A person who had a disability prior to age 26 may now setup an ABLE Account, and anyone may contribute to such account; provided, however, that total contributions to the account may not exceed $14,000. The person with the disability may use the money for “qualified disability expenses,” such as housing and basic living expenses. The utilization of the ABLE Account funds for such purpose will not be considered in-kind support and maintenance. To demonstrate the value of these accounts, I am going to use two common examples:

Parents Did Not Charge Rent: Ron’s Case

Ron is a 19-year old with Down Syndrome who lives with his parents. Ron just started to receive SSI; but, because his parents do not charge him for food or shelter, he receives a 1/3 reduction of his full benefit amount due to in-kind support and maintenance. The monthly household food and shelter expenses total $2,175, and because Ron is one of three people living in the house, he is responsible for a total of $725. Because of the reduction in income, Ron is unable to start paying his parents his pro rata share of the household food and shelter expenses. An ABLE Account is established for the benefit of Ron, and Ron’s parents contribute $2,000 to the account. Ron will pay his parents his $725 share of rent (from a combination of his SSI check and his ABLE Account). The rent payments will be reported to the Social Security Administration, and the Social Security Administration will then increase Ron’s SSI check to the full $735. To continue to receive the full benefit amount, Ron must continue to pay his parents rent. (Bear in mind that earned and unearned income may also factor into Ron’s benefit amount, but this is for a later discussion). 

Household Expenses Too High: Jackie’s Case

Jackie is a 35-year old with Cerebral Palsy who lives with her sister. When Jackie moved in with her sister, her pro rata share of household expenses totaled $1,000 and the full SSI benefit was not sufficient to cover her pro rata share. As a result, Jackie received a 1/3 reduction in her benefit due to in-kind support and maintenance. Jackie established an ABLE Account and the Trustee of her Special Needs Trust distributed $5,000 to the account. Jackie can now pay her sister $1,000 to cover her pro rata share of the expenses (via SSI and her ABLE Account). The change in circumstances will be reported to the Social Security Administration who would then increase Jackie’s SSI check to the full $735 a month. From that point forward, Jackie’s Special Needs Trust will continue to distribute money into her ABLE Account so that she can continue to pay her pro rata share of household expenses and receive her full SSI check.

Ask Kit Kat – All About Skunks

Hook Law Center:  Kit Kat, what’s the latest information about skunks, and what should you do if your pet has encountered a skunk?

Kit Kat:  Well, this can cause some problems you might not anticipate, though, generally, your pet’s encounter with a skunk can be quite harmless. Usually, the skunk gives some warning before employing its ultimate weapon—the spray. Initially, you may notice the telltale smell, but there may be other symptoms like drooling, sneezing, or vomiting. More severe symptoms can emerge a few days later like lethargy and pale gums. If the more severe symptoms appear, immediately take your pet to the vet to be checked. In most cases, the severer symptoms occur after a direct spray to the face.

Now, how to deal with cleaning your pet after a potent spray. Ordinary pet shampoo will not be strong enough. You will need to make your own mixture composed of 1 quart of 3% hydrogen peroxide, ¼ cup baking soda, and 1-2 tsps. of dishwashing liquid. Lather your pet well and let it sit for about 5 minutes. Then, thoroughly rinse with lots of water. If your pet has long hair, you may want to consider clipping them before shampooing, because a shorter coat will foster more effective results. There may be some bleaching of the fur with this procedure, but it is not harmful to them. Repeat as necessary.

To prevent your house/property from being attractive to skunks, there are several things you can do. First, if you store food in your garage/shed like bird seed or dry pet food, make sure it is in well-sealed containers. Second, make sure areas around decks are blocked, so they cannot make their home there. Third, keep exterior lights at night on or install motion-activated lights. Skunks do not like light. Fourth, discourage their nesting in your yard by sprinkling kitty litter in front of their den/hole or stuffing it with twigs and leaves. This will let them know, that they are not welcome.

Hopefully, with this knowledge, you will be well-equipped to handle your pet’s skunk encounter. If your pet is actually bitten, you should take your pet to a veterinarian right away. Skunks can carry rabies, and prompt medical attention could be crucial. (“Pets and Skunks: A Smelly Dilemma,” ASPCA Action, Issue #3, 2016, p. 8)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.The post Maximizing Your Child’s SSI by Utilizing ABLE Accounts first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2016/09/what-is-a-third-party-special-needs-trust/ Wed, 28 Sep 2016 19:49:21 +0000 http://www.seonewswire.net/2016/09/what-is-a-third-party-special-needs-trust/ by Thomas D. Begley, Jr., CELA A Third Party Special Needs Trust is usually used in a Medicaid context not for the benefit of the grantor of the trust, but for the beneficiary. The grantor of the trust is typically…

Many public benefits available to persons with disabilities, such as Supplemental Security Income (SSI) and Medicaid, place limits on income and certain types of assets. Exceeding such limits can lead individuals to lose some or all of their benefits. Individuals receiving SSI are limited to $2,000 of assets. For many individuals, their Medicaid is linked to their SSI. Today there are many Medicaid Waiver Programs. In many states the asset limit for these waiver programs is also $2,000, but this varies from program-to-program and from state-to-state. Assets held in ABLE accounts do not affect SSI until the ABLE account reaches $100,000, at which point SSI is suspended. Assets in ABLE accounts do not affect Medicaid eligibility, so long as the assets do not exceed the state limit for 529 Plans. This varies considerably from state-to-state. Most states do not have an asset limit for Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps), but a few states do. Section 8 Housing has not had an asset limit, but effective December of 2016 there will be an asset limit of $100,000 for the household. SSDI and Medicare do not have asset limits. Therefore, individuals receiving benefits that set these kinds of limits must continually monitor their assets and ensure that their “countable” assets never exceed the program limit.

Virtually all public benefit programs have income limits. For example, in SSI any dollar of unearned income reduces the SSI payment dollar-for-dollar. If the unearned income exceeds the maximum SSI benefit, then SSI is lost, and if Medicaid is linked to SSI, Medicaid is lost as well. Frequently, in a personal injury settlement a portion of the settlement is used to purchase a Structured Settlement Annuity. If this Structured Settlement is paid directly to the plaintiff, it will be counted as income and public benefits will be lost. However, if the Structured Settlement Annuity payments are paid directly to the Self-Settled Special Needs Trust, they will not be counted as income. Distributions from the trust to third parties for the benefit of the trust beneficiary are not counted as income. Distributions of cash directly to the beneficiary are counted as income. If the beneficiary or a family member obtains a credit card and sends the bills and receipts to the trustee and the trustee pays the credit card bill, this is not considered income.

In 1993, Congress authorized the use of Self-Settled Special Needs Trusts.1 Under most means-tested public benefit programs, assets in the trust are not counted. If a person with disabilities expects to receive a settlement, an inheritance, or any other monies that would increase his or her countable assets to more than the program limit or will pay income in excess of the amount permitted under the program, it is very important that the person and /or his or her family meet with an attorney who specializes in elder and disability law. The attorney can ensure that proper planning is done to protect the person’s continued eligibility for public benefits.

1 42 U.S. §1396p(d)(4)(A).

The following case studies illustrate the difference proper planning can make to the well-being of a person with a disability.

CASE STUDY 1: A PERSONAL INJURY SETTLEMENT – PUBLIC BENEFITS LOST

John suffered a disabling brain injury as a result of an automobile accident. Initially, he received SSI as well as Medicaid. His medical costs of approximately $7,700 per month were completely covered by Medicaid.

