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Social Security pays retirement, disability, family and survivors benefits. Medicare, a separate program run by the Centers for Medicare & Medicaid Services, helps pay for inpatient hospital care, nursing care, doctor’s fees, drugs and other medical services and supplies for people age 65 and older, as well as to people who have been receiving Social Security disability benefits for two years or more. Medicaid a State run federally funded program will supplement and pay for your medical case if you are disabled for your first two years of disability. Medicare does not pay for long-term care, so you may want to consider options for private insurance. Your Social Security covered earnings qualify you for both programs. For more information about Medicare, visit www.medicare.gov or call 1-800-633-4227 (TTY 1-877-486-2048) if you are deaf or hard of hearing).
If you were born before 1938, your full retirement age is 65. Because of the 1983 change in law, the full retirement age will increase gradually to 67 for people born in 1960 or later. Some people retire before their full retirement age. You can retire as early as early as 62 and take benefits at a reduced rate. If you work after your retirement age, you can receive higher benefits because of additional earnings and credit for delayed retirement. If you are disabled prior to your full retirement age your retirement will not be reduced.
Disability- for example, if you become disabled before full retirement age, you can receive disability benefits after six months if you have:
** enough credits from earnings (depending on your age, you must have earned six to 20 of your credits in the three to 10 years before you became disabled); and
** a physical or mental impairment that’s expected to prevent you from doing "substantial" work for a year or more or result in death.
If you are filing for disability benefits, please let the Social Security Administration know if you are on active military duty or are a recently discharged veteran, So that the Social Security Administration can handle your claim more quickly. There is an offset for Non-Service Connected VA disability benefits against your SSDI but not for VA service connected Disability Benefits thus allowing entitled Veterans to collect both Social Security Disability and Service Connected VA Disability Benefits.
Family- If you are eligible for disability or retirement benefits, your current or divorces spouse, minor children, or adult children disabled before age 22 also may receive benefits. Each may qualify for up to 50 percent of you benefit amount.
Survivors- When you die, certain members of your family may be eligible for benefits:
** your spouse age 60 or older (50 or older if disabled, or any age if caring for your children younger than age 16); and
**your children if unmarried and younger than age 18, still in school and younger than19 years old, or adult children disabled before age 22. If your are divorced, your ex-spouse could be eligible for a widow’s or widow’s or widower’s benefit on you record when you die.
Extra Help with Medicare- If you know someone who is on Medicare and has limited income and resources, extra help is available for prescription drug costs. The extra help can help pay the monthly premiums, annual deductibles and prescription co-payments. To learn more or to apply, visit www.socialsecurity.gov or call 1-800-772-1213 (TTY 1-800-325-0778).
You can work and still get retirement or survivors' benefits. If you are younger than your full retirement age, there are limits on how much you can earn without affecting your benefit amount. When you apply for benefits, the Social Security Administration will tell you what the limits are and whether work would affect your monthly benefits. When you reach full retirement are, the earning limits no longer apply.
Carefully consider the advantages and disadvantages of early retirement. If you choose to receive benefits before you reach full retirement age, your monthly benefits will be permanently reduced, unless you are adjudicated as disabled. To help you decide the best time to retire, the Social Security Administration offers a free booklet, Social Security-Retirement Benefits ( Publication No. 05-10035), that provides specific information about retirement. You can calculate future retirement benefits on the Social Security Administration website at www.socialsecurity.gov by using the Social Security Benefits Calculators.
Other helpful free publications include:
* Understanding The Benefits (No. 05-10024)
*Your Retirement Benefit: How it Is Figured (No. 05-10070)
*Windfall elimination Provision(No. 05-10045)
*Government Pension Offset (No. 05-10007)
*Identity Theft And Your Social Security Number (No. 05-10064)
The Social Security Administration also has other leaflets and fact sheets with information about specific topics such as military service, self-employment or foreign employment. You can request Social Security publications at the Social Security Administration website, www.socialsecurity.gov , or by calling the Social Security Administration at 1-800-772-1213. The Social Security Administration website has a list of frequently asked questions that may answer questions you have. The Social Security Administration easy-to-use online applications for benefits that can save you a telephone call or a trip to a field office. You may also qualify for government benefits outside of Social Security. For more information on these benefits, visit www.govbenefits.gov.
If you need more information - Visit www.socialsecurity.gov/mystatement on the Internet, contact any Social Security office, call 1-800-772-1213 or write to Social Security Administration, Office of Earnings operation, P.O. Box 33026, Baltimore, MD 21290-3026. If you are deaf or hard of hearing, call TTY 1-800-325-0778. If you have questions about your personal information, you must provide your complete Social Security number. If your address is incorrect on this Statement, ask the Internal Revenue Service to send you a Form 8822. The Social Security Administration won’t keep your address if you’re not receiving Social Security Benefits.
Para Solicitar una Declaracion en espanol, Llame al 1-800-772-1213
Although marriage terminates disabled adult child’s benefits, initial entitlement requires only that the claimant be unmarried. 42 U.S.C. §402(d)(1)(B), 20 C.F.R §404.350(a)(4). So, before applying for benefits a claimant may be both married and divorced. It is also possible, where benefits of a disabled adult child are terminated because of marriage and that marriage ends, that the disabled adult child, now unmarried, can apply for benefits on the other parents account. A Claimant who is married when the application is filed my be entitled to benefits in the period prior to the month of marriage. POMS DI 10115.001.
Benefits of a disabled adult child end for all the same reasons an adult beneficiary’s benefits end, e.g., end of disability, death. In addition to terminating when a disabled adult child marries, benefits for a disabled adult child end if the insured person’s disability or retirement benefits end for a reason other than death. An exception is : if the insured benefits are lost due to drug addiction or alcoholism that was found to be material to the insured’s disability. For so long as the insured remains disabled, the disabled adult child is entitled to benefits. 20 C.F.R. §404.352(b)(5).
If childhood disability benefits ends due to the cessation of the child’s disability, that child may be re-entitled to benefits once based on the same earnings record if the child again becomes disabled prior to 84 months (7 years) passing after the last period of benefits ended. We note though that contrary to this general rule, Congress established an exception to the seven-year time limit and remove it for those whose benefits ceased because their return to work and the performance of substantial gainful activity, effective October 1, 2004. Section 420A of Public Law 108-203, the Social Security Protection Act of 2003. So, to be re-entitled, a child must not have married unless that marriage is void or was annulled. 20 C.F.R. §404.351. A marriage that ends because of divorce or death keeps the child from further entitlement. The requirements for initial entitlement, requires only that the child not be married when he or she applies. Marriage and divorce terminate receipt not initial entitlement.
Re-entitlement rules do not apply when the child’s benefits end because of the parent’s disability ended. If the parent becomes entitled to disability benefits again or retires or dies, the initial entitlement provisions apply. POMS DI 10115.035
There is also and exception to the exception discussed above in that initial entitlement rules will apply if the child applies for benefits on the other parent’s account, where a child marries and loses benefits on one parent account, and after divorce and based on the other parent’s account.
You Must have the required work credits, and your health problems must:
* Keep you from doing any kind of substantial work (described below), and
* last, or be expected to last for at least 12 months in a row, or result in death.
You must be age 18 or older, and your health problems must:
* begin before age 22 or you must become disabled again within 7 years after the month that your earlier period of disability ended, and
* keep you from doing any kind of substantial work (described below), and
* last or be expected to last for at least 12 months in a row, or result in death.
You must be at least 50 and you health problems must:
* Keep you from doing any kind of substantial work (described below), and
* last, or be expected to lat for at least 12 months in a row, or result in death, and
* have started before the end of a special period.
The special period starts with the latest of:
* the month your spouse died, or
* the month your Social Security benefits as a parent ended, or
* the month your earlier period of widow(er)’s disability ended.
The special period ends at the close of the 84th month (7 Years) after the month it started.
The date alleged for an onset of disability "AOD" is the date from which entitlement to Social Security Disability Insurance benefit entitlement (less the 5 month elimination period for financial entitlement and payments), SSI (Immediate entitlement to payment of funds on AOD), Medicaid (Immediate entitlement on AOD) and Medicare (less the 2 year elimination period) entitlements run. The AOD should be the first day when a claimant was unable to engage in SGA, "Substantial Gainful Activity". This term of art when broken down essentially means, "Could a claimant work a 40 hour week without significant interruption from symptoms and/or need for treatment?" AND, no matter how sick the claimant was, and no matter how many work days the claimant missed, was the claimant still able to make gross earnings of $940 per month? If the answers to both are "No", then the claimant is unable to engage in SGA and hence, is disabled by the required definition AOD and SGA have different applications and erroneous interpretations by those unfamiliar with the application of the term. For example, In cancer cases, the patient is most often denied because the SSA will take a wait and see attitude. This is because people do get better and the applicant must be incapable of SGA for at least 12 months after their AOD..
Regarding the proper onset date of disability within the AOD, it is important to get the right onset date, as the wrong date holds up the SSD/SSI process until the proper date is decided by a judge. I have had cases, where, for example a bipolar adult will say the onset of disability began in 1977 when he was 8, but he worked until 2002 when he had a nervous breakdown from which he never recovered or returned to work. Such a case was won by seeing the error and filing a written formal motion to move the onset date to the last day of continuous work i.e., first day of psychiatric hospitalization. Unfortunately, we do not get these type of files until they are ready for hearing and people have suffered too long.
So getting the proper AOD is very important. It is why an attorney should be consulted immediately after a claim is denied, so that one does not necessarily have to wait for a hearing
If I am struggling with a physical or mental diagnosis and problem and I am still working part-time, should I file for Social Security Disability or SSI?
If you are still working and earning gross wages of $940.00 per month or have not worked “on the books” for 5 of the last 10 years and gained sufficient "quarters" i.e. 20, you do not financially qualify for SSD or SSI no matter how sick you are., As of 2008, if you earn more than $740/mo or have property in excess of $2,000.00 you are not entitled to SSI. When you cannot make this amount due to your physical or mental conditions then file for Social Security Disability and contact us to set and appointment and look at your case.
Generally substantial work is physical or mental work you are paid to do. Work can be substantial even if it is part-time. To decide if your work is substantial, SSA considers the nature of the job duties, the skills and experience you need and to do the job, and how much you actually earn.
Usually, the SSA will find that work is substantial if your gross earnings average $830.00 per month after SSA deducts allowable amounts. This amount is higher for Social Security disability benefits due to blindness
Your work may be different than before your health problem began. It may not be as hard to do and your pay may be less. However, SSA may still find that your work is substantial under their rules.
If you are self-employed, we consider the kind and value of your work, including your part in the management of the business, as well as your income, to decide if your work is substantial.
|Disability Standard:||Same for both programs||Same for both programs|
|Source of Payment||Social Security Trust Fund||General Revenue|
|Amount of payment:||Based on worker’s earnings||
Federal amount set by Congress plus state supplement, if any, set by state. State Supplement amount may vary according to living arrangement.
|Payment to Children:||Yes, additional payment based on earnings records to children under age 18 or under age 19 And still in high school.||No increased federal payment for child; but some state SSI supplements add money for Children. Otherwise, children may receive welfare, which is not counted as income; i.e., welfare does not reduce SSI benefit amount.|
|Payment to spouse:||Yes, if child in spouse’s care is under age 16 or is disabled. There is an income limit for Spouse’s payment||No increased federal payment but some state SSI supplements add money for spouse.|
|Earnings requirement:||Fully insured (1 QC for each year after age 21): and disability insured status (20/40 rule)||None|
|Asset limitation:||None||$2,000 individual, $3,000
|Unearned income limit:||None||A small amount is disregarded; the rest is deducted from SSI benefit.|
|Earned income limit:||Same for both programs for claimants; SGA results in step one denial||After individual is receiving benefits, SSI has more liberal rules designed to encourage work.|
|Waiting period:||Five full months from date Of onset of disability||For applications on or after August 11, 1996, payment begins with first of month after all requirements are met. For earlier applications, payment begins with date of application if all requirements are met.|
|Retroactivity of application:||12 months if all requirements are met||No retroactivity.|
|Time limit for reopening:||4 years||2 years|
|Payment processing office:||Baltimore or regional payment center||Local Office|
|Payment applies to:||Previous month||Current month|
|Payment Date:||Varies by birthday except concurrent cases paid on 3rd of month||1st day of month|
|Check says:||SOC SEC FOR INS.||SSI|
|Attorney’s fees:||25 percent of past due benefits withheld for direct payment||No witholding.|
|Medical coverage:||Medicare begins after receipt of 24 months of benefits.||Medical coverage in most States begins with entitlement to SSI (sometimes 3 months before).|
|Eligibility of legal aliens:||Eligible||Aliens who were lawfully residing in the U.S. on August 22, 1996 are, for the most part, eligible for SSI disability benefits; but those who arrive later are ineligible with limited exceptions.|
If you are an American or documented worker who has worked in this country for at least 5 of the last 10 years, the deductions made for your Social Security taxes have been placed into a fund for you to be paid to you as a monthly income should you become disabled according to the social Security administration Guidelines.
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If you are under the age of 65 and are disabled and have sufficient earning credits as determined by the Social Security
Administration (SSA) you are entitled to Social Security Disability Income (SSDI) benefits. If you do not have enough credits to
qualify for SSDI you may still qualify for Supplemental Security Income (SSI) benefits. The amount of your SSI payments will
depend on the household income and assets.
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Amounts vary but you may be eligible to receive between $650.00 per month to $2,000.00 per month from the Social Security Administration
and perhaps more depending on what you have paid into the system and the number of legal dependents living in your home. Social Security
Administration states that as of December, 2002, the average monthly benefit for disabled workers in Florida is $838.00 and $246.00 for
dependents of disabled workers.
