). This means that parents, loved ones or anyone in the community can provide informal food assistance to a person receiving SSI without reducing their SSI benefit. Informal food assistance generally means that someone is provided access to food through a living arrangement but without an explicit agreement that food is included. An example would be if Charlie moved back home and ate all of her meals with Mom and Dad.
Looking Ahead
These changes are a positive step forward for Social Security beneficiaries. In addition, the Social Security Administration just announced big plans to simplify and streamline the SSI application process and make it more accessible.
Commissioner O’Malley, appointed by President Biden and confirmed by the U.S. Senate, has shown he is dedicated to improving processes, investing in new technology, and improving relations between beneficiaries and the SSA. He has also shown an ability to make immediate, impactful change with existing resources, as well as plan for future investment.
However, the upcoming presidential election makes it important to understand the political undertones accompanying the commissioner role. Although it’s supposed to be a six-year, non-partisan position, involvement by the president and Senate naturally brings politics into the mix.
Several years ago, President Biden fired Andrew Saul, whom President Trump had appointed to head the Social Security Administration. The White House reportedly said that Saul, who refused to resign, “undermined and politicized Social Security disability benefits.” This makes O’Malley’s tenure under a potential change to Republican leadership is unclear, and something to watch.
Kristin Carleton, CEO of All Needs Planning, provides special needs planning by addressing the funding supports, legal strategies and clinical supports necessary for every member of the family. Her son Eli was born with a congenital brain disorder, which ignited her passion for planning for her son and daughter. Kristin’s life mission is to provide special needs planning to all who need and want it. She can be reached at 919-433-7713 or kristin@allneedsplanning.com. All Needs Planning offers investment advisor services through Sound Income Strategies, LLC, an SEC-registered investment advisor; the firms are not associated entities.
