According to the 2011 Board of Trustees Report for the Social Security and Medicare Trust Funds issued in May 2011, the Social Security Trust Funds remain relatively stable, although the impact of the recession has resulted in some changes from last year's report. The 2011 report finds that, if no action is taken, the Trust Funds will be able to pay 100% of scheduled benefits until 2036, one year earlier than found in the 2010 Report. Even if no action is taken, scheduled benefits would still be paid at a reduced level of 77% starting in 2037 using incoming payroll tax revenue.
There are two Trust Funds - the Old Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance Trust Fund, but they are treated as a single Trust fund for most purposes. The Board of Trustees, who issues the annual report, is made up of the Secretaries of Labor, Treasury, and Health and Human Services; the Commisioner of Social Security; and two trustees who represent the public and are from different political parties. The Social Security Act requires the Board of Trustees to issue an annual report to Congress.
The current forecast by the Trustees is similar to those of past years. Using intermediate assumptions - considered the "best estimate" - and projecting over the next 75 years, the trust fund will continue to build up reserves through a surplus until 2022. The longrange shortfall is 2.22 percent of taxable payroll, or in other terms, 0.8 percent of Gross Domestic Product (GDP) over the next 75 years.
A more problematic issue, at least on the surface, is that the Report finds that the Disability Insurance Trust Fund will be depleted in 2018. The much larger OASI Trust Fund is solvent through 2038. A recent paper by the Center on Budget and Policy Priorities (CBPP) points out that the increase in the number of Social Security Disability Insurance beneficiaries is not surprising, when compared to the increase in the working population.
Rectifying the imbalance between the Trust Funds has occured in the past. Congress can act to reallocate more of the payroll tax to the Disability Insurance Trust Fund from the OASI Trust Fund. In a 1994 reallocation, Congress expected the Disability Trust Fund to stay solvent just until 2016. The Trustees now project solvency of the Disability Trust Fund until 2018. The Trusteees and other policy makers advise that Congress should act sooner than later to ensure the Trust Fund's solvency.
An easy to understand paper on the 2011 Trustees Report is available at http://www.nasi.org/. Go to www.ssa.gov/OACT to review the 2011 Trustees' Report in full.
For more information on Social Security Disability/SSI claims in Southern Nevada contact the offices of Gerald M. Welt at (702) 382-2030 or go to http://www.lasvegassocialsecuritydisability.com/.
Saturday, July 30, 2011
Monday, May 2, 2011
New Rules Kick In For Social Security and SSI
NEW RULES KICK IN FOR SOCIAL SECURITY AND SSI ON MAY 1
A press release from the National Consumer Law Center:
BOSTON, MA − Beginning May 1, 2011, elders, veterans, and the disabled can rest a bit easier as a new federal rule kicks in that will limit creditors’ ability to seize funds from Social Security, Social Supplemental Income (SSI), VA, and other federal benefits held in bank accounts in favor of direct deposit or prepaid cards. New rules making the Direct Express® prepaid card the default method of issuing federal payments and limiting the use of other prepaid cards and paper checks will also be in effect May 1.
If a bank receives a garnishment order, the bank will be required to determine whether an account contains electronically deposited federal benefit payments, and if so, the bank will be obligated to protect two months of those payments from seizure to satisfy garnishment orders. To protect funds deposited before the two-month time period, or deposited by check the recipient will have to follow the state procedure for claiming exemptions.
“This regulation will provide a much-needed protection for exempt federal benefits. We are enormously grateful to the U.S. Treasury Department for its leadership in resolving the difficult issue of how to protect federal benefits in bank accounts from illegal seizure,” said Margot Saunders of the National Consumer Law Center. “We also appreciate the Treasury Department’s efforts in the new prepaid card regulation to protect recipients from overdraft and pay-day type loans attached to these new payment devices.”
The U.S. Treasury recently took a hard-line approach regarding elimination of paper checks. Effective May 1 of this year, new applicants filing for all federal payments including Social Security, Supplemental Security Income (SSI), veterans benefits and wages will receive their payments electronically, unless they qualify for one of a very few exemptions. If recipients do not provide information to the federal payment agency regarding a bank account or prepaid card into which they want their payments electronically deposited, they will be provided the federal government-issued Direct Express® card. The Direct Express card is likely to be the best option for recipients who are unbanked, but pursuant to a new rule, they may also choose privately branded prepaid cards to receive their benefits. Additionally, most current recipients will be required to receive their federal benefits electronically as of May 1, 2013.
The Direct Express® prepaid debit card, issued through the U.S. Treasury, is the best prepaid card available. Direct Express® cards have considerable protections for recipients, including limits on fees, legal protection against unauthorized charges, and requirements for free access to funds. They are likely to be substantially less expensive than other prepaid cards.
