Personal Injury and Social Security Disability Blog

Disability Politics in the UK

The older I get, the more I realize that people and their problems are much the same around the world. I have employees and friends who were born in foreign countries or whose parents were born elsewhere and immigrated here. Listening to their stories I appreciate the United States more, but I have come to know that aside from politics, people are not that different from country to country. Unfortunately, that means we all have the same kinds of problems, including disability. In the United States one way we deal with disability is through the Social Security system. My English friend Mr. Jim Loxley of My Compensation explains in this guest post a little about how disability is handled in the United Kingdom. And sure enough, both countries have the same types of problems. I especially like the last sentence of Jim's article.

Working in the legal sector representing disabled people (often in the arena of discrimination, in my case) it can be quite motivating seeing justice being done. Much like Bob Kraft, however, I often find myself frustrated with the government's poor implementation of measures to the legal systems surrounding disabled people. It’s difficult not to ask the question: why is it like this? This is a recent story on an example of the kind of things that happen in the UK that I thought highlighted the issue and was something of an echo of the US Social Security disability fund depletion.

The government has recently suggested a considerable delay to the publication of the new Disability Strategy. The on-going consultations on the disability strategy came to an end in early March with promises having been made that the Springtime would see the government publish the results. However, with a progress report on a wider Equality Strategy being published earlier on this week, the announcement was made that the Disability Strategy would now be brought to the public eye “later this year”. In December of last year a government document was published called Fulfilling Potential and provided a number of clues on which direction the government would be taking the Disability Strategy. In this document, the government asked disabled people to make suggestions on practical ways of making a real difference to their lives. Input from disabled people seems like a good move.

The Fulfilling Potential document outlined three key areas. An increase to individual control and choice, ensuring appropriate support, and making efforts to change attitudes and behavior toward disabled people. However, Maria Miller who is the Conservative’s Minister for disabled people, made the warning at the document’s introduction, saying that there was a challenging economic climate so we have to think about what priorities should be. It has been reported that over 5,000 individuals attended a number of events during the Disability Strategy consultation or submitted feedback via writing.

Miller has faced considerable disappointment from disabled people over the government cuts and reforms to disability benefits and services in addition to its approach to the equality agenda. At this stage the Office for Disability Issues, which looks after the Disability Strategy, has refused to comment.

With the recent issues in the solvency of the US Social Security disability security fund and Medicare, it seems that things are being somewhat mirrored in the UK. It often seems to me that political issues surrounding the disabled or injured are sidelined or deemed less important. Frankly though, I’m of the opinion that the rest of us should be waiting. If someone in a wheelchair was approaching a door that needed opening, most people with common decency would respectfully oblige; and I can’t help but feel this is a fact which the political arena should reflect.

Mixed Opinions on Social Security Disability Insolvency

This guest post is by Mr. Gene Maryushenko at Fisher & Talwar

Several new headlines, including an earlier post right here by Mr. Jim Loxley  have pointed to the gnawing fact that SSDI trust fund is expected to run out within the next 4 years – unless something is done about it. Today, the congressional blog “The Hill” featured a post about how misinformation has led to increasing attacks on the disability program. Former Democratic representative Charlie Melancon has expressed an opinion stating that the old “cut waste, fraud and abuse” rhetoric has become quite dangerous in the context of SSDI.

With budgeting shortfalls, the federal government has been desperate to trim “waste and abuse,” perhaps arguably ignoring the issue of Social Security Disability Entitlement fund running out.  There is no argument that the unemployment rate is closely associated with increasing Social Security disability claims. A White House report (Figure 5) shows suggestive evidence that those nearing the end of unemployment benefits collection are much more likely to apply for SSDI benefits. Well, it doesn’t take a genius to figure out that people are desperate to survive in our current economy despite the legitimacy of their disability claims. However, Melancon argues the claims that qualification is easy and points to the heightened screening measures taken on by the agency since the early 80’s. The “budget hawks” – as Melancon puts it, are eager to cut some of the most important programs such as SSDI with claims that it is festered with abuse and waste.

Every Good Cause is Worth Some Inefficiency

Those eager to cut the program point to inefficiencies of over 1.4 million backlogged benefits reviews – resulting in many continuously collecting disability benefits despite recovery from injuries.  Some are also quick to point out that the program unfairly prevents homeless who actually qualify for benefits from receiving them, because many don’t have access to a doctor – the only authorized individuals to access a medical claim. Most agree that the process for evaluating a claim is very difficult because there is a considerable difference on an individual basis in what constitutes a disability.

According to the RAND Center for Disability Research, many applicants come from a background of extremely low-paying jobs and seek the agency’s aid in medical coverage through Medicare (available after a two-year waiting period). The easy access to Medicare by qualifying disability beneficiaries has put a strain on an already costly program and last year amounted to nearly $212 billion dollars in spending combined.

Either way anyone argues it, once the funds run out the Social Security program is going to take a 21% cut in benefits, affecting nearly 11 million people, many of whom have legitimate claims and are very concerned.

In my opinion, the federal government is going to patch up the problem as it always has with the tax dollars of working Americans, in hopes of creating a more comprehensive plan later. Whether this quick fix will allow for enough time to fix the larger issue at hand is questionable. Perhaps the federal government will take a closer look at its discretionary spending for a more permanent solution.

What do you think?  How should the government go about solving this problem?

 

Social Security Disability Trust Fund May Be Depleted In Four Years

This guest post is courtesy of Mr. Jim Loxley of My Compensation.

It was recently reported that the Social Security and Medicare programs will run out of funds at an earlier date than previously predicted. An annual report written by trustees of the two funds stated that the shorter timelines point towards the urgency of reforms being required to maintain the solvency of the programs. The Social Security trust fund for disability benefits was expected to last up until 2018. However, it is now projected that funds will run out two years sooner in 2016. Furthermore, the portion of the Social Security funding designated to retirees will be exhausted in 2033, which is three years sooner than the previously projected 2036. The dates predicted for the bankruptcy of Medicare is still predicted at 2024, the same as the previous year's report. The report has stated that there are four primary factors which are driving the insolvencies of the programs.

The first, and perhaps the most obvious, is the economic downturn resulting in a loss of revenue for the country and less taxes being generated through the payroll. So called ‘baby boomer’ retirements are on the increase, meaning that there are more individuals receiving benefits from the two programs. Thirdly, as health and medical care improves, people are living longer, resulting in them receiving benefits for a longer period of time. And finally, with regards to Medicare specifically, the costs for the healthcare industry in general are rising faster than the rate of inflation.

The trustees are appointed by the President and are both from political parties. The report urgently encouraged Congress to instigate changes to the programs, stating that delays in doing so will damage those that rely on them the most. The report went on to say that the people making the laws should not delay the addressing of long-term financial challenges which face Social Security and Medicare. Taking early action will maximum the number of options available to the programs in the future, whilst allowing sufficient time for changes to be phased in and for the public to prepare for those changes. In addition, quick action will help minimise adverse effects impacting vulnerable populations such as lower income workers already benefiting from the programs.

A separate report written by Medicare's chief actuary, Rick Foster, was quick to defend the program stating that the report written by the trustees was based on a set of assumptions which he described as “unrealistic”. Under the Affordable Care Act (2010), which is being called “Obamacare” by some, there are cuts in payments to doctors which are set to go into effect soon. Foster believes that Congress will be forced to rescind the cuts. He stated that the Affordable Care Act does make important changes to Medicare, substantially improving its financial outlook, but there's a strong likelihood that certain changes will not be viable over the long term. Further concerns over the Affordable Care Act were voiced by Charles Blahous who is one of the Republicans trustees. He warned that the act was intended to reduce the cost of healthcare and ensure lower deficits, but instead a further $342-$530 billion will be added to the national debt over the next decade.

With these opinions and reports coming to light, the reform of Medicare and Medicaid has been centralised as an issue in the 2012 election. It should come as no surprise that the Democrats are accusing the Republicans of attempting to end the programs, while the Republicans are accusing the Democrats of not taking enough action to save them. The Concord Coalition is a think tank tasked with scrutinising such matters and executive director Robert Bixby has also stated concerns surrounding fiscal stability in the federal budgets. He stated that mutual sacrifice would need to be made if we are to see the desperately needed reforms. He stated that in an ideal world, responsible changes in the entitlement programs should be implemented as a part of a comprehensive program of fiscal reform, seeing cuts in other domestic programs, reductions in the defence budget and also sweeping changes in the tax system. As Bixby said, using a more philosophical angle in a recent press release, "everyone may think that their cow is sacred but, in fact, there can be no sacred cows in the search for solutions."

SSA Extends Spanish Language Online Services

The Social Security Administration (SSA) has announced improvements to its Spanish-language Web site, www.SeguroSocial.gov, with expanded online services available in Spanish. The Web site now includes the ability to apply online for retirement benefits and for Medicare. Those who already receive Medicare also can apply for “Extra Help” for the Medicare prescription drug program. An individual cannot yet file an online application in Spanish for disability benefits but SSA is exploring that avenue and other services for the Spanish-speaking population.

Featured Link — The Social Security Laws

Have you ever wanted to read the actual Social Security laws? No, I didn't think so. That's what lawyers are for, right? But just in case you ever have a need for some late-night reading material, here is the Table of Contents for the whole Social Security Act. Have fun!

Not Your Grandfather's Social Security Office?

The wonderful columnist Tom Margenau, a longtime veteran of the Social Security Administration, responded recently to a question about an e-mail that has been circulating on the Internet. The gist of the e-mail is that illegal immigrants are filing for Social Security disability and thereby draining resources from the system. Of course this is not true. Here are excerpts from the article by Mr. Margenau:

Q: I would like you to comment on the attached email. In it, you'll see a photo that shows a waiting room in a typical Social Security office. I've seen similar scenes in my own local office. No wonder Social Security is in trouble if these kinds of people are ripping off the system!

A: Who are "these kinds of people"? To answer the question, let me describe the photo for the rest of my readers. Labeled "Our tax dollars at work: Social Security office waiting room — Austin, Texas," the image shows a room full of chairs. Sitting in those chairs is a collection of mostly young to middle-aged people. Almost everyone in the picture is African-American or Hispanic. Above the picture is this question: "Do you see any gray or white haired retired folks?"

And this bit of vitriolic text accompanies the picture:

My friend went to his Social Security office to get a Medicare card. He took a picture of the waiting room. Please tell me if you can find a retired person in the place!!!! It's called "disability" insurance!!!! You no longer have to wonder why Social Security is broke!!! These people do not pay into the system, nor are they disabled!!! Please spread this picture to everyone you know. Our country is going broke on this fraud!!! Please also go down to your Social Security office and take a picture and post it on the Internet. It just might wake up the country as to what is going on!!!

Gosh. Where and how do I begin to deal with this pile of Internet excrement? There's so much I could point out that is absolutely idiotic.

Let's start with one obvious point: I hope you realize how racist and xenophobic it is. The uninformed fool who posted this picture and text on the web never came out and said it, but instead of wondering where the gray-haired people were, he might as well have asked, "Do you see any white folks?"

And how about this whopper: "These people do not pay into the system, nor are they disabled!" How in the world can you tell all of that from looking at the picture? How can you tell that they haven't worked and paid Social Security taxes? I guess it's because they are "those people" — black and Hispanic. What other reason would the email sender have for saying that?

And how do we know they aren't disabled? What do disabled people look like? Do they have to be wrapped head-to-toe in a body cast? Should they be lying on a hospital gurney? Or, once again, I have to wonder if maybe — just maybe — the email sender thinks they have to be white (and possibly using canes)!

And then there's the implication that people get disability benefits without paying into the system.

That's simply not true. To qualify for Social Security disability benefits, you must work and pay Social Security taxes, usually for a minimum of 10 years. Also, people who really know how the system works understand that it's very difficult to qualify for Social Security disability benefits. In other words, you must be severely disabled before you receive monthly Social Security disability payments.

As I point out so often in this column, the Social Security Administration does manage a federal welfare program called Supplemental Security Income, or SSI. SSI is not a Social Security benefit and is not paid for out of Social Security taxes. To qualify for SSI, you must be over 65 or severely disabled, and you must be poor. So I guess there's a chance that some of the folks in the picture are there to file for SSI benefits.

But I can tell you that most of the young and middle-aged people you see sitting in that waiting room in the picture are not there to file for Social Security or SSI disability benefits. They are there to replace a lost or missing Social Security card. How do I know? Because internal SSA studies show that about 80 percent of the people who come into a Social Security office are there to do just that. That's the primary reason why you don't see any "white-haired folks" in a Social Security waiting room.

So where are the old folks who need to do business with Social Security? They are sitting at home on the phone or at their computer. Most people who file for Social Security retirement benefits do so either online or by making an appointment for a phone interview. They rarely, if ever, have a need to visit a Social Security office.

Shame on the people who are spreading this vicious email!

Social Security Field Offices to Begin Closing a Half Hour Early

Federal budget cuts are causing the Social Security Administration to reduce the hours field offices are open to the public. Here is the official press release from the Social Security Administration:

Effective August 15, 2011, Social Security field offices nationwide will close to the public 30 minutes early each day.  For example, a field office that is usually open to the public Monday through Friday from 9 a.m. to 4 p.m. will close daily at 3:30 p.m.

“While agency employees will continue to work their regular hours, this shorter public window will allow us to complete face-to-face service with the visiting public without incurring the cost of overtime for our employees,” said Michael J. Astrue, Commissioner of Social Security.  “Congress provided our agency with nearly $1 billion less than the President requested for our budget this fiscal year, which makes it impossible for us to provide the amount of overtime needed to handle service to the public as we have in the past.”

Most Social Security services do not require a visit to an office.  For example, anyone wishing to apply for benefits, sign up for direct deposit, replace a Medicare card, obtain a proof of income letter or inform us of a change of address or telephone number may do so at www.socialsecurity.gov or by dialing our toll-free number: 1-800-772-1213 (TTY 1-800-325-0778).

Social Security Says Goodbye to Paper Checks

You may have heard that the Social Security Administration is switching from paper checks to direct deposits for all people who receive benefits from the agency. New beneficiaries had to switch as of May 1, 2011. Those currently receiving benefits have until March 1, 2013, to make the change.

The Social Security Administration has a page on their Web site dedicated to questions and answers about the electronic system. You can read all about it here. These are the first few questions and answers:

What is direct deposit?

Direct deposit delivers your Social Security or Supplemental Security Income (SSI) benefit into your bank, savings and loan or credit union's account quickly and safely. The U.S. Treasury sends an electronic message to your bank, savings and loan or credit union crediting your account with the exact amount of your Social Security or SSI benefit. You can withdraw money, put some in savings or pay bills-the things you do with your money now. The difference is, your check isn't printed or mailed.

Do I have to receive my benefits electronically?

Yes. Effective May 1, 2011, applicants filing for Social Security and Supplemental Security Income (SSI) benefit payments must choose either direct deposit or the Direct Express® debit card. Currently entitled beneficiaries and recipients receiving payment by check will have until March 1, 2013 to switch to direct deposit or the Direct Express® debit card. As of March 2011, 85 percent of all Social Security and SSI beneficiaries received their benefits by direct deposit. For more information, please visit the Department of the Treasury’s Go Direct® website http://www.godirect.org

I'm interested in receiving my benefits electronically. What should I do?

Here are three options:

If you have an account, go to your bank, savings and loan or credit union. They can answer your questions about direct deposit. If you don't have an account, consider opening one and sign up for direct deposit at that time. Most banks, savings and loans and credit unions offer a variety of accounts, some with little or no fees. Look for one that meets your needs.

You can enroll in the Direct Express® Debit Card. It is a great alternative you can use to access your benefits. And you don’t need a bank account.

Consider opening a low-cost Electronic Transfer Account (ETA). This account costs no more than $3.00 per month, and you get at least four free cash withdrawals per month.

Social Security Statements Halted

A seemingly small, cost-saving, decision by the federal government could have a significant impact on those preparing for retirement and trying to calculate their Social Security benefits. This decision was documented in a recent article in a San Antonio newspaper. Here are excerpts from the article:

One of the most valuable pieces of mail from the federal government every year won't be coming anymore.

It may not rank with an income-tax refund check, but the annual Social Security Statement arriving about three months before workers' birthdays each year was a fabulous service. The statement was probably the single most important financial planning document most people ever received.

The Social Security Administration started mailing the statements in 1999 to everyone over the age of 25. The service was only 12 years old when the agency decided to cut costs by ending the automatic statements. As they say, the good die young.

The mailings stopped without advance notice. People with July birthdays and later won't receive one this year. The agency stopped the statements despite not having them available online. It hopes to do so by the end of the year. Most people won't bother to check anyway.

The Social Security website does have a retirement benefits estimator, but it does not have the range of information the yearly mailed statement contained.

The online estimator is a hassle. It's not just entering your name and Social Security number. You must provide your mother's maiden name, date of birth, place of birth and the previous year's income. Most people wouldn't know their previous year's earnings, so they would have to look it up.

After all of that, the estimator provides only estimates of monthly retirement benefit amounts at age 62, 66 (67 for people born after 1960) and 70.

The mailed statement provided the benefit amounts, plus disability payment estimates and survivor benefits, if you died during the year. The mailed statement also contained earnings records, with incomes for every year of your career. If a mistake was made, you could correct it.

The Social Security Administration says that stopping the four-page statements will save the agency about $30 million in the current fiscal year and $60 million in 2012. Last year, the agency mailed statements to 152 million people. The mailed statements had been available by request since 1988, but the agency no longer takes requests.

The value of the statements to individuals goes beyond deciding whether to retire with early, full or delayed benefits. By seeing benefit amounts, individuals were reminded they will need other income sources in retirement. The statements were helpful nudges toward starting an individual retirement account or signing up for an employer-sponsored plan, such as a 401(k).

The Social Security Administration says it will consider mailing statements to people once they reach the age of 60. That will be too late for workers who should have started separate retirement accounts earlier in their career.

Retirement is now a matter of total individual responsibility. Everybody must plan their retirement income financially, and they also have to be persistent to dig up the information they need periodically to plan correctly.

Medicare Rise Could Mean No Social Security COLA

For the past two years Social Security retirees and Social Security disability recipients have had no cost of living allowance increases because the COLA is tied to inflation and inflation has been very low.

This coming year inflation might be high enough to justify a COLA adjustment, but now there's another problem — the cost of Medicare has risen so much that Medicare premiums might increase also. The net effect could be that the COLA is offset by the Medicare premiums, resulting in no change for beneficiaries.

Fortunately, there is a provision in the law that prevents benefits from being reduced due an increase in Medicare premiums.

This development was written up in detail in a recent article at NPR.org. Here are excerpts from that article:

About 45 million people — 1 in 7 in the country — receive both Medicare and Social Security. By law, beneficiaries have their Medicare Part B premiums, which cover doctor visits, deducted from their Social Security payments each month.

David Certner of AARP estimates that as many as three-fourths of beneficiaries will have their entire Social Security increase swallowed by rising Medicare premiums next year.

It's a tough development for retirees who lost much of their savings when the stock market collapsed, who lost value in their homes when the housing market crashed and who can't find work because the job market is weak or they are in poor health.

Medicare premiums are absorbing a growing share of Social Security benefits, leaving retired and disabled people with less money for other expenses, according to a report by the Congressional Research Service.

Social Security recipients spend, on average, 9 percent of their benefits on Medicare Part B premiums, plus 3 percent on premiums for the Medicare prescription drug program. By 2078, people just retiring would spend nearly one-third of their benefits on premiums for both Medicare programs, the report said. Also, when premiums for the prescription drug program increase, as they do almost every year, they can result in a pay cut for Social Security recipients.

"We could very well be entering a period where we're all stuck with flat benefits because of the growth in health care costs," said Mary Johnson, a policy analyst at The Senior Citizens League.

By law, Social Security cost-of-living adjustments, or COLAs, are determined each year by a government measure of inflation. When consumer prices go up, payments go up. When consumer prices fall, payments stay flat until prices rebound

There had been a COLA every year from 1975 through 2009, when a spike in energy prices resulted in a 5.8 percent increase, the largest in 27 years. Since then, the recession has depressed consumer prices, resulting in no COLA in 2010 or 2011.

Older people might feel they are falling behind because they haven't had a raise since 2009, but many are benefiting, said Andrew Biggs, a former deputy commissioner of the Social Security Administration who is now a resident scholar at the American Enterprise Institute.

Consumer prices dropped, but Social Security benefits didn't drop, Biggs said. At the same time, health care costs went up, but Part B premiums stayed the same for most beneficiaries.

"They are better off because of that," Biggs said. "Somebody else is paying for a greater share of their health care. This will get me hate mail, obviously. But it is what it is."

Next year, the trustees who oversee Social Security project a 1.2 percent COLA. President Barack Obama, in his spending proposal for the budget year that begins Oct. 1, projects a COLA of 0.9 percent. The average monthly payment is $1,077, so either way, the typical increase is projected to be between $10 and $13.

The current spike in energy prices could boost next year's COLA, if it lasts through September, when the increase for 2012 will be calculated. The COLA will be announced in mid-October.

Medicare Part B premiums must be set each year to cover 25 percent of program costs. By law, they have been frozen at 2009 levels for about 75 percent of beneficiaries because there has been no increase in Social Security. That means the entire premium hike has been borne by the remaining 25 percent, which includes new enrollees, high-income families and low-income beneficiaries who have their premiums paid by Medicaid, the federal-state health care program for the poor.

The 2009 premium levels, which are still paid by about three-fourths of beneficiaries, are $96.40 a month. Most of those who enrolled in the program in 2010 pay $110.50 a month and most of those who enrolled in 2011 pay $115.40.

The Medicare trustees project a Part B premium of $113.80 a month for next year. Obama's budget projects a monthly premium of $108.20, said Donald McLeod, a spokesman for the Centers for Medicare and Medicaid Services. McLeod cautioned that the projections could change significantly by September, when 2012 premiums are calculated.

Under either projection, a small share of beneficiaries would get lower premiums. The vast majority would get higher premiums that could swallow their Social Security COLA.