Upon settling his lawsuit, John received $500,000 in net proceeds. He immediately lost his SSI and Medicaid because he had more than $2,000 in countable assets. John began paying for services out of his own pocket at the rate of $7,700 per month, using up his entire $500,000 in 64 months. John then reapplied for SSI and Medicaid. He received SSI immediately, but since there were a limited number of slots for his type of Medicaid waiver, he was put on a waiting list and told that it would likely be two or three years before he received a slot. In the meantime, John’s medical services stopped.

CASE STUDY 2: A PERSONAL INJURY SETTLEMENT – PUBLIC BENEFITS RETAINED

Bill suffered a serious head injury in an automobile accident, which left him disabled and unable to work. He receives SSI and Medicaid. Bill settled his lawsuit for $500,000. Because he wanted to protect his public benefits, he decided to contact an Elder and Disability Law Attorney. At the advice of the attorney, Bill used the first $75,000 of his settlement to buy a handicap-accessible van and to pay off outstanding debts. Bill then took $100,000 as a lump sum to set aside for emergencies and arranged to receive the remaining $375,000 as a structured settlement, which would guarantee him periodic payments over his lifetime. Based on Bill’s life expectancy, which the insurance company considered to be shortened as a result of his injury, the structure gave him $2,000 a month for life with a 20-year guarantee.

Both the lump sum and the structure were paid to the trustee of a Self-Settled Special Needs Trust, which was prepared by Bill’s Elder and Disability Law attorney. As a result, Bill was able to keep his SSI and have Medicaid continue to pay for the extensive therapy he will need for maximum restoration. In addition, the monies in the Special Needs Trust will be used to enrich Bill’s life, providing for a caregiver, travel, and other goods and services he could not otherwise afford.

CASE 3: AN INHERITANCE

Mary is 32 years old and has cerebral palsy. She has been physically disabled since birth, but is mentally competent. Mary receives SSI and Medicaid and has always lived in an apartment with her mother and her sister, Joan. Mary’s mother died unexpectedly, leaving a will that named Joan as its executor. Mary and Joan have no other siblings, and the will leaves the mother’s estate to Mary and Joan equally. As a result, Mary will receive $125,000 from the estate.

Mary and Joan recognized that Mary might have a problem with her public benefits if she received the inheritance outright, so they decided to see an attorney who specializes in elder and disability law. The attorney recommended that Mary place the inherited funds into a Self-Settled Special Needs Trust, so she could benefit from the money while preserving her SSI and Medicaid. The Special Needs attorney filed a petition with the local court to establish the Special Needs Trust with Joan as the trustee, and Mary funded the trust with the inheritance proceeds. Mary notified Social Security and Social Services that she had received an inheritance and had placed the proceeds into a Special Needs Trust. Mary retained her SSI and Medicaid, and Joan, as trustee, distributes funds from the trust for items and services that Medicaid and SSI will not cover, such as Mary’s computer and Internet service, entertainment, education, trips to see her cousins, dental care, and eyeglasses.

If Mary and Joan had not received the assistance of a Special Needs attorney, the outcome would have been very different. Mary would have received her inheritance outright and would have had to notify Social Security. Instead of retaining her SSI and Medicaid benefits, Mary would have had her benefits terminated, and she would not receive them again until her funds were reduced to below $2,000. Mary would have been responsible for covering her extensive medical expenses and other needs until the inherited funds were exhausted. Once Mary was again eligible for SSI and Medicaid, she would have had no funds left for items and services that could enhance the quality of her life.

CASE 4: A STRUCTURED SETTLEMENT

Jose was injured at birth. Jose is receiving SSI and Medicaid linked to SSI. He received $2,000,000 net from a personal injury settlement after paying legal fees, costs and liens. His parents decided to take $1,000,000 in cash and fund a Self-Settled Special Needs Trust, and take the other $1,000,000 and fund a Structured Settlement Annuity that would pay Jose $2,500 per month over his life expectancy. The insurance company made the payments directly to Jose. Because of the monthly payments under the Structured Settlement, Jose lost his SSI and Medicaid. Monies in the Self-Settled Special Needs Trust had to be used to pay for his medical care and the trust was quickly exhausted.

CASE 5: CHILD SUPPORT PAYMENTS

Richard and Barbara have a 19-year-old daughter, Kathy, who has Down Syndrome and who is receiving SSI and Medicaid. Richard and Barbara are in the process of getting a divorce. Kathy will be living with Barbara, and Richard will be paying child support for the rest of Kathy’s life. The divorce decree specifies the amount of the monthly child support payments. When Barbara reports the child support payments to Social Security and Social Services on Kathy’s behalf, she is told that Kathy will lose both SSI and Medicaid because her monthly income is now too high to receive either benefit. Richard and Barbara will now have to pay for Kathy’s expensive medical treatment themselves.

If Richard and Barbara had known that they needed assistance because of Kathy’s disabilities, they could have consulted with an attorney who specializes in Elder and Disability Law. The attorney would have advised Richard and Barbara that the court could establish a Self- Settled Special Needs Trust for Kathy, with Barbara as trustee, and then the court could order Richard to pay the child support payments directly to Barbara as trustee of the trust. Barbara would have reported the existence of the trust to Social Security and Social Services, and she would have presented both agencies with the divorce decree directing the payment of child support to the trust. Kathy’s Medicaid and SSI would have continued, and the child support payments paid to the Special Needs Trust could have been used for Kathy’s needs above and beyond those met by SSI and Medicaid.

CASE 6: STRUCTURED SETTLEMENT PAID TO SPECIAL NEEDS TRUST

Branden was injured at birth. Branden is receiving SSI and Medicaid linked to SSI. He received $2,000,000 net from a personal injury settlement after paying legal fees, costs and liens. His parents decided to take $1,000,000 in cash and fund a Self-Settled Special Needs Trust, and take the other $1,000,000 and fund a Structured Settlement Annuity that would pay Branden $2,500 per month over his life expectancy. The insurance company made the payments directly to Branden’s Self-Settled Special Needs Trust and neither the income nor the assets in the trust were counted for Branden’s public benefits purposes.

WHAT YOU SHOULD KNOW ABOUT SELF-SETTLED SPECIAL NEEDS TRUSTS

When is a Self-Settled Special Needs Trust Required?

A Self-Settled Special Needs Trust is required if a person with disabilities currently receives (or is likely to receive in the future) SSI, Medicaid, SNAP (Food Stamps), Section 8 Housing, certain types of state disability benefits, or benefits under any other means-tested program, and is about to receive a settlement or other monies that will bring the person’s countable assets to more than the asset limit for the particular program, frequently $2,000. There are four alternatives to establishing a Self-Settled Special Needs Trust:

 Accept the Money. The person with disabilities will lose public benefits, but if the amount is large enough or the likelihood of requiring expensive medical treatment is small enough, this could be considered.

 Transfer the Money to Family Members. The transfer of the funds will disqualify the person with disabilities from receiving public benefits for a period of time, depending on the amount of the transfer. If the amount is large enough and the person does not need means-tested public benefits for the period of time for which he or she will be ineligible, this could be considered.

 Spend the Money. If a settlement is small, this option often makes the most sense. Examples of how monies could be spent include repayment of debt or purchase of a home, car, furniture or appliances. A Special Needs attorney should be consulted to design a spend down plan.

 Place the Money in a Pooled Trust. If a settlement is small and spending down the money is not a viable option, it may be more practical to place the litigation proceeds into a Pooled Trust. Pooled trusts are Special Needs Trusts that house the assets of many individuals. They vary with respect to the amount of attention provided to individual beneficiaries.

What Are the Requirements of a Self-Settled Special Needs Trust?

 Assets of the Individual. The trust must be funded with assets owned by the individual, such as litigation proceeds.

 Age. The individual must be under 65 years of age at the time the trust is funded.

 Disability. The individual must be disabled as defined in the Social Security Act.

 Benefit. The trust must be for the benefit of the individual with disabilities.

 Establishment. The trust must be established by a parent, grandparent, guardian or the court.

 Payback. The State Medicaid Agency must be reimbursed upon the death of the person with disabilities.

Additionally, the trust must be irrevocable (i.e. permanent), and it must give the trustee discretionary authority to make distributions.

What Public Benefits are Protected by the Trust?

The purpose of a Special Needs Trust is to preserve public benefits programs for the person with disabilities. Typically, these benefits include:

 SSI. A monthly income program.

 Medicaid. A medical payment program.

 SNAP. This is a program formerly known as Food Stamps.

 Section 8 Housing. A low-income housing program.

 State Disability Programs. These include group homes, vocational training, etc.

What Can the Trust Pay For?

The trust can pay for a very broad range of goods and services as long as payment is made directly to the provider, rather than to the person with disabilities. Examples include personal effects such as furniture, appliances, computers, and automobiles, rent, home improvements, pools, utilities, medical insurance, newspaper subscriptions, the services of a care manager, federal and state taxes, prepaid funeral, and legal fees. Payments for food and shelter are likely to reduce the SSI payment by one-third or one-third plus $20, depending on living arrangements.

Trusts can purchase homes and vehicles. While these assets are non-countable, they are considered special assets. If the trust will be used to purchase these items, there are several options that must be considered in consultation with the Special Needs attorney to ensure that the assets are properly titled.

Generally, funds in the Self-Settled Special Needs Trust can be used only for the benefit of the person with disabilities. Other family members or friends who benefit from the trust are usually required to pay a proportional share for their benefit. For example, if a parent lives with a disabled child in a house covered by funds from the trust, the parent must pay his or her share of expenses. Trust assets usually cannot be used by a parent as a means of meeting his or her legal obligation to support a child.

How Much of the Settlement Should be Structured?

Upon receiving a settlement, persons with disabilities and their families often want to purchase a new home and vehicle and take a dream vacation. They also may wish to pay off a certain amount of debt. A lump sum should be set aside for these items and to prepare for future emergencies. Only after those needs are met should the amount of the structure be determined.

Structured settlements have significant advantages, including:

 Tax Benefits. The income, including the investment income, is tax-free to the trust beneficiary.

 Rated Age. Many plaintiffs have a “rated age.” This means that an insurance company believes that, as a result of injuries, the person with disabilities is much older physically than in actual age and therefore has a shorter life expectancy. In this case, an annuity can be purchased to pay for the lifetime of a much older person, thereby significantly increasing the monthly payment.

 Preservation. The average personal injury settlement, like the average lottery winning, lasts three to five years. By obtaining a structured settlement, a person with disabilities can be guaranteed a monthly income for life with a fixed period guaranteed, even if he or she dies prematurely.

What Features Should be Considered in a Structure?

 Cost of Living. Over time, cost-of-living increases reduce the purchasing power of a dollar. Structures can be designed to include a cost-of-living adjustment (COLA) feature. Generally, insurance companies offer a maximum COLA of 2% per year compounded. The price of the COLA is that the initial payments are sharply reduced. An analysis should be made as to how long it will take for the payment to increase to what would have been available had there been no COLA, and then again from that point how long will it take to make up the revenue lost prior to the “breakpoint.”

 POPs. It is usually possible to anticipate that certain events will occur during the lifetime of a person with disabilities which will require lump sums of money. The structured settlement contract can be designed to take these into consideration. POPs establish that additional lump sums will be paid out at certain stages of the disabled person’s life. For example, if the individual is likely to go to college, a significant lump sum could be paid to cover college tuition when he or she turns 18.

 Commutation Rider. Many states now require that the Structured Settlement have a commutation rider. The payee on death must be the trust or the State Medicaid Agency. State Medicaid Agencies require this so that the Medicaid payback can be achieved.

If a settlement is large, there may be federal and/or state estate tax due after the person with disabilities dies. A commutation rider in the structure ensures that monies will be available to pay these taxes, if necessary.

How is the Trust Established and Funded?

Federal law requires that the trust be established by a parent, grandparent, guardian or the court. The trust cannot be established by the person with disabilities. The trust is funded by having the court order the defendant to pay the lump sum by check directly to the trustee of the Self-Settled Special Needs Trust. If a structured settlement is involved, the court also must order that the monthly payments from the structure be paid by check directly to the trustee of the Self-Settled Special Needs Trust. Payments made to the Personal Injury attorney constitute “constructive receipt.” This means that public benefits agencies will consider the money in the attorney’s trust account to be available to the person with disabilities, thereby disqualifying him or her from those benefits.

How Should the Money be Invested?

Any money placed in the self-settled special needs trust, other than the structure, should be invested in accordance with the Uniform Prudent Investor Act. Because the assets need to last throughout the lifetime of the person with disabilities, they should be invested conservatively, with the objective of preserving principal while providing the growth necessary to outpace inflation and taxes. There should be a written investment policy statement in place that specifies the acceptable level of investment risk to be taken and that outlines the trust’s investment strategy.

How is a Trustee Selected?

Family members often want to serve as trustees of Special Needs Trusts. However, to ensure that the trust will be administered properly and will continue to protect the public benefits of the person with disabilities, a corporate trustee should ALWAYS be utilized.

Since family members rarely have the necessary expertise, a better solution is to select a professional trustee. Family members can remain involved by serving as trust protectors. The trust protector is given the right to remove and replace the trustee, if the performance of the corporate trustee is unsatisfactory.

What Can a Counseling Session Accomplish?

When establishing a Self-Settled Special Needs Trust, it is wise to have a counseling session with the Special Needs attorney, the person with disabilities, the trustee and other interested family members. The person with disabilities and/or his/her family should prepare a budget. The family and the trustee should then agree on which budget items will be paid by the trustee, which items will be paid by the disabled person, and which items, if any, can be purchased through use of a credit card that ultimately will be paid by the trustee.

It also is important to run a “Monte Carlo Simulation.” This is a type of financial calculation that can be used to show how long the trust will last assuming varying conditions, such as different levels of expenses and investment returns. Once it is understood that the trust should last the lifetime of the person with disabilities, and a Monte Carlo Simulation has shown how long the trust is likely to last under various scenarios, the disabled person and /or family may agree to reduce expenditures to a more appropriate level.

Finally, the counseling session is an opportunity for the Special Needs attorney to review with the trustee, the family, and the person with disabilities, the state law requirements pertaining to the administration of a Self- Settled Special Needs Trust. At the end of the session, everyone should understand the rules and a game plan should have been adopted which will enable the person with disabilities to receive maximum benefits from the trust during his or her lifetime.

What Agency Approvals are Required?

 SSA. If the person with disabilities is receiving SSI, the Self-Settled Special Needs Trust should be filed with the Social Security Administration.

 Medicaid. If the person with disabilities is receiving Medicaid, the trust should be filed with the State Medicaid Agency.

 Housing Authority. If the individual is residing in public housing, a copy of the trust should be furnished to the director of the local housing authority.

 Filing. It is very important to file notices and copies of the trust document with the Social Security Administration and /or State Medicaid Agency. The Special Needs attorney is generally responsible for this. It is also important to submit a separate cover letter that shows SSA and the State Medicaid Agency exactly how the trust document complies with their requirements. The agencies seldom respond with specific approval of the trust, but if they do not approve, they will respond with specific reasons.

What Estate Planning Documents Does the Person with Disabilities Need?

If the individual with disabilities is a competent adult and has such non-countable assets as a home, a vehicle, or personal effects, he or she should consider executing a Will. The individual also should execute an Advance Medical Directive/Living Will and a Durable Power of Attorney. Advance Medical Directives/Living Wills are important for anyone wishing to avoid a Terri Schiavo-type situation, in which an individual who has no hope of recovery may be kept alive longer than he or she wishes. A Durable Power of Attorney is extremely helpful in the event that an individual becomes incapacitated and is no longer able to take certain actions on his or her own behalf.

What Estate Planning Documents Do Family Members Need?

If the family members of an individual with disabilities intend to leave money to that individual, or for his or her benefit, they should execute a Will, an Advance Medical Directive/Living Will, a Durable Power of Attorney, and a Third-Party Special Needs Trust (sometimes called a Supplemental Needs Trust). Leaving money directly to a person with disabilities will jeopardize public benefits, while leaving it to a Self-Settled Special Needs Trust will trigger a Medicaid payback requirement. Placing the funds in a Third-Party Special Needs Trust can allow a family to supplement the lifestyle of the person with disabilities without the loss of public benefits. Third- Party Special Needs Trusts operate in much the same way as Self-Settled Special Needs Trusts, except that there is no Medicaid payback, and there are no Medicaid accounting requirements. Families who wish to establish Third-Party Special Needs Trusts should consult with a Special Needs attorney. It is also important that the family’s beneficiary designations be reviewed to ensure that the Third-Party Special Needs Trust is the beneficiary of any funds intended for the individual with disabilities.

Moving to another state is a big undertaking for any family, but it can be particularly complicated when a family member has a disability. The secrets to a successful transition are advance planning and a backup plan in case of problems. Here are a few specifics to keep in mind.

Know what to expect with public benefits

If your family member with a disability is receiving Social Security Disability Insurance (SSDI) benefits, there should be no disruption in payments, as long as you inform the Social Security Administration as early as possible of your change of address. Supplemental Security Income (SSI) benefits should not be disrupted either, but the amount could change. In 2016, the federal maximum SSI benefit for an individual is $733 per month. However, some states add an optional state supplement or make food stamps or other benefits available to SSI beneficiaries, so those benefits may vary by state.

Plan in advance for health care needs

Health care is a primary concern, and in this area much can change when moving to another state. In addition to finding new doctors, therapists and other service providers, you should be prepared for changes in coverage. Private health insurance policies may have different coverage or premiums in another state. If you signed up for health insurance through the Affordable Care Act state exchanges, you can take advantage of a 60-day special enrollment period, but be sure to check the eligibility requirements ahead of time. Medicare benefits should not be affected by an interstate move, but Medicaid will need to be reapproved in the new state, and the services and support available through Medicaid varies from state to state.

Special education and other services

While students with disabilities are guaranteed a free and appropriate public education by the federal Individuals with Disabilities Education Act (IDEA), a special needs student’s Individualized Education Program (IEP) will need to be renegotiated. Other services, such as day care, social programs and in-home services vary greatly from state to state. ABLE Act legislation has not yet been enacted in all 50 states, and special needs trusts should be reviewed by an attorney to ensure that they are up to date and there are no problems created by the move.

Moving to a new state is a big project, but creating a checklist and engaging in advance planning will help you have an organized approach. Even with a detailed plan, it is a good idea to have a backup plan, and an emergency fund, in case of pitfalls along the way.

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.

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by Thomas D. Begley, Jr., CELA

Personal Injury attorneys must inquire as to whether their clients are receiving public benefits. Certain benefits are means-tested, so that if the client receives money directly those benefits are reduced or lost completely. This article will outline the common public benefits and indicate whether the receipt of a personal injury settlement will affect those benefits.

Supplemental Security Income

Supplement Security Income (SSI) is a means-tested federal program that provides income (a cash assistance grant) to certain aged (65 or over), blind, and persons with disabilities. The program is administered by the Social Security Administration. It is governed by federal statute,[1] federal regulations,[2] and the Program Operating Manual System of the Social Security Administration (POMS). For 2016, the maximum federal SSI benefit is $733 per month. In addition, the State of New Jersey has a supplement in the amount of $31.25 per month. If an individual has more than $2,000 of assets, he or she will lose SSI. Therefore, the receipt of a personal injury settlement will disqualify the plaintiff from SSI, unless the funds are placed in a Special Needs Trust. 

Social Security Disability Income

This program is known as Old Age Survivors and Disability Insurance (OASDI). It is governed by the Social Security Act.[3] Unlike SSI, which is a means-tested welfare program, Social Security Disability Income (SSDI) is an insurance program. Coverage is based on quarters of Social Security insurance coverage during the applicant’s employment. Receipt of a personal injury settlement will not affect the plaintiff’s SSDI.

Medicaid

Medicaid is a medical insurance program that benefits millions of Americans. There are many ways that individuals qualify for Medicaid. The vast majority of Medicaid recipients receive that benefit, because they are also receiving SSI. If they lose their SSI, they also lose their Medicaid. However, since the Affordable Care Act (ACA), millions of Americans now receive Medicaid regardless of whether or not they are disabled and regardless of whether they are receiving SSI.

For SSI-based Medicaid, there is an asset limit of $2,000. For ACA Medicaid, there is no resource limit. Therefore, receipt of a personal injury settlement by an SSI recipient will cause a loss of Medicaid. However, receipt of a personal injury settlement by a Medicaid recipient who obtained Medicaid through the ACA will not affect eligibility, except that the income from the settlement may push the income of the plaintiff above the income limits for eligibility under the ACA. The solution for an individual receiving SSI-linked Medicaid is a Special Needs Trust. However, under the ACA, only individuals with disabilities are qualified for a Special Needs Trust. Individuals receiving Medicaid under the ACA who are not disabled may not utilize a Special Needs Trust.

Medicaid Waiver Programs

Medicaid Waiver Programs are designed to provide Medicaid coverage for long-term care services. These services are typically delivered in the home or assisted living facilities. These services are vital to catastrophically-injured individuals. These programs have an asset maximum of $2,000. Receipt of a personal injury settlement would disqualify the plaintiff from Medicaid Waiver services, unless the funds are placed in a Special Needs Trust.

Medicare

Medicare is a program that pays medical costs of eligible beneficiaries. Unlike Medicaid, which is a welfare program, Medicare is an insurance program. Receipt of a personal injury settlement will not affect Medicare eligibility.

Federally Assisted Housing

The federal government has two housing programs that provide assistance for low-income individuals and people with disabilities. These are known as Section 2.02 and Section 8. Section 8 is the program that has the most effect on personal injury plaintiffs. The Department of Housing and Urban Development (HUD) pays rental subsidies so eligible families can afford decent, safe and sanitary housing. Each section of the country has a maximum income limit for eligibility for public housing. If a tenant is eligible, they pay 30% of their net income for rent. While there is no asset test for federally assisted housing, if the assets produce income, the income may render the plaintiff ineligible or cause an increase in monthly rental. Income for the entire household is considered.

Payments from a Special Needs Trust are not counted as income, so long as the payments are irregular and sporadic.

Supplemental Nutritional Assistance Program

The Supplemental Nutritional Assistance Program (SNAP) is now the name for a program that used to be called Food Stamps. Recipients are provided an electronic benefit transfer (EBT) card that looks much like a credit card. SNAP eligibility is determined on the basis of household eligibility.

In New Jersey SNAP has complex resource and income limits. Therefore, receipt of a personal injury settlement could disqualify the individual from these benefits, unless the personal injury proceeds are placed in the Special Needs Trust.

Division of Developmental Disability

Many Division of Developmental Disability (DDD) programs are now based on Medicaid eligibility. The asset limit is $2,000. If the plaintiff is receiving or would otherwise be eligible to receive those benefits, then receipt of a personal injury settlement would disqualify them unless it has been placed into a Special Needs Trust. Other DDD benefits would be unaffected by receipt of a personal injury recovery.

Group Home

In New Jersey most group homes are paid with Medicaid dollars. The asset limit is $2,000. Therefore, receipt of a personal injury settlement would disqualify the individual from those benefits, unless it is placed in a Special Needs Trust.

Psychiatric Institutions

Many psychiatric institutions are paid for by Medicaid dollars under Medicaid Waiver Programs. Again, the asset limit is $2,000, so receipt of a personal injury settlement would disqualify the plaintiff unless the funds are placed in a Special Needs Trust.

[1] 42 U.S.C. §1381 et seq.

[2] 20 C.F.R. §416.

[3] 42 U.S.C. §401 et seq. The Regulations are found at 20 C.F.R. §404.1 et seq.

by Thomas D. Begley, Jr., CELA

It is always difficult to move from one state to another, but when a family member has disabilities there are a number of considerations that should be addressed as early as possible.

• Health Care. Establish a “safety net” well in advance. Research the doctors, therapists and other service providers available in the new location and reach out to local advocacy organizations for referrals. Be sure your medical insurance serves the area to which you are moving. Otherwise, it may be necessary to obtain other medical insurance. Most medical insurance policies have geographic limitations.

• Special Education. If a child is receiving special education, it may be necessary to negotiate a new Individual Education Plan (IEP) and/or a 504 Plan prior to moving in order to avoid an interruption in services. The existing IEP should be forwarded to the new school district as a starting point.

• Guardianship does not automatically transfer from one state to the other. If the new home state has not signed a reciprocity agreement with the state you are leaving, transferring guardianship can be complex. Legal counsel in the state you are leaving and the state to which you are moving should be consulted to coordinate the process.

• SSI/SSDI. Simply supply the Social Security Administration with the new address on a timely basis and there should be no interruption in payments.

• SNAP (Food Stamps). SNAP is a federal program, but each state has variations. Verify the new state’s guidelines.

• Social Service Agencies. Do research and identify local providers of day care, in-home services, social programs, career assistance, and other supports.

• Estate Planning Documents. Review and update, if necessary, Wills, Special Needs Trusts, Living Trusts, Living Wills, and Powers of Attorney. Confirm that beneficiary designations are still correct.

• Motor Vehicle. Apply for a handicap vehicle permit, if required.

Medicare is well-known for providing health insurance for people age 65 and older. However, Medicare can also provide health coverage for younger people with disabilities, so if you have a disability, it is important to know how you may qualify for Medicare. The first step is to apply for disability benefits through the Social Security Administration. To qualify for Social Security disability…

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Medicare is well-known for providing health insurance for people age 65 and older. However, Medicare can also provide health coverage for younger people with disabilities, so if you have a disability, it is important to know how you may qualify for Medicare.

The first step is to apply for disability benefits through the Social Security Administration. To qualify for Social Security disability insurance (SSDI) benefits, you must not be working a substantial amount, you must have paid FICA taxes for a long enough period to qualify, and you must have a severe medical condition that prevents you from working and has lasted or is expected to last at least one year, or result in death. If you have not paid enough into the system with your taxes, then you may still be able to apply for Supplemental Security Income (SSI), if you meet the income and asset limits.

Once you have been entitled to Social Security disability benefits, or Railroad Retirement Board benefits, for 24 months, then you will automatically be enrolled in traditional Medicare (Parts A and B), as opposed to a Medicare Advantage plan (Part C). If you wish to switch to Medicare Advantage, or enroll in Medicare Part D prescription coverage, you may do so during your initial enrollment period, which starts three months before your 25th month of disability and ceases three months after your 25th month of disability. You may also make such changes during the yearly enrollment period, which is from October 15 to December 7 each year.

As noted above, after becoming entitled to SSDI benefits, there is a two-year waiting period to become eligible. However, there are two exceptions. People with amyotrophic lateral sclerosis (ALS) can get Medicare when they are entitled to receive disability benefits. For people with end-stage renal disease with kidney failure who require a kidney transplant or ongoing dialysis, Medicare coverage can start three months after your dialysis starts.

Learn more about our special needs planning and special education advocacy services at www.littmankrooks.com or www.specialneedsnewyork.com.

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by Thomas D. Begley, Jr., CELA

Nothing is likely to have greater impact on public policy and programs for the elderly than the aging of the Baby Boomers (“Boomers”). Boomers represent 76 million persons in the United States born between 1946 and 1964 – 31% of the total population. Boomers are divided into two waves. The first wave was born between 1946 and 1954 and is currently between 61 and 69 years of age. The second wave was born between 1955 and 1964 and is currently between 51 and 60 years of age. By the year 2030, all surviving members of this generation will be between the ages of 66 and 84 and 90% will be retired by the year 2030.[1] By 2020, close to one-third of the population will be over age 55. Despite the conventional wisdom that Boomers are ready to “work forever” and significantly extend their formal working career, many of the oldest Boomers are already well into the retirement phase. Many more expect to retire upon becoming eligible for full Social Security Retirement benefits.

• Forty-five percent of 65-year old Boomers are now fully retired with another 14% reporting that they are retired but working part-time or seasonally.

• Of those who have not yet retired, 61% plan to retire when they reach 68.5 and are eligible for full Social Security Retirement.

• Forty-five percent of Boomers who retired earlier than planned cited health-related reasons for doing so. Sixteen percent cited loss of a job or job opportunities. Those who retired later than they had planned mentioned needing a salary to pay for day-to-day expenses.

• Sixty-three percent of Boomers have started receiving Social Security benefits prior to reaching full retirement age.

• Seventy percent of retirees report liking retirement “a lot.”

• Twenty-five percent of Boomers received an inheritance from their parents with an average value, before taxes, of $110,000.

As Boomers age, it is useful to study a profile of the average Boomer. MetLife performed such a study.[2] The study showed that the average 62-year old in 2007 was married to the same spouse, who was 60-years old, had 2.4 children over the age of 18 who were not living at home, has two grandchildren also not living in their home, and has no living parents. These individuals tend to have very good health, have some college education, and worked full time. They feel they have done a good job earning income, but a poor job saving for their own future, investing for their children’s future, and ensuring coverage for their long-term care costs. They are politically conservative. They have decided to take Social Security benefits earlier than the normal retirement age. A sizeable portion applies for benefits at age 62 and plan to be fully retired by age 66-years 4 months.

Changes in the global economy have caused a decline in the number of manufacturing jobs in the United States and a move toward service jobs, requiring higher level of skill and education. Fifty-six percent of Boomers will rely on Social Security for over one-half of their income and estimates are that Boomers will save only one-third of the amount required to provide them with a secure retirement at age 65.[3] Further, Boomers have high consumer debt, including education loans, and are borrowing, or will soon need to borrow, to finance their own children’s educations. The National Association of Area Agencies on Aging predicts that, “Baby boomers will have better health in their late 60s and 70s due to better personal care, more healthful work environments, and better health practices throughout their adult lives.”

The retirement of Boomers will put a tremendous stress on the Social Security and Medicare systems. Policymakers, particularly those on the right, will be tempted to reduce benefits to maintain the solvency of both the Social Security and Medicare systems. Such a change would cause serious issues for many Boomers who have retired with no pension, little retirement savings through 401ks, little equity in their homes, and high consumer debt. All of these reasons, and particularly a lack of pensions, makes Social Security even more important to Boomers who are retiring.

The General Accounting Office (GAO) found that an annual drawdown of savings at an annual rate of 4%, coupled with a delay in Social Security, was a good strategy for Boomers to employ for retirement. The longer Social Security is delayed, the higher the monthly payment. Therefore, drawing down on savings first will ultimately lead to a higher monthly check from the Social Security Administration.

There is a dramatic difference between the first wave of Boomers and the second wave. The older wave is better educated and is more likely to be married. The most important source of income for Boomers is earnings from employment, and singled boomers generally earn less than married ones. Also, 71% of first-wave Boomers own their own homes, while only 57% of those in the second wave own homes. As a result, poverty rates in 1990 were one-third higher for those in the second wave of Boomers than for those in the first wave. [4]

According to the National Association of Area Agencies on Aging, large numbers will face economic risk and deprivation, because of a history of low earnings, intermittent employment, poor education, discrimination, and an inability to adjust to changing employer requirements. The most influential variables for a Boomer’s retirement are marital status and level of education.[5]

One of the factors making retirement for many Boomers is the lack of income from pensions. Public sector employees generally receive pensions. Private sector employees generally receive benefits from defined contribution plans, such as 401ks, and 401ks tend to be much less generously funded and pay out much smaller benefits.

[1] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[2] Highlights of the MetLife Study of Boomers: Ready to Launch, MetLife Mature Market Institute, www.metlife.com (Nov. 2007).

[3] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[4] Transitioning into Retirement, The MetLife Study of Baby Boomers at 65 (April 2012).

[5] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

by Thomas D. Begley, Jr., CELA

Nothing is likely to have greater impact on public policy and programs for the elderly than the aging of the Baby Boomers (“Boomers”). Boomers represent 76 million persons in the United States born between 1946 and 1964 – 31% of the total population. Boomers are divided into two waves. The first wave was born between 1946 and 1954 and is currently between 61 and 69 years of age. The second wave was born between 1955 and 1964 and is currently between 51 and 60 years of age. By the year 2030, all surviving members of this generation will be between the ages of 66 and 84 and 90% will be retired by the year 2030.[1] By 2020, close to one-third of the population will be over age 55. Despite the conventional wisdom that Boomers are ready to “work forever” and significantly extend their formal working career, many of the oldest Boomers are already well into the retirement phase. Many more expect to retire upon becoming eligible for full Social Security Retirement benefits.

• Forty-five percent of 65-year old Boomers are now fully retired with another 14% reporting that they are retired but working part-time or seasonally.

• Of those who have not yet retired, 61% plan to retire when they reach 68.5 and are eligible for full Social Security Retirement.

• Forty-five percent of Boomers who retired earlier than planned cited health-related reasons for doing so. Sixteen percent cited loss of a job or job opportunities. Those who retired later than they had planned mentioned needing a salary to pay for day-to-day expenses.

• Sixty-three percent of Boomers have started receiving Social Security benefits prior to reaching full retirement age.

• Seventy percent of retirees report liking retirement “a lot.”

• Twenty-five percent of Boomers received an inheritance from their parents with an average value, before taxes, of $110,000.

The General Accounting Office (GAO) found that an annual drawdown of savings at an annual rate of 4%, coupled with a delay in Social Security, was a good strategy for Boomers to employ for retirement. The longer Social Security is delayed, the higher the monthly payment. Therefore, drawing down on savings first will ultimately lead to a higher monthly check from the Social Security Administration.

[1] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

There is no reduction in Social Security benefits for those who continue to work, as long as they have reached full retirement age. For some, Social Security benefits may actually increase, because benefits are calculated using the highest 35 years of earning.

For people born between 1943 and 1955, full retirement age is 66 years old. For those born in 1960 or later, full retirement age is 67 years old.

Taking Social Security benefits before reaching full retirement age and continuing to work can lead to a reduction in benefits. For those under retirement age for a full year, the Social Security Administration deducts $1 in benefits for every $2 earned above the annual limit of $15,720. For the year in which the individual reaches full retirement age, $1 is deducted for every $3 earned above an income limit of $41,880 in the months before the individual reaches full retirement age.

Learn more about our services by visiting www.littmankrooks.com.

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This blog is going to focus on disabled and noncustodial parents and what sort of impact social security benefits will have on child support obligations. When someone is suffering from a disability, he or she receives social security disability benefits, and if that person is a parent, there is often another derivative benefit paid for any minor children that they have.

Did you know? Over 2 billion dollars each month are distributed as derivative minor benefit to disabled parents with minor children who number around 4 million.

The Case Of Disabled Parent Who Isn’t The Custodial Parents And Is Obliged To Pay Child Support

Social security benefits are considered as income for child support and thus the disabled parent may have an obligation to pay the child support to the other parent who has custody. The less time the disabled parent has with the child, the more the amount of child support. Such an amount can create a financial difficulty for the parent.

There is good news though, derivative social security benefits can sometimes be paid by the Social Security Administration to the custodial parent directly. This does have a proper process that the disabled parent has to follow. To get this solution, the disabled parent has to notify the custodial parent that he or she receives social security benefits. Then the custodial parent will apply for the derivative social security benefits directly through the Social Security department.

What happens through this is that the amount for Social Security benefits is then credited towards the child support to some extent relieving the disabled parent of that financial burden.

The Case Of A Disabled Parent When The Custodial Parent Refuses To Apply For Derivative Social Security Benefit

It seems unimaginable how someone can refuse to receive something that they are entitled to and yet there are several cases where this is commonly seen. Whether it is because of California divorce or some prevailing bitterness between the parents, sometimes parents with high emotions can see the derivative socials security benefit as an advantage to the non custodial parent and thus refuse to do anything that helps the other.

Orange County family law has anticipated such a problem and has given us a solution to it.  Family Code 4504(a) states that the custodial parent must contact the Social Security administration within 30 days of receiving a notification from the non-custodial parent. The act is meant to reduce illogical fights and excuses of non-cooperation from the custodial parent.

Gerald A. Maggio is an experienced Orange County divorce and family law attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

If the marriage did not last 10 years, then no, the Social Security Administration will not pay benefits to one spouse on the record of another.  If this is an issue, mediation can help spouses find and draw up alternative spousal support agreements that work for both parties.

Divorcing couples nearing or at retirement age should proceed carefully.  There are some rules about when divorced spouses can apply for benefits based on the record of a higher-earning spouse.  In addition, there are some complications if one spouse would like to retire early.

For more information on the issue of divorce and Social Security benefits, go to http://www.ssa.gov/retire2/divspouse.htm.

Gerald A. Maggio is an experienced Orange County divorce and family law lawyer and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

First, if you are receiving Social Security benefits already, then you will be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance) automatically. You should receive information about enrollment three months prior to your 65th birthday. You will become eligible beginning the first day of the month you turn 65. If you turn 65 on the first day of the month, then you will be enrolled beginning on the first day of the prior month.

Most people not already receiving Social Security benefits will have to enroll in Medicare through the Social Security Administration. You can enroll anytime during a seven-month period that starts three months prior to your 65th birthday. You also have the option of choosing a Medicare Advantage (Part C) private insurance plan as an alternative to Part A and Part B. If you choose a Medicare Advantage plan, it may include prescription drug coverage; otherwise, you will have to join a Medicare Prescription Drug Plan (Part D).