Nevertheless, if a federal payment recipient wishes to have funds deposited to a prepaid card other than the Direct Express® card, only certain cards are eligible. The most important conditions are that (1) prepaid cards cannot receive federal payments if they are attached to a line of credit or loan agreement that is automatically repaid upon deposit of the federal payment, and (2) the card must comply with consumer protections required through the Electronic Funds Transfer Act (EFTA). Importantly, the EFTA limits overdraft fees for ATM and one-time debit transactions unless the person opts in for such coverage (opting in for overdraft protection may not be beneficial for the recipient). The EFTA protections against unauthorized charges, billing errors, and disclosure of fees will also be in effect for these cards.
Current benefits recipients have until March 1, 2013 to choose an electronic payment option. After that date, no payments will be issued via check, unless the person qualifies and is approved for an exemption.
To continue receiving paper checks, recipients must be approved by the US Treasury for one of the following exemptions:
• Aged 90 years or older, as of May 1, 2011 (no wavier required)
• Mentally impaired
• Live in a remote geographic area lacking the capability to support an electronic financial transaction
Effective March 1, 2013, both new applicants and current recipients who do not choose another option (and have not been granted a wavier) will automatically receive their payments on the federal government’s Direct Express card.
A press release from the National Consumer Law Center:
BOSTON, MA − Beginning May 1, 2011, elders, veterans, and the disabled can rest a bit easier as a new federal rule kicks in that will limit creditors’ ability to seize funds from Social Security, Social Supplemental Income (SSI), VA, and other federal benefits held in bank accounts in favor of direct deposit or prepaid cards. New rules making the Direct Express® prepaid card the default method of issuing federal payments and limiting the use of other prepaid cards and paper checks will also be in effect May 1.
If a bank receives a garnishment order, the bank will be required to determine whether an account contains electronically deposited federal benefit payments, and if so, the bank will be obligated to protect two months of those payments from seizure to satisfy garnishment orders. To protect funds deposited before the two-month time period, or deposited by check the recipient will have to follow the state procedure for claiming exemptions.
“This regulation will provide a much-needed protection for exempt federal benefits. We are enormously grateful to the U.S. Treasury Department for its leadership in resolving the difficult issue of how to protect federal benefits in bank accounts from illegal seizure,” said Margot Saunders of the National Consumer Law Center. “We also appreciate the Treasury Department’s efforts in the new prepaid card regulation to protect recipients from overdraft and pay-day type loans attached to these new payment devices.”
The U.S. Treasury recently took a hard-line approach regarding elimination of paper checks. Effective May 1 of this year, new applicants filing for all federal payments including Social Security, Supplemental Security Income (SSI), veterans benefits and wages will receive their payments electronically, unless they qualify for one of a very few exemptions. If recipients do not provide information to the federal payment agency regarding a bank account or prepaid card into which they want their payments electronically deposited, they will be provided the federal government-issued Direct Express® card. The Direct Express card is likely to be the best option for recipients who are unbanked, but pursuant to a new rule, they may also choose privately branded prepaid cards to receive their benefits. Additionally, most current recipients will be required to receive their federal benefits electronically as of May 1, 2013.
The Direct Express® prepaid debit card, issued through the U.S. Treasury, is the best prepaid card available. Direct Express® cards have considerable protections for recipients, including limits on fees, legal protection against unauthorized charges, and requirements for free access to funds. They are likely to be substantially less expensive than other prepaid cards.
Nevertheless, if a federal payment recipient wishes to have funds deposited to a prepaid card other than the Direct Express® card, only certain cards are eligible. The most important conditions are that (1) prepaid cards cannot receive federal payments if they are attached to a line of credit or loan agreement that is automatically repaid upon deposit of the federal payment, and (2) the card must comply with consumer protections required through the Electronic Funds Transfer Act (EFTA). Importantly, the EFTA limits overdraft fees for ATM and one-time debit transactions unless the person opts in for such coverage (opting in for overdraft protection may not be beneficial for the recipient). The EFTA protections against unauthorized charges, billing errors, and disclosure of fees will also be in effect for these cards.
Current benefits recipients have until March 1, 2013 to choose an electronic payment option. After that date, no payments will be issued via check, unless the person qualifies and is approved for an exemption.
To continue receiving paper checks, recipients must be approved by the US Treasury for one of the following exemptions:
• Aged 90 years or older, as of May 1, 2011 (no wavier required)
• Mentally impaired
• Live in a remote geographic area lacking the capability to support an electronic financial transaction
Effective March 1, 2013, both new applicants and current recipients who do not choose another option (and have not been granted a wavier) will automatically receive their payments on the federal government’s Direct Express card.
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