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If you are accepted as disabled by the Social Security Administration (SSA) you will be eligible for Medicare. If you are disabled and under the age of 65, your medical bills are covered by the state Medicaid program for the first two years after you become disabled. During this time you may select coverage under an approved Medicaid HMO to reduce co-pays or out-of-pocket expenses. Your minor children and dependents may also be entitled to Medicaid coverage after you are determined disabled.
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No one needs good medical care more than the disabled. Moreover, medical treatment records from your treating physicians provide the most important evidence of disability in a social security case. Obtaining medical reports and sending your doctor the proper forms and questionnaires concerning your care may be something best left for an experienced lawyer to do.
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As workers age, it becomes easier to be found disabled. If you are 45 and you cannot do any job you have done in the past 15 years and have a severe mental or physical impairment that keeps you from doing all but the easiest jobs, you should apply for Social Security Disability (SSDI) and supplemental Security Income (SSI). Younger persons and children are also eligible for benefits. The rules about social security disability are complex, however. The one sure thing that will keep you from getting disability benefits is not applying for benefits or not appealing a denial of benefits.
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Of the people who apply for SSD, over 50% are turned down (from SSA stats). Fewer than 50% of those who are turned down appeal. Of those who appeal, over generally 50% are accepted disabled. You should not be discouraged by an SSA representative from filing. You should not necessarily believe them when they tell you that you are not disabled.
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If you really can not work in a full time or regular scheduled part time capacity due to injury or illness that has prevented you from working or will keep you from working for 12 months or more, apply for Social Security Disability (SSD) and Supplemental Security Income benefits. If you are tuned down you will have 60 days to file your appeal. Keep appealing denials at least through the hearing before an Administrative Law Judge. If you fail to file your appeal, you may lose valuable rights to you entitlement to SSD/SSDI benefits. Remember, the law does not help those who sit on their rights. According to the Social Security Administration, the biggest mistake people make when trying to get disability benefits is failing to appeal or waiting too long (more than 60 days) to file their “Request for Reconsideration” and/or “Request for Hearing”.
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As a rule, a person does not need a lawyer to help to file an application. After the application is filed, however a lawyer’s help may make the difference between winning and losing even at the initial application stage. The SSA allows non-attorneys to represent claimants. These non-attorneys are not regulated or subject to Professional and Disciplinary Standards as Licensed Attorneys are. These non-attorneys may not even have a high school diploma and can charge the same fees as a licensed attorney and do not carry insurance to compensate their clients, should they fail to represent your properly. Moreover, these representatives and their firms cannot represent you after Appeals Council stage. Only a properly licensed attorney can handle your case from initial filing through hearing and appeal into Federal District Court and Circuit Courts of Appeal and into the United States supreme court if necessary.
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Attorneys fees are limited to 25% of the award of your past due benefits. That is one-fourth of those benefits that build up by the time you are found disabled and benefits are paid. Fees are also capped administratively with the Social Security Administration so that the cap can be even less than 25% of past due benefits in excess of $25,000.00. Under no circumstances do fees come out of current monthly benefits.
You can have a representative, such as an attorney, help you when you do business with Social Security. SSA will work with your representative, just as they would with you.
For your protection, your representative cannot charge or collect a fee from you without first getting written approval for SSA. However, your representative may accept money from you in advance as long as it is held in a trust or escrow account.
Both you and your representative are responsible for providing SSA with accurate information. It is illegal to furnish false information knowingly and willfully. If you do, you may face criminal prosecution. That is why you need to complete your paperwork TRUTHFULLY for your attorney to submit.
Once you appoint an attorney, he or she can act on your behalf in most Social Security matters by:
* Getting information from your Social Security file;
* Helping you get medical records or information to support your claim;
* Coming with you, or for you, to any interview, conference, or hearing you have with SSA;
* Requesting a reconsideration, hearing or Appeals Council review; and
* Helping you and your witness prepare for a hearing and questioning any witnesses.
Your representative also will receive a copy of the decision(s) SSA makes on your claim.
You can choose an attorney or other qualified person to represent you. You also can have more than one representative. However, you cannot have someone who has been suspended or disqualified from representing others before the Social Security Administration or who may not by law, act as a representative. Attorneys who have active licenses can represent you, but check on their experience and record. Some organizations can help you find an attorney or give your free legal services if you qualify. Our attorneys do not charge unless you receive benefits.
You can appoint one or more people in a firm, corporation or other organization as your representative, but you may not appoint the firm, corporation or organization itself.
After you choose a representative, you or your attorney must tell SSA in writing as soon as possible. To do this, get Form SSA-1696-U4, Appointment of Representative, from the SSA website ( www.socialsecurity.gov ) or from any Social Security office. We take care of this detail for you once we are retained, otherwise you must give the name of the person you are appointing and sign your name. If the person is not an attorney, he or she must give his or her name, in writing, state that he or she accepts the appointment and sign the form.
To charge you a fee for services, your attorney or representative first must file either a fee agreement or a fee petition with the SSA.
Your representative cannot charge you more than the fee amount the SSA approves. If you or your representative disagree with the fee the SSA approves, either of you can ask us to look at it again.
A representative who charges or collects a fee without the SSA’s approval, or charges or collects too much, may be suspended or disqualified from representing anyone before the Social Security Administration and also may face criminal prosecution.
If retained we will file all the necessary paperwork for you. If you and your attorney/representative have a written fee agreement, your representative may ask the SSA to approve it any time before SSA decides your claim. Usually, the SSA will approve the agreement and tell you in writing how much your representative may charge as long as:
* You both signed the agreement;
* Your claim was approved and resulted in past due benefits; and
* The fee you agreed on is no more than 25% of past-due benefits or $6264.50, whichever is less.
If the SSA does not approve the fee agreement, the SSA will notify you and your representative in writing that your representative must file a fee petition.
Your representative may give the SSA a fee petition after completing the work on your claim(s). This written request should describe in detail the amount of time spent on each service your representative provided. Your representative must give you a copy of the fee petition and each attachment. If you disagree with the fee requested or the information shown, contact the SSA within 20 days. The SSA will consider the reasonable value of representative’s services and tell you, in writing, the amount of the fee the SSA will approve.
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The amount of the fee the SSA decides your representative may charge is the most you owe for his or her services even if you agreed to pay your representative more. However, your representative can charge you for out-of-pocket expenses, such as medical report, with out your approval. These expenses are not paid to your attorney by the SSA or deducted from your reward.
If an attorney or non-attorney whom Social Security has found eligible for direct payment represents you the SSA usually withholds 25% ( but never more) of your past-due benefits to pay towards the fee. The SSA pays all or part of the representative’s fee from this money and send you any money left over.
Sometimes you must pay your representative directly:
*your representative is not eligible for direct payment;
*the SSA did not withhold 25% from your past-due Social Security or Supplemental Security Income Benefits, or both; or
*Your representative made a timely request for a fee and the SSA sent you the money that the SSA should have withheld.
You must pay for out-of-pocket expenses your representative incurs or expect(s) to incur (For example, the cost of getting your doctor’s or hospital records, etc.) The Law Offices of Mike Murburg P.A. will advance we and pay these reasonable costs in advance for you. We ask for reimbursement only if you win.
Even when someone else will pay the fee for you (for example, an insurance company), the SSA must approve the fees unless:
* It is a nonprofit organization or federal, state, county or city agency that will pay the fee and any expenses from government funds; and
* Your representative gives us a written statement that you will not have to pay any fee or expenses. At Mike Murburg P.A. we work for the disabled client, Not the government or insurance company.
The court can allow a reasonable fee for your attorney. The fee usually will not exceed 25% of all past-due benefits that result from the court’s decision. Your attorney cannot charge any additional fee for services before the court. Your attorney may elect to be paid with your consent under the Equal Access to justice Act, but this will require a separate contract.
What can I do if I want to obtain a private attorney to represent me but I have been unable to find one?
If you do not choose to have us represent you or you want to find another attorney or representative, a private attorney may be obtained by contacting the organization shown below. You will be referred to a private practicing lawyer who is familiar with representing claimants before the Social Security Administration, like we do at Mike Murburg P.A.. Some private attorneys may be willing to take your case under a fee agreement whereby no fee will be charged unless your claim is allowed. The attorney must first obtain approval from the Social Security Administration for any fee charged. For help in obtaining a social security attorney in your area contact the National Organization of Social Security Claimants Representatives, 6 Prospect Street, Midland Park, NJ 07432, tel. 800-431-2804.
The attorneys at the Law Offices of Mike Murburg P.A. are members of NOSSCR.
As a general rule it is better to contact an attorney earlier rather that later. A licensed attorney has had to excel academically in 4 years of college, pass his courses during his or her pursuit of a Doctoral degree during three years of Law School and to pass a 2 to 3 day long examination for the State Bar and pass an in depth background check to be sworn in to represent you in this area. Additionally a licensed attorney is ethically bound to expeditiously and zealously prosecute your claim. By the rules that control licensed attorneys, the earlier you get your disability benefits, the lower the attorneys fees will be on those past benefits. Non-lawyers are not licensed or required to expeditiously and zealously represent you or to expedite your claim. The SSA now applies its complex processes, making the help of an experienced lawyer even more important.
In addition to the fee, your representative may charge you for the expenses of gathering medical records, obtaining medical opinion letters, etc. Costs rarely run over $200.00, and if we are unsuccessful in obtaining your disability benefits for you, you will not owe us for either costs or fees for the time we spend on your behalf.
You can telephone the SSA at 1-800-772-1213 and select the option of either having your application taken over the telephone or by going to your local social security office to apply for benefits. The 800 number is open between 7:00 a.m. to 7:00 p.m. The teleservice is most busy on Mondays and Tuesdays and between 10:00 a.m. and 3:00 p.m. daily.
Yes. Once you call SSA and actually talk to a claims representative, always ask for his or her telephone number. They are unlisted and you cannot get them from the phone company. Do not lose the number, save the number so you can re-contact your claim representative in 3 or 4 days for a follow-up.
The SSA is a gigantic bureaucracy. Make sure to write down the names, dates and location of everyone you talk to at SSA and if you complete forms always keep copies and if at an SSA office, ask to be provided with stamped and dated copies of the records you submit. Organize your records in a file and always bring your own records to the SSA office and ask for a supervisor if you have a problem.
Finally, dealing with the SSA can be frustrating and disheartening. Do not let yourself despair. Seek help if you need it and never, never, never give up.
We always recommend that our clients not live their lives for a lawsuit or a Social Security Disability claim. If you can return to work and do and subsequently fail, the Social Security Administration may deem that an unsuccessful return to work, if the monies you earn are not significant or your return to work lasts generally less than six months. If you return to work and succeed, you may have your claim changed from an open ended period of disability to a closed ended period of disability, as long as your disability made you unable to work for twelve months or more. If your return to work is successful, please let us know in writing and as to whether you want to continue on with either an open ended or closed ended period of disability.
What if I have investment income, (stocks, bonds, rental income)?
That does not generally constitute substantial gainful activity, unless you are substantially active in producing that income. This gets a bit difficult with dividends from a small business or corporation and with rental income, as these often involve some gainful activity to produce the income other than just receiving and depositing a check or moving monies from place to place on your computer. Of course, work and investment income will affect directly your SSI (Supplemental Security Income) claims as there is a need based financial offset involved.
While medical factors alone may justify a finding that the claimant is or is not disabled, it is necessary in some cases to consider vocational factors in order to determine whether or not the claimant is able to engage in any substantial gainful hearing, with respect to the claimant's residual functional capacity. The expert will not be expected to testify as to whether or not the claimant is under a disability, since he does not have the responsibility for deciding this ultimate legal issue. The expert will not express any opinion regarding the impairments involved and their effects on residual activity. A vocational expert may be called by the Social Security Administration to testify about your employability. Two basis questions will be presented at your hearing as follows:
The first question pertains to the kind of work, if any, the claimant can do in light of prior work activity and residual functional capacity considering age, education, training and work experience, as well as physical and mental restrictions. The expert's testimony will be predicated on various assumptions, posed at the functional capacity, since these are medical matters. The expert will be requested to furnish a rationale and complete explanation for his or her opinions. In forming the expert's judgment as to whether or not the claimant could transfer vocational skills to any other type or work, the expert will be requested to consider only work which the claimant could perform after a normal period of training, usually given to new employees, rather than after extended vocational rehabilitation.
The second question is whether any work a claimant could do exists in the "national economy"; i.e., whether it exists in significant numbers either in the region where the claimant lives or in several other regions of the country. The expert should be prepared to testify from personal knowledge gained from vocational surveys of businesses and industries (whether such surveys were made by the vocational expert or by the other vocational experts) and from other current vocational resource materials.
Questions may also be asked of the expert by the claimant or representative who will be entitled to cross-examine the vocational expert.
Why shouldn’t I just file for my Social Security Retirement Benefits early and not file for Social Security Disability?
There are advantages of receiving Social Security disability benefits. When people think of Social Security, they think of retirement benefits. But Social Security also provides financial protection in the event that you suffer a serious disability, regardless of your age. This protection is provided under the Social Security Disability Insurance program (SSDI). Think of Social Security as an insurance program that you paid for through Social Security (FICA) taxes that were deducted from your paycheck.
There are a number of advantages to receiving Social Security disability benefits. Depending on your individual circumstances, advantages may include:
Higher Social Security retirement benefits: Generally, Social Security retirement benefits are calculated based on your average earnings during your working life. For people whose earnings have been reduced due to disability, this can mean lower retirement benefits. However, if you are approved for Social Security disability benefits, your Social Security retirement benefits will be calculated based on your earnings before your became disabled.