Finally, be sure to consider the timing and interaction of any health insurance you receive through your employer. If you are retiring at age 65 and moving into Medicare, be sure to coordinate the dates of your coverage. If you will keep working past age 65, then you will need to understand how your employer’s group health plan interacts with Medicare; it may still be necessary for you to enroll in Medicare.

The attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

When a family hires an individual to perform duties in or around their home, they are considered a household employer. The IRS views the worker — whether a nanny, senior caregiver, health aide, etc. — as an employee of the family for whom she works. For most families, having household payroll and tax responsibilities is akin to learning a new language and most have no clue where to go for guidance. So to help simply this process, here are five quick tips you need to know about household employment before your hire.

#1: Tax responsibilities kick in at $1,900

If a household employee is paid $1,900 or more in a calendar year, the employer is required to withhold and remit payroll taxes to the state and the IRS. If the employer pays less than $1,900, they are still legally obligated to adhere to federal and state labor laws even though no employment tax filings are required.

#2: Household employers must withhold taxes from their employee’s paycheck each pay period

Specifically, 6.2% of gross wages should be deducted for Social Security taxes and 1.45% for Medicare taxes. By law, these taxes (collectively known as “FICA”) must be withheld from the employee’s pay – or else the employer is responsible for them. The employee’s federal and state income taxes are NOT required by law to be withheld, but it is a good idea for the employer to do so. Otherwise, the employee may have a large tax bill due at the end of the year and may be subject to underpayment penalties.

#3: Household employers are required to pay federal and state employer taxes

Just like the employee’s withholdings, employers must pay a 6.2% Social Security tax and a 1.45% Medicare tax on top of the gross wage they pay their employee. It’s sometimes called the “employer match” of the FICA taxes. Additionally, household employers are responsible for paying federal and state unemployment taxes. These taxes must be reported and remitted along with the withheld employee taxes throughout the year.

#4: Additional paperwork is required at year-end

By the end of January, household employers should provide a Form W-2 to their employee. They should also file Form W-2 Copy A and Form W-3 with the Social Security Administration and attach Schedule H to their federal income tax return.

#5: Employers must meet federal and state labor law requirements

Household employees are classified as non-exempt workers. As such, they must be paid at least minimum wage for every hour they work and be paid overtime for all hours over 40 in a 7-day workweek. The rate for overtime pay must be at least 1.5 times the regular rate of pay. (Note: Live-in employees in New York must be paid overtime once they reach 44 hours in a week). In addition, most families in New York are required to carry a Workers’ Compensation and Disability insurance policy (policies can be procured through the New York State Insurance Fund). Following the Domestic Worker Bill of Rights in New York passage in 2010, household employees are entitled to 3 days of paid vacation and 2 days of paid sick leave after one year of service.  Finally, employers in New York must provide a written wage notice (or employment agreement) each year by February 1 as well as detailed paystubs illustrating hours worked, total wages and all tax withholdings.

If you have any questions, please consult IRS Publication 926 or feel free to call us at 1-888-273-3356.

Kristina Derro, Esq.

Veterans Disability Lawyer

The government has launched a new process to expedite Social Security disability claims for a special category of veterans, the Social Security Administration announced Tuesday, March 18.

Under the new process, Social Security claims from veterans with a Veterans Affairs Department disability compensation rating of 100 percent Permanent and Total will be treated as high priority, and qualifying veterans will receive expedited decisions.

However, the VA rating does not guarantee an approval for Social Security benefits; it only ensures the process will be expedited for those veterans. The veterans still must meet the strict eligibility requirements for a disability allowance.

Carolyn Colvin, acting Social Security commissioner, said the new process is similar to the way the agency currently handles disability claims from wounded warriors.

“We have reached another milestone for those who have sacrificed so much for our country and this process ensures they will get the benefits they need quickly,” Colvin said in a news release. “While we can never fully repay them for their sacrifices, we can be sure we provide them with the quality of service that they deserve. This initiative is truly a lifeline for those who need it most.”

To receive the expedited service, veterans must tell Social Security they have a VA disability compensation rating of 100 percent Permanent and Total and must show proof of their disability rating with their VA notification letter.

Congressman John Sarbanes (D-Md.), who introduced legislation in Congress to promote the initiative, praised the change.

“No one wants to put America’s veterans through a bureaucratic runaround,” he said in the release. “As the baby boomer generation ages and more veterans of the wars inIraqandAfghanistanneed care, this common sense change will help reduce backlogs and cut through unnecessary red tape so that our most disabled veterans receive the benefits they’ve earned.”

To read further on this issue, check out the Stars & Stripes article: http://www.stripes.com/news/some-veterans-will-now-have-their-social-security-disability-benefits-expedited-1.273397

Occupations: When considering an applicant for SSDI, the agency must evaluate the applicant’s employment prospects. Currently, it tasks vocational experts to match the applicant with potential occupations. But these experts are supposed to use a “dictionary” of occupations that has not been updated since 1991. It still includes anachronistic occupations like “blacksmith,” and, more importantly, it does not reflect the technology boom of the past twenty years. Numerous jobs working with computers are well-suited to physically disabled individuals. Rewriting the dictionary is a huge job that may not be completed until 2016 at the earliest.

Grid Use: Administrative law judges who rule on SSDI applications use a decision-making tool known as the “grid” to help them decide whether an applicant qualifies for benefits. It accounts for age, education, disability and other factors. But like the occupation dictionary, the grid has not been updated in years, and it does not reflect the ability of some people to work productively into advanced ages. Additionally, some judges believe it is too easy for lawyers and other experts to tailor applications to the grid so that an award of benefits is more likely.

Disclosure: Currently, SSDI attorneys may withhold medical records that weaken a client’s case for disability benefits from submissions. Many believe that this practice should not be allowed, and some claim the SSA has backed down from pressure against implementing a rule against it in the past. An agency official recently stated the SSA would soon propose a rule preventing the withholding of relevant information from applications, but the official would not elaborate on the nature of the proposal.

Caseload: To deal with large case backlogs, some judges have, in recent years, handled upwards of 1,000 cases per year. Many judges claim due diligence on so many cases is impossible. The agency has now placed a cap of approximately 800 cases per year for each judge.

Third-Party Groups: The SSA and its inspector general are investigating whether doctors and lawyers are facilitating fraud in disability applications. This investigation only began recently, and no targets or findings have yet been identified.

Judges’ Job Description: It is very difficult for SSA judges to be removed from their positions. For some, the post amounts to a lifetime appointment. But the agency is changing the job description to clarify that judges are subject to supervision and to oversight from various parties. The SSA has also intensified scrutiny over the judges’ casework and can recommend additional training for those whose results (e.g. the percentage of applications approved) fall outside the norm.

As the SSDI continues to grow, it is important to keep the program modern and to remain vigilant against fraud so that the benefits of future, worthy applicants are not endangered.

Alston & Baker, an Affiliation of Professional Associations: The Law Office of Robert C. Alston, Esq., P.A. and The Law Office of Marcie L. Baker, Esq., P.A. To contact a social security attorney call 1.888.500.5245 or visit http://www.alstonbakerlaw.com.

Social Security Disability Insurance (SSDI) is another story altogether. That program draws from a separate trust fund – one that is forecast to be depleted in 2016. If that happened, benefits could only be paid to the extent they were covered by incoming payroll tax revenue. That would mean an immediate benefit cut of some 20 percent to each and every disabled beneficiary.

