Stimulus Checks Cause Some To Lose Disability Benefits

Legal aid attorneys say the government is mistakenly docking benefits because of coronavirus rebate payments.

Stimulus payments aren’t supposed to count against eligibility for social insurance programs like disability benefits, but some people might have lost benefits because of too much money in their bank accounts.

Mar 24, 2021: A key House committee wants the heads of the Internal Revenue Service and Social Security Administration to explain by Friday why the $1,400 stimulus checks from the American Rescue Plan have been slow to get out to people on Social Security and other government programs.

The