Author Topic: There are differences between SSI and SSDI/Garnishment/Student Loans/Child Suppo  (Read 1032 times)

0 Members and 1 Guest are viewing this topic.

adda

  • Valued Member
  • Posts: 18
HI. I wanted to take a moment and clarify something, because I see terms being misused and in terms of debt, the wrong term (acronym) can drastically
change the implications. There are TWO programs under the Social Security Act (besides Retirement benefits) that provide income.

SSI (Supplemental Security Income)
This is a needs based program, a person need not have earned work credits to be eligible for this program.
Payments are the same across the nation (base rate) but states may add to that, so a payment to an individual (or couple) in one state is not
necessarily the same as in another.

To qualify, an individual must be: 65 or older, blind, or disabled AND below the "means testing" for resources (income and assets). Some income is excluded, as well as SNAP
benefits, scholarships and others.

Medicaid is usually the "health insurance program" provided although it may be called by a different name in various states.

In general, in regard to debt, SSI benefits CAN NOT be garnished, even for child support.



SSDI (Social Security Disability Insurance)
This program is based on "work credits earned" and eligibility can be based on the individual's, spouse's or parent's work record. Payment is by formula based in "lifetime average earnings"
and may be reduced by certain other benefits (Workers' Compensation and Black Lung), therefore there is no "set amount" nor do states add to the payment. Someone with Short or Long Term Disability Insurance provided by an employer or their own policy is usually required, in order to continue receiving benefits under STD/LTD, to apply for SSDI at a certain point. If they qualify for SSDI, their other disability insurance may be reduced by the amount of their (monthly) benefit.

Most SSDI recipients qualify for Medicare A & B after 24 months.

SSDI benefits CAN be garnished, in certain instances. Namely, child (or spousal) support, Mandatory Victim Restitution Act, federal taxes and "withhold and pay another federal agency for a non-tax debt you owe to that agency according to the Debt Collection Improvement Act of 1996 (Public Law 104-134)".

If you are a parent and a non-custodial parent is receiving SSDI benefits, it is to your advantage (and a lot easier than court, generally) to apply directly with SSA for SSDI "dependent benefits" under the recipient's record. Children 18 and under generally, 18 - 19 full-time student grade 12 or below, 18 and above with disability that started before age 22. Natural, adopted or step-child qualify, as can a dependent grandchild.

Neither SSDI nor SSI can be garnished, in general, by a consumer debt collector. Since these benefits are "exempt", you are generally NOT required to make payments (or agree to an arrangement) toward a (consumer) debt if you are also otherwise exempt. However, depending on not only your (other) income and assets, your future aspirations and so on, it would be wise to assess your debt (and therefore, repayment) situation in light of all factors.



STUDENT LOANS

There have been a lot of stories on garnishments (of SSDI) for Student Loans. I found an article on Forbes that explains: " the government doesnít actually consider Social Security and similar benefits as income under its income-based repayment plans for student loans. The upshot is that if you derive most of your income from Social Security, you donít have to pay off your student loans. That is very useful information that no one seems to know.

And one more thing. All federal student loans are eligible for an income-based repayment plan, including Parent PLUS loans and loans in default. There are two small catches, though: First, you have to know this (the government does not advertise it); and second, youíll need to fill out paperwork and send it to the company that services your loans, or complete an online form every year." http://www.forbes.com/sites/jasondelisle/2014/09/11/social-security-and-unpaid-student-loans-what-the-feds-wont-tell-you/#101606305c89

There's more info in the article linked, but it's always a good idea to check for updates. From what I understand, up to 15% of SSDI benefit may be garnished unless the required (annual) paperwork is completed and turned in, BUT your loan will remain active and "in good standing". If you have no other income, your required payment is $0; you will be under the Income Based Replayment Plan and time is counted (whereas it apparently "halts" while in deferment/forbearance).

If you are working: "Anyone earning less than $11,671 in 2014 would have an AGI below the exemption, and so would owe nothing in student loan payments."

One other caution: I did not research "private student loans"; please do not take this information as applying to them!


Hopefully, some of the information provided will brighten someone's day or clarify some common misunderstandings.

(sources: ssa.gov and forbes.com)