One temporary solution is actually quite simple. A small portion of revenues from payroll taxes could be reallocated from the retirement program to disability. Reallocations are nothing new – Congress has enacted them at least six times already, most recently in 1994. According to Social Security Administration chief actuary Stephen Goss, shifting just one tenth of 1 percent of revenues would bring the forecast depletion date of both trust funds in line with each other.

To be clear, this would accelerate the depletion of the retirement program’s trust fund, and thus it is not necessarily a politically simple fix despite being logistically simple. But the reallocation itself would not result in any workers having to pay more in taxes, nor any beneficiaries – retired or disabled – suffering a cut in benefits. This should spare the measure from significant controversy, as past reallocations have been.

The SSDI program has recently faced intense scrutiny and criticism because of its rapidly swelling roll of beneficiaries. There is a sense among some that fraud is rampant in the program and that unemployed baby boomers who do not yet qualify for retirement benefits are freeloading despite being physically capable of work. This makes disabled Americans pawns in games of political brinksmanship as Congress argues over fiscal policies and debt ceilings.

The reality is that while examples of fraud may be found in the SSDI program, its growth was predicted by simple demographics. Baby boomers are nearing retirement age. The rate of physical disability among those age 40 is half that of 50-year-olds, which itself is half that of 60-year-olds. Moreover, women’s increased participation in the labor force over the last several decades means they are increasingly eligible for disability benefits.

Millions of Americans depend on disability benefits to make ends meet, and many more depend on retirement benefits for the same. Reforming both these programs in order to make them solvent long into the future may be a lengthy political process. In the meantime, reallocating funds to SSDI is the right thing to do to protect the livelihood of those who depend on it.

Alston & Baker, an Affiliation of Professional Associations: The Law Office of Robert C. Alston, Esq., P.A. and The Law Office of Marcie L. Baker, Esq., P.A. To contact a social security attorney call 1.888.500.5245 or visit http://www.alstonbakerlaw.com.

One type of scam takes advantage of the public’s confusion over changes in health insurance. Someone perpetrating this type of fraud may call a senior and say that new Medicare cards are being issued and they just need to verify some personal information. A similar trick is for callers to say they are IRS agents. The goal is to obtain personal details such as Social Security numbers, which can be used to set up credit cards or loans in victims’ names, or claim their income tax refunds.

Seniors may be targeted in part because they are more likely to answer the phone, because they may have retirement savings or because they are perceived as more trusting. However, scammers will defraud anyone they can. The federal government reported that almost 83,000 complaints of this type of imposter scam were received in 2012, an increase of 12 percent from 2011.

Other criminals target electronic Social Security benefits payments. More than $28 million in benefits was stolen from October 2011 to June 2013. The thieves begin by obtaining a victim’s personal information, such as Social Security number and bank account information, which is often done through the same type of fraudulent telephone call, with the scammers posing as government officials. The fraudsters then contact the Social Security Administration or the victim’s bank pretending to be the victim and have the electronic benefits payments transferred to an account that they control.

The U.S. Senate Special Committee on Aging recently convened a panel of advocates and victims to learn what action can be taken to prevent this type of crime. Once the benefits have been stolen, getting them repaid can be difficult if not impossible.

On an individual level, seniors and others should take care to avoid being taken advantage of. First of all, never give out personal information such as a Social Security number to an unsolicited caller over the phone. Official communication from government agencies is by letter delivered by the U.S. Postal Service. Never wire money to an unknown person or agree to accept debit or credit cards in another person’s name. If you receive a call from a person pretending to be a Social Security official, call the Social Security Fraud Hotline at 1-800-269-0271.

The Hale Law Firm believe the right solution to your estate planning, elder law, or probate needs can be identified in a free initial consultation with one of our attorneys and counselors at law. To learn more or to contact a Dallas estate planning attorney, visit http://www.thehalelawfirm.com/ or call 972.351.0000

Victims of identity theft can spend years repairing damage done to their finances and credit by predatory criminals. But increasingly, these criminals are turning to an even more troubling tactic: using the identities of the recently deceased.

According to a study by ID Analytics, a consumer risk management company, the identities of as many as 2.5 million deceased Americans are stolen each year. Because government agencies can take up to six months to register death records, thieves have plenty of time to rack up charges. They first look through obituaries to find the victims’ names and birth dates. Using that, they are able to find their targets’ Social Security numbers through the “Death Master File,” a list of deceased Americans maintained by the Social Security Administration.

Fortunately, proper estate planning can help prevent identity theft after death. Keep information on all of your financial and credit accounts with your estate plan. Grant a financial power of attorney to your estate planning attorney or another person you trust so that they can monitor your information. And make sure loved ones know to notify the proper government authorities promptly of your death, and do the same for them.

With a comprehensive estate plan, including organized records with your wishes clearly expressed in writing, your loved ones will have the information and authority they need to protect your legacy and themselves from the hardships of identity theft.

Recipients of Social Security benefits are at risk from scammers who attempt to redirect electronic payments to accounts they control. An estimated $28 million was stolen this way between October 2011 and June 2013.

The thieves proceed by obtaining a recipient’s Social Security number and other personal information, sometimes by posing as a telemarketer or a representative of the Social Security Administration. With a Social Security number and bank account information, the scammer can contact Social Security or the bank pretending to be the recipient and redirect payments to another bank account. Some thieves have also hacked into online Social Security accounts and changed the bank account for direct deposits.

The U.S. Senate Committee on Aging recently convened a panel of victims and advocates to address the problem and seek solutions. One woman testified that three months of Social Security electronic benefits were stolen from her and redirected to another bank account. She spent 50 days appealing to her bank, government officials and Senator Bill Nelson, the committee chair, before having her benefits reinstated. Another woman had six months of Social Security disability benefits stolen from a debit card. When the Direct Express debit card company would not reimburse her, she could not pay her rent and was evicted.

To prevent theft of Social Security electronic benefits, remember to never give personal information such as your Social Security number or bank account information to any unknown person. Suspicious activity may be reported to the Social Security Fraud Hotline at 1-800-269-0271 or http://oig.ssa.gov/report-fraud-waste-or-abuse.

For more information, visit www.littmankrooks.com.

By:   Sheryl R. Frishman, Esq.

Many parents of adult disabled children do not realize that their children may be entitled to Social Security Disability Insurance Benefits (SSDI) and Medicare.

SSDI and Medicare adult disabled child benefits are designed to provide financial and Medical support to disabled children, over the age of 18, of parents who have paid into the Social Security program. The eligibility rules for these benefits are extremely complex.

Basically, an applicant needs to be able to prove the following:

• He or she is unable to earn a substantial income through work as a result of a qualifying physical, mental or emotional condition that he or she has had since before the age of 22; and

• At least one of his or her parents has worked enough quarters to qualify for Social Security benefits and has since died, retired or become disabled from working.

A disabled adult child may be entitled to SSDI and Medicare in addition to SSI and Medicaid.  Additionally, the adult with a disability, in some circumstances may be eligible to work and remain eligible for SSDI and Medicare benefits.  Further, the Social Security Administration has numerous work incentives, allowing the adult child to work and still receive benefits.

The Social Security Administration puts out a guide for “Benefits for Children with Disabilities” which can be found at http://www.ssa.gov/pubs/10026.pdf.

If you or your spouse are retired or disabled and receiving Social Security benefits and have a disabled adult child who has been denied the SSDI benefits, the experienced attorneys at Littman Krooks, LLP can assist you in filing an appeal, so that your child can obtain the benefits they are entitled to. Our firm represents adult children with disabilities in SSDI appeals on a contingent fee basis, which means that there is no out of pocket legal costs for filing the appeal.

For more information, visit www.specialneedsnewyork.com.