The impact of SSDI on your Social Security retirement benefit is significant. For example, an individual earning $50,000.00 a year who became disabled at age 40 and remained disabled until retirement would receive more than $130,000.00 in additional retirement benefits over a 20-year retirement:
We therefore recommend that you protect your future retirement benefits by filing for Social Security Disability.
Medicare eligibility: If you are found to be disabled, you will become eligible for Medicare 24 months after your Social Security effective date, regardless of your age. This is important, especially if you do not have or cannot afford private health insurance.
Automatic cost of living increases: Every year, Social Security gives SSDI recipients an increase in their benefits based on the Consumer Price Index.
Yes. If you are approved for SSDI benefits, other family members may also qualify for benefits.
Generally, benefits will be available for:
• Children under 19 who have not finished high school• A spouse who is caring for a child under the age of 16• A spouse over age 62
To avoid unnecessary delays, apply for SSDI dependent benefits at the same time you are applying for your own benefits.
A non-citizen may receive Supplementary Security Income (SSI) if he or she meets the requirements of the laws for non-citizens that went into effect on August 22, 1996 and all the other requirements for SSI eligibility, such as the limits on income and resources.
In general, beginning August 22, 1996, most non-citizens must meet 2 requirements to be potentially eligible for SSI:
1. Be in a “qualified alien” category and 2. Meet a condition that allows qualified aliens to get SSI.
There are 8 categories of “qualified aliens”. The categories are:
1. Lawfully admitted for permanent resident in the U.S. (“LAPR”), including certain “Amerasian immigrants”.2. “Conditional Entrants” under the law in effect before April 1, 1980;3. Paroled into the U.S. for certain reasons for a period of one year or more;4. Refugee;5. Granted asylum;6. Deportation or removal is being withheld for certain reasons;7. Cuban and Haitian entrant under the Refugee Education and Assistance Act of 1980; or8. One of certain aliens who have been subjected to battery or extreme cruelty or whose child or parent has been subject to battery or extreme cruelty.
A “qualified alien” is potentially eligible for SSI if he or she meets one of the following conditions:
1. Was receiving SSA on August 22, 1996 and is lawfully residing in the US;2. Is lawfully admitted for permanent residence and has 40 qualifying quarters of work. Work done by a spouse or parent may be counted toward the 40 quarters of work. Some restrictions may apply if the non-citizen or the working spouse or parent received certain Federally funded benefits after December 31, 1996;
Important: If you entered the U.S. on or after 8/22/96, then you may not be eligible for SSI for the first five years as an LAPR even if you have 40 qualifying quarters of earnings.
3. Is an active duty member of the U.S. armed forces, one of certain honorably discharged veterans, or one of certain dependents of U.S. military personnel;4. Was lawfully residing in the United States on August 22, 1996 and is blind or disabled;5. Filed for SSI within 7 years of being granted status as a refugee, asylee, Cuban and Haitian entrant, Amerasian Immigrant, or deportation or removal is being withheld.
A qualified alien in one of these categories may be eligible for a maximum of 7 years from the date status was granted. If a qualified alien in one of these categories also meets one of the conditions listed above, then SSI can continue beyond the 7 - year period. In addition to qualified aliens who must meet a a condition for eligibility, there are certain categories of non-citizens who are exempt for SSI. These categories include certain Canadian-born American Indians and non-citizens members of a Federally recognized American Indian tribe.
A non-citizen may also be eligible under certain circumstances if the Department of Health and Human Services determines that he or she meets the requirements of the Trafficking Victims Protection Act of 2000.
If I don’t have any regular health care, how do I get medical treatment while I am waiting for a decision from the Social Security Administration?
You can seek health care from your county health department. Links for local health departments are listed below:
Citrus County - www.doh.state.fl.us/chdCitrus/index.htmHernando County - www.health.co.hernando.fl.us/Hillsborough County - http://188.8.131.52/Pasco County - www.doh.state.fl.us/chdPasco/default.htmlPinellas County - www.pinellashealth.com/index.aspSarasota County - www.sarasotahealth.org/
The attorneys at Mike Murburg, P.A. are all well seasoned trial attorneys whose skills, much like those of a skilled surgeon, are honed by trying numerous cases on a weekly basis. Like a heart, eye or neurosurgeon, you will meet your attorney initially, then for a pretrial (surgical) preparation and then just before and during the trial (surgery).
At Mike Murburg, P.A. you will be interviewed by an attorney at the onset of your case. That attorney will be the one whose staff will be in charge of your file.
When your case gets to the hearing stage, our staff will send you a fairly extensive questionnaire that you must complete for us since these questions are the ones whose answers your attorney will be reviewing with you when you meet with him or her for your pre-hearing work-up.
The questionnaire you will complete for us was developed by the attorneys at Mike Murburg, P.A. to be extremely comprehensive and has taken over 16 years to develop. It literally contains every question and area of inquiry your Social Security judge can or will normally ask. So it is absolutely necessary that you complete and answer all questions and return it to our office prior to your second meeting with your attorney at your pre-trial work-up. Your attorney will talk to you about the hearing process, procedures and protocol and about the judge that will hear your case.
Please note that if you have moved or your hearing is outside the Tampa Bay - West Coast of Florida area, your meeting will be telephone or done via computer-telecamera over the internet. At your second meeting, your attorney will review your answers with you and make his own notes and highlight the important facts and issues in your case. The third time you see your attorney will be the Social Security Administration office where your case will be tried. We usually arrive about an hour early for your hearing. The attorney will review the judge’s file to make sure all exhibits are in your Social Security Administration file and have copies made to supplement your file if necessary. Then your attorney will meet with you to review any last minute facts and issues and answer any of your remaining questions prior to the hearing. The judge will ask your attorney if he has personally reviewed your file that morning and to let the court know of any objections and will confirm that your attorney has received the file and all pertinent issues with you, so we are very careful that this is all done.
The hearing is generally informal (only you, the judge, assistant and a medical or vocational evaluator will be in the hearing room) and you will be seated before the judge with your attorney. Your attorney, the judge or both will direct questions to you and any subsequent medical or vocational witnesses who may testify after you.
When your hearing is over the Court will “close the record” and your attorney will let you and the Court know that the attorney and you are getting up to leave by asking “May we be excused now?” When the Court acknowledges this, you both may get up and leave the hearing room.
Just like a surgeon after surgery, your attorney will discuss any questions you may have subsequent to the hearing and await your favorable decision. If the decision is fully favorable, as it is in the vast majority of the cases we accept, you will not need to meet with your attorney again. If your decision is partially favorable or unfavorable, a fourth meeting with him or her will be scheduled to discuss the trial record and appeal to the next level and into Federal District Court. If your case is reversed and remanded you will see your attorney once again for another pre-trial work-up and at your rehearing should your case be remanded for trial by the Federal District Court Magistrate or Judge who reversed the Social Security Administration judge’s unfavorable decision.
Ultimately, if you obtain a favorable disability ruling, you will not need or want to see your attorney, unless you just want to stop by and say thank you.
As you approach the age when you can receive Social Security retirement benefits, you have options to consider and decisions to make. Before making your retirement decisions, a filing for disability, we hope you will consider all the options.
There are important questions that you need to ask yourself. At what age do you want to begin receiving benefits? Do you want to stop working and receive benefits? Do you want to work and receive benefits at the same time? Or do you want to work beyond your full retirement age and delay receiving benefits? Will it be financially advantageous to go on disability and file for retirement?
When you continue working beyond full retirement age, your benefits may increase because of your additional earnings. If you delay receiving benefits, your benefits will increase because of the special credits you will receive for delaying your retirement. This increase benefit could be important to you later in life. It also could increase the future benefit amounts your family and survivors could receive. This is why you should also consider filing for SSDI if you are incapable of working the equivalent of a 40 hour work week due to physical or mental limitations.
Each person’s retirement situation is different. It depends on the circumstances such as health, financial needs and obligations, family responsibilities, amount of income from work and other sources. It also may depend on the amount of your Social Security benefit.
We hope the following information will help you make your retirement decision.
Yes. If you are approved for SSDI benefits, other family members may also qualify for benefits.
Generally, benefits will be available for:
- children under 19 who have not finished high school
- a spouse who is caring for a child under the age of 16
- a spouse over age 62
To avoid unnecessary delays, apply for SSDI dependent benefits at the same time you are applying for your own benefits.
No matter what your circumstances, you should apply for Social Security disability benefits immediately. Social Security will pay benefits retroactively for 12 months prior to your filing date. By waiting, you may lose retroactive benefits and delay your entitlement to Medicare. Moreover, even though you have paid into the system, you are not insured forever and eligibility for SSD benefits will evaporate if you are not found to be disabled prior to your date of being last insured (usually 4 to 5 years after you were last gainfully employed). Finally, waiting may make it more difficult to gather the information that you need to support your claim. In addition, waiting may make it more difficult to gather the information that you need to support your claim.
Not necessarily. You can continue to receive Social Security benefits for at least nine months after you return to work. If you can’t continue to work beyond this nine-month period, your Social Security benefits will continue.
In addition, your Medicare will continue for at least 8 ½ years after you return to work. These work incentives allow you to test your ability to work without fear of losing your benefits.
For more information regarding work incentives, see the “Red Book on Work Incentives” published by the SSA - www.ssa.gov/work/ResoucesToolkit/redbook_page.html.
To expedite your SSDI claim, gather the following information:
• Your Social Security number.
• Contact information for doctors and hospitals that have treated you, including dates.
• Your most recent W2.
Call 1-800-772-1213 or contact your local Social Security office to apply for benefits.
Apply for dependent SSDI benefits at the same time.
Submit the following documents to your Long Term Disability case manager.
• Social Security Reimbursement Agreement
• Authorization to Release Social Security Claim Related Information
• Family Information Questionnaire
• Your receipt of application from Social Security
Call your Long Term Disability case manager if you have any questions or concerns about applying for SSDI benefits.
Be persistent. Social Security disability benefits can help you and your family significantly.
Retiring at full retirement age - To retire, you must have earned 40 credit. See the table below to determine your full retirement age.
|Year of Birth||Full Retirement Age|
|1937 or earlier||65|
|1938||65 and 2 months|
|1939||65 and 4 months|
|1940||65 and 6 months|
|1941||65 and 8 months|
|1942||65 and 10 months|
66 and 2 months
|1956||66 and 4 months|
66 and 6 months
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 or later||67|
* Refer to the previous year if you were born January 1st.
Retiring early - If you’ve earned 40 credits, you can start receiving Social Security benefits at 62 or at any month between 62 and full retirement age. However, your benefits will be permanently reduced based on the number of months you receive benefits before you reach full retirement age.
If your full retirement age is 66, they will be reduced:
25% at age 62;
20% at age 63;
13 ½ % at age 64; or
6 2/3 % at age 65.
Receiving retirement benefits while you work - You can work while receiving monthly benefits. And it could mean a higher benefit that can be more important to you later in your life and increase future benefits your family and survivors could receive.
The SSA will review your record each year to see whether the additional earnings will increase your monthly benefit. If there’s an increase, the SSA will send you a notice of you new benefit amount. Earnings in or after the month you reach full retirement age won’t reduce your Social Security benefits. However, if you receive benefits before reaching your full retirement age, your benefit amount will be reduced, unless you have been determined disabled by the SSA.
* In the year you reach full retirement age $1 in benefits will be deducted for each $3 you earn above the annual limit ($36,120 in 2008) until the month you reach full retirement age. After that, your benefits will not be reduced, no matter how much you earn.
* In the years before you reach full retirement age, $1 will be deducted for each $2 you earn above the limit ($13,560 in 2008).
If you lose benefits because of work, your benefit will be increased later to account for the months you didn’t receive benefits before reaching full retirement age.
Delaying Retirement - You may decide to continue working beyond your full retirement age without choosing to receive benefits. If so, your benefit will be increased by a certain percentage for each month you don’t receive benefits between your full retirement age and age 70. This table shows the rate your benefits will increase if you delay retiring.
|Year of Birth||Yearly Increase Rate|
|1943 or later||8.0%|
Applying for Social Security Retirement Benefits and Medicare - It’s best to contact Social Security three months before the month in which you want to receive benefits to discuss the options that are available to you. In some cases, your choice of retirement month could mean additional benefits for you and your family.
Even if you don’t plan to receive benefits because you’ll continue working, or if you have filed for disability you should sign up for Medicare three months before reaching age 65 regardless of when you reach full retirement age. Otherwise, your Medicare medical insurance (Part B) could be delayed and you could be charged a higher premium.
You can apply on line at www.socialsecurity.gov/applyforbenefits or by calling 1-800-772-1213 between 7a.m. and 7p.m., Monday through Friday. If you are deaf or hard of hearing, call our TTY number 1-800-325-0778, between 7a.m. and 7p.m., Monday through Friday. , to file your claim. You also can apply at any Social Security office. To avoid having to wait, you may want to call first to make an appointment.
Be sure to have these items handy: your Social Security number, birth certificate, W-2 forms or self-employment tax return for last year, and your bank name and account number so your benefits can be deposited directly into your account.
In addition to the information listed above, you will need:
* Your military discharge papers if you had military service;
* Your spouse’s birth certificate and Social Security number and your marriage certificate if he or she is applying for benefits; and
* Proof of U.S. citizenship or lawful immigration status if you were not born in the United States.
You will need to mail or deliver original documents or copies that have been certified by the issuing office to the Social Security office.
You also have options for getting information about Social Security and retirement. Visit the “Plan your Retirement” section of the SSA’s website to estimate your Social Security benefits, find answers to frequently asked questions about Social Security, learn about factors that could affect your benefits and much more. And you can get information about Social Security by visiting a local Social Security office or by calling 1-800-772-1213
You can print these publications from the SSA website.
*Retirement Benefits (publication No. 05-10035)
*Your Retirement Benefits: How It Is Figured (publication No. 05-10070); and
*How Work Affects Your Benefits (publication No. 05-10069)
For more information, visit the SSA website at www.socialsecurity.gov or call toll free, 1-800-772-1213 (for the deaf or hard of hearing, call the TTY number, 1-800-325-0778).The SSA can answer specific questions from 7a.m. to 7p.m. Monday through Friday and can provide information by automated phone service 24 hours a day.
The SSA will treat all calls confidentially, and also wants to make sure you receive accurate and courteous service. That is why the SSA will have a second Social Security representative monitor some telephone calls, so be sure to be courteous and kind as well.
So we hope that this information has been helpful. If you need any further information concerning the inter-play of disability, (SSDI) and retirement and which would benefit you and your family prior to reaching full retirement age contact us through this website.
Yes. According to the Social Security Administration you can file your appeal after 60 days if you have good cause for late filing.
In determining whether the claimant had good cause for failure to file a timely appeal request SSA considers:
a. whether circumstances impeded the claimant’s efforts to pursue his/her claim;
b. whether SSA/CMS actions were confusing or misleading;
c. whether the claimant understood the requirements of the Social Security Act (the Act), resulting from amendments to the Act, other legislation, or court decisions; and
d. whether the claimant’s physical, mental, educational, or linguistic limitations (including any lack of facility with the English language) prevented him/her from filing a timely request or from understanding or knowing about the need to file a timely request for appeal.
NOTE: Good cause for late filing may apply to any person standing in the place of the claimant, like the claimant’s representative or attorney.
Some examples of Good Cause are:
Circumstances where good cause may exist include, but are not limited to, the following situations:
a. the claimant was seriously ill and was prevented from contacting SSA in person, in writing, or through a friend, relative, or other person;
b. there was a death or serious illness in the claimant’s immediate family;
c. pertinent records were destroyed or damaged by fire or other accidental cause;
d. the claimant was actively seeking evidence to support his/her claim, and his/her search, though diligent, was not completed before the time period expired;
e. the claimant requested additional information concerning SSA’s determination within the time limit. (After receiving the information, the individual has 60 days to request a reconsideration or hearing. The individual has 30 days after receipt of such information to request AC review or file a civil action);
f. the claimant was furnished confusing, incorrect, or incomplete information or was otherwise misled by a representative of SSA or CMS about his/her right to request continued benefits, reconsideration, a hearing before an Administrative Law Judge, AC review, or to begin a civil action;
g. the claimant did not understand the requirement to file timely or was not able (mentally or physically) to file timely;
h. a notice of the determination or decision was never received (e.g., SSA used incorrect address or claimant moved);
i. the claimant transmitted the appeal request to another government agency in good faith within the time limit and the request did not reach SSA until after the time period had expired;
j. the claimant thought his/her representative had filed the appeal (good cause applies to the claimant despite whether the claimant is still represented or represented by a different person);
k. unusual or unavoidable circumstances exist, which demonstrate that the claimant could not reasonably be expected to have been aware of the need to file timely, or such circumstances prevented him/her from filing timely.
Once my case has been reviewed and accepted into the Social Security Hearing process, What happens next?
Once your request for hearing is received by Social Security and forwarded along with your file to the Office of Disability Adjudication and Review (ODAR).
ODAR will send you a letter confirming receipt of your case.
ODAR will review your case to see if an immediate favorable decision without holding a hearing is possible. If not your case awaits its turn to be prepared for hearing. The file is prepared for and reviewed by and Administrative Law Judge (ALJ) and then scheduled for hearing. Because of the large number of cases ODAR receives each month, this process can take up to 24 months or more.
You will receive notification of the hearing date in the mail approximately 20 days in advance. If you have an attorney or other person representing you, he/she will also be notified. Contact your treating Physicians to make sure you have provided your attorney with all updated medical records.
You will attend your hearing and testify. The Judge will ask you questions or ask your attorney to ask you pertinant questions. Your testimony and your work and medical history will be reviewed by a Vocational Expert (VE) and/or a Medical Expert (ME), who is a medical doctor. Your attorney (as we are at Mike Murburg P.A.) should be skilled at trial and cross-examination, so that he can cross-examine these expert witness so that they can give testimony in your favor.
The ALJ will make his/her decision shortly following the hearing, providing no additional evidence has been requested.
The decision is then written, typed, corrected, and finally signed by the ALJ. It takes between six to eight weeks for the Judge to issue the decision.
In summary, you can expect to wait 24 months from the time you file your request until you actually have your hearing. You can expect to wait another 2 months until you receive your decision in the mail.
Since the decision is not final until written notice is sent, the outcome of the hearing can not be discussed with you over the telephone prior to your receipt of a written decision.
To expedite your Hearing Request, be sure to send in all available medical and/or non-medical evidence, or have your Attorney/Representative do so as soon as possible. This additional evidence could make the difference in the Judge deciding your case sooner. So you must keep your attorney updated as to all of your physicians and listing facilities and tests as your case progresses.
At Mike Murburg P.A. we are committed to providing quality public service and doing everything possible to help your case. Submitting additional evidence will enable us to process your hearing request more quickly.
Expeditious hearing requests are routinely denied unless a claimant meets at least one of three circumstances:
The first is whether the claimant is 55 years of age or older. This is because at 55, claimants fall into a less restrictive disability category. As a consequence, the claim is more easily decided by a Social Security Administration judge. We automatically file expeditious requests once all of our clients reach the age of 55.
The second category for expeditious handling is when the claimant is at a critical risk for death if emergency life saving surgery is not performed immediately. This must be put in writing by the claimant’s physician and given to us so that we can request an expeditious hearing on the claim.
The third area ripe for expeditious handling is when a claimant is in receipt of a Notice of Eviction, foreclosure or acceleration of mortgage payments.
Unfortunately, with the extreme backlog of cases pending with the Social Security Administration, these bases are just of historical note and are now seldom, if ever granted. We do file them with the Social Security Administration and make the request if and when our clients send such notice to us.
Unfortunately, there are no further bases under which to ask for an expedited hearing. We do not recommend that our clients contact their U.S. Senator or Congressman with their request unless they are a disabled American Veteran who has already received a VA in-the-line-of-duty disability award.
Remember that a request for an expedited hearing may only move your hearing up a few months. It is only in extremely rare cases that the request to expedite is granted and the hearing takes place within 90 days.
Florida Local Social Security Hearing Office Locations:
4925 Independence Parkway
Tampa, FL 33634-7540
Sun Trust Building
601 Cleveland Street, Room 410
Clearwater, FL 33755
Paddock Park, Building 400
3200 S.W. 34th Ave., Suite 402
Ocala, FL 34474
Glenridge Building, Suite 300
3505 Lake Lynda Drive
Orlando, Fl 32817
10100 Deer Runs Farm Road
Ft. Myers, FL 33966
DeSoto Building # 400
8880 Freedom Crossing Trail
Jacksonville, FL 32256-1224
200 E. Los Olas Blvd.
Ft. Lauderdale, FL 33301
Should I have my case heard by videoconference by a judge who does not preside in my home jurisdiction or court?
