Over the past year, the newspaper The Oregonian, Portland and Oregon’s local paper, has been running a series carefully documenting the devastating delays at the Social Security hearing offices, putting a human face on this non-comedy of errors and underfunding. Brent Walth and Bryan Denson of The Oregonian have just won the prestigious Bruce Baer Award for Investigative Reporting, for uncovering the enormous backlog of disability claims in the Social Security system. The articles showed that while claims management is a nationwide problem, Social Security Administration’s Portland office has one of the slowest case-completion rates in the country. The reporters found several cases in which claimants died while waiting for a benefits determination from the office: On average, it takes nearly two years for the Portland office to handle the appeal of a case.

The Philadelphia Inquirer today notes that “if you or a loved one is on Social Security or Supplemental Security Income and that $250 stimulus payment for each beneficiary has not arrived by check or direct deposit, visit socialsecurity.gov online or call 800-772-1213. Start inquiring on June 4.

Medicaid patients in nursing homes may keep their $250, which will not be counted as income for Medicaid purposes. Hang up on anyone calling to help you get the payment. Don’t spend it all in one place.

Second, you may have heard that the government has decided inflation is so low that for the first time there will be no Cost of Living Adjustment or COLA (increase) in Social Security benefits for the next two years. Former Deputy Social Security Commissioner Andrew Biggs says this news is not all bad because benefits will remain the same while the cost of living is less, which means many beneficiaries will still be ahead. However, many retirement experts have suggested the cost-of-living index for older people should be higher than the rest of the population, in large part because of out-of-pocket medical and drug costs.

Barbara Kennelly of the National Committee to Preserve Social Security and Medicare says that “zero COLAS would also mean no Medicare Part B premium increases” for most beneficiaries, for, by law, Social Security benefits may not decrease for current beneficiaries. However, new and affluent beneficiaries will be subject to the higher Part B premiums. And Part D premiums, which are expected to rise by 11 percent, she said, will continue to shred the already-tattered budgets of many older Americans.” Link to story here:

Government Executive reports today: The economic downturn, inadequate funding and red tape are at the core of an increasing backlog of Social Security disability cases, panelists said during a roundtable discussion in Washington on Thursday.
The government has tried for years to reduce the number of cases awaiting review from administrative law judges, but the recession is a significant setback, said Alan Cohen, senior budget adviser for the Senate Finance Committee.
“Initial claims are going to skyrocket in 2010,” he said during the forum, organized by the Association of Administration Law Judges. “The tsunami hasn’t hit the administrative law judges here.”
At issue are cases where a claim has been rejected at the state level and is sent to Social Security Administration ALJs. Currently, there are about 750,000 cases pending, according to Cohen. SSA has set a goal of reducing the pile of pending cases to 466,000 by 2013 — a step SSA Commissioner Michael Astrue has told lawmakers would decrease average processing times from 500 to 270 days. See article here:

Us News and World Reports joins a host of papers today reporting “impending” doom for the Social Security Trust Fund. Of curse, the economy has taken its toll, but all in all we are OK for three decades out - then the dreaded out-of-funds date has only been moved up two years.

US News says: “The annual hair shirt report of Social Security trustees was released on Tuesday. To no one’s surprise, our national retirement and health benefit programs are headed for perdition even more quickly than they were last year. Due to the recession, the effective bankruptcy date is 2037 for what’s technically called the Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds. That’s four years earlier than the forecast in last year’s report — no mean feat in only one year. Program expenses exceed revenues beginning in 2016 — that’s only seven years away, folks — and all assets are exhausted 21 years later.

And this, sadly, was the good news.

As the trustees said, “Medicare’s financial status is much worse.” It’s hospital insurance component (HI) already pays out more than it takes in, and is busily eating away at its assets as we speak. That tasty meal will be done in only eight years, at which time HI reserves will be zero,nada, zilch. The Medicare Supplementary Medical Insurance (SMI ) Trust Fund operates closer to break even, which is good, because it doesn’t have much in the way of assets. The bad news is that the only way it comes close to breaking even is by levying annual increases in rates that are growing faster than the economy and the incomes of the people who rely on the fund to pay for their doctors and prescription drugs.” See article here:

The New York Times reports that there will be no cost of living (COLA) increase in checks for 2010. Another impact of the bad economy for recupients of disability and retirment income. The Times says ” for the first time in more than three decades, Social Security recipients will not get any increase in their benefits next year, federal forecasts show.