You have the absolute right for your case to be heard live by a Judge in your home state and jurisdiction. We know that you have been waiting for quite some time to have your case adjudicated, but we firmly advise against your case being heard by an out of state judge via a video link.
Technical difficulties aside, we advise against such hearings. Studies (especially those done by Stanley Milgram, et., al., at Yale and the progenies of those studies) have shown that persons who are outside of the actual physical presence of someone who can determine their reward or punishment are more likely to have negative results applied to their persons when they are not actually physically present with them. Though it may be apparent to you that a judge wants to help with your appeal by agreeing to hear your case by video link out of state or out of jurisdiction, it is our experience that these non-live hearings result in fewer favorable decisions and result in more lengthy appeals to the Appeals Council in Falls Church, Virginia after a disability video hearing. This, thereby actually extends the years one will have to eventually wait for his or her Social security Disability/SSI benefits.
By way of example, a video hearing is inadequate to show a judge how a Claimant’s cane handle may be well used or the end worn down. In a video conference it is impossible to convey a Claimant’s depression or full credibility to a judge via the video link, no matter how good that link is. More importantly, the Video-Judge will probably not know of our firm’s well earned reputation that the Judges we regularly appear before have of us or of our appellate record reversing judges’ denials of benefits. By choosing to have your hearing heard via video link with all its setbacks, one in essence gives this up and loses not only the “home field advantage” but his or her rights to a live hearing and a higher chance of winning their case. We advise against it. Even though it may be tempting and relief may seem to be closer the chances of success are illusory at best and lessened.
Social Security and Income Tax
This page gives general income tax guidance with citations, and should not be used as the basis for tax advice in individual cases. Taxpayers should always seek guidance from competent tax professionals, and should use this page only as an aid to asking the right questions.
Note: Social Security disability benefits and retirement benefits are treated the same for income tax purposes. SSI benefits are not subject to income tax.
- How should I handle income taxes on my retroactive lump sum payment of disability benefits?
- How much of my ongoing Social Security disability benefit is subject to income tax?
- What about my attorney fee for the disability appeal - is it deductible?
- I owe most of the Social Security lump sum to a long term disability carrier, so how do I avoid double taxation?
Lowering the tax impact of a lump sum.
Congress has provided a special election allowing a client to take advantage of the tax exempt base amount for each of the retroactive years represented in a Social Security lump sum. [I.R. Code §86(e); see I.R.S. Publication 915] In most cases, this special election will be desirable, because it enables the taxpayer to offset the lump sum with a multiple of base amounts, described below. Also, the election removes the need to amend prior tax returns.
Social Security is required to send each benefit recipient an SSA-1099 by February 1 of the following year, specifying how much of the Social Security benefit received in the lump sum was really a payment for some prior year or years. The 1099 also lists the attorney fee. These SSA-1099 forms are often inaccurate, and the taxpayer must use award notices to double check the 1099.
Income Tax on Social Security Benefits.
The Basic Rule. Up to 50% of Social Security benefits are taxable if total “provisional income” (adjusted gross income, tax-exempt interest and one half of Social Security benefits) exceeds a base amount: $25,000 for single taxpayers and $32,000 for married taxpayers filing jointly. At this level, taxes are payable on the lesser of (1) 50% of Social Security benefits received, or (2) one half of the difference between provisional income and the applicable base amount. Fortunately, this is the end of the income taxation picture for most recipients of disability benefits.
The Second Tier. A second tier of income tax - reaching up to 85% of Social Security benefits received - kicks in (1) for single taxpayers with provisional income over $34,000, (2) for married taxpayers filing jointly with provisional income over $44,000, and (3) for all married taxpayers who file separate returns, but do not live apart.
For these second-tier categories, income taxes are payable on the lesser of (A) 85% of Social Security benefits or (B) the total of (1) 85% of the difference between provisional income and the applicable adjusted base amount ($34,000/$44,000), plus (2) the lesser of (a) half the benefits or (b) $4,500 (for singles / $6,000 (for married couples filing jointly). The adjusted base amount for married persons filing separately but living together is zero; taxes are payable on the lesser of 85% of benefits or 85% of provisional income.
Attorney Fee Deduction. If a taxpayer discovers that some of the Social Security lump sum - when added to regular benefits received in the same year - turns out to be taxable, the attorney fee may be deducted from income, but only to the same extent that Social Security is taxed. For example, if a taxpayer paid tax on 50% of SSA benefits received, the taxpayer may deduct half of the attorney fee paid or incurred during the same year. [IRS Revenue Ruling 87-102] The taxpayer faces the burden of filing an itemized return, of course, and this limited deduction is further subject to the “2% of adjusted gross” ceiling on miscellaneous itemized deductions.
Worker’s Compensation Reduction. Social Security disability may be reduced for worker’s compensation and other public disability benefits. Oddly, the amounts deducted are included as benefits received for purposes of income tax. In effect, state worker’s compensation is rendered taxable in an amount equal to the Social Security reduction, but only to the extent that Social Security is taxable for the year. [I.R. Code §86(d)(3)]
Auxiliary [child or spouse] benefits. Benefits are included in the taxable income of the person who has the legal right to receive them. For example, a child’s benefits are added to the child’s other income (if any) to determine taxability, even though the benefits are paid on the parent’s earnings record. The child receives a separate SSA-1099.
Income Tax Withholding. Voluntary Tax Withholding (VTW) from Social Security benefit income will help some taxpayers avoid quarterly estimated tax payments or an onerous lump sum due by April 15th. To begin or modify a withholding request, submit completed IRS Form W-4V to a local Social Security office. The available withholding rates are 7, 10, 15 or 27 percent. The form is posted on the Social Security web site: www.ssa.gov/taxwithhold.html
LTD reimbursement. What if the taxpayer used all or part of a Social Security back payment to reimburse a long-term disability carrier? Special tax relief is available under §1341 of the Internal Revenue Code, again avoiding the need to amend a prior tax return. See IRS Publication 525. If the repayment to the LTD carrier is under $3,000, the taxpayer gets a deduction on the current year’s tax return. For repayments over $3,000, the taxpayer chooses either the deduction or a tax credit for the excess tax paid in the prior year. A subtle tax issue to watch: LTD reimbursements to the carrier also cause “phantom” taxable income in some cases, due to the separate 1099 forms issued for the year by SSA and by the carrier.
Deductions for the Self-Employed. Since the self-employed pay all of their Social Security and Medicare taxes, these workers receive a Social Security tax deduction and an income tax deduction at tax time, designed to achieve parity with the employed, who do not pay FICA or income tax on the value of the employer's FICA tax payment. For the Social Security tax deduction, the self-employed deduct 7.65% of net earnings before computing the tax at 15.3%. For the income tax deduction, 50% of the net social security tax liability (after applying the Social Security tax deduction above) is deducted from gross earnings as a business expense.