“The absence of a cost-of-living adjustment, calculated under a formula set by law, will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs. More than 50 million people receive Social Security.
http://www.nytimes.com/2009/05/03/us/politics/03benefits.html?_r=1&hp See article here:

If this sounds like something for coin collectors in Alaska, bear with us here…

Ever you wonder why a person who is already receiving a private disability payment should apply for Social Security disability benefits, here are some facts. These other disability payments might be coming from workers compensation, the VA, a private long term disability plan, or even a settlement from an injury lawsuit. There are several factors that make concurrent Social Security disability eligibility beneficial.

• We each pay in to the Social Security system, buying what are called “covered quarters”. If you earn $980 in a quarter in 2009, you buy coverage for that quarter. These covered quarters maintain your eligibility for Social Security disability, much as an insurance policy payment would.

• A worker needs coverage in 20 out of the last 40 quarters (5 out of the last 10 years) in order to be eligible for disability payments, with some exceptions for very young workers.

• If you have been found disabled by Social Security, the quarters for which you get benefits are called “frozen quarters,” and do not count against you as uninsured time periods, either at retirement or for future disability claims.

• Typically other private disability programs pay benefits, but no FICA taxes. No “quarters” are purchased because no FICA taxes are paid, and Social Security disability eligibility can lapse.

• Other disability programs may not provide medical insurance coverage. The Medicare benefits that come with Social Security disability benefits may cover some unreimbursed medical expenses, and last longer.

• If you stop working and paying FICA taxes, your eligibility for Social Security disability lapses after five years, like an insurance policy would terminate for lack of payment. This means that you cannot draw disability payments, no matter how many years you worked prior to that. (There are exceptions if your disability onset can be shown to be within the covered period.) Your Social Security taxes remain in your account until retirement.

This could also reduce the eventual amount of your retirement benefit, because there would be a long period with no covered quarters.

Social Security is calibrated to calculate appropriate offsets – to workers comp, state benefit programs and VA benefits. Private disability programs usually require an application for Social Security disability and then do their own offsets. A disabled person should always apply for every available benefit.

A few weeks ago, prolific blogger Justin Hayford at the Chicago AIDS Legal Council (http://alcc-legalpad.blogspot.com/) posted a terrific article on how to get presumptive benefits when applying for Social Security disability. This means that they give you your benefits NOW, and verify the medical records later. As you can imagine, it is reserved for serious and immediately apparent situations, but he argues it is under-used. With his permission we share it here, it has valuable information about this little-used corner of disability law:

The Washington Post had a good column the other day, revisiting the spectre of investing the federal Social Security funds in the stock market. Read on:

“The idea of the market as cure-all arose during the great bull market that ran from August 1982 through March 2000. With stocks (as measured by the Standard & Poor’s 500-stock index) returning an average of 20 percent a year in capital gains and dividends, middle-class people could fund their own retirements with minimal effort and even afford private college for their kids if they started saving early. Market gains would transform state, local and corporate pension funds from underfunded to overfunded, and capital gains — and stock option — related tax revenue would balance budgets on the federal, state and local levels. No pain, all gain.

The topper came four years ago: President George W. Bush could even propose privatizing Social Security by letting beneficiaries invest in stocks and have the idea taken seriously. Now the cycle has shifted. For many older baby boomers who once felt comfortable but have seen their 401(k)s and other accounts eviscerated the past two years, the magic words are no longer “stock market” — they’re “Social Security.” See full article here:

Today’s San Jose Mercury writes that “the Social Security Disability Insurance system (SSDI) is crumbling under the pressure of a substantial disabled population, shrinking budgets and a wave of agency retirements. Social Security employees work as hard as they can to help people who deserve care, but their best efforts aren’t putting a dent in a hearing backlog of 765,000 disabled Americans — including 62,031 Californians — waiting months or years to receive their rightful benefits.

The recession is making things even worse. Commissioner Michael Astrue recently told the media the SSA is facing an unanticipated 10 percent increase in its disability claims caseload. That’s 250,000 additional cases the SSA needs to review, further bogging down the system.” See San Jose Mercury article here:

AARP has provided a great summary of Social Security disability benefits. For most U.S. workers and their families, Social Security Disability Insurance (SSDI) provides protection against a key source of economic insecurity-the loss of earnings due to disability. Today, 9.3 million Americans-disabled workers, their spouses, and dependent children-rely on SSDI to replace lost wages. This primer provides an overview of the SSDI program, including who is covered, what benefits they receive, how the program is administered, and how it is financed.
Download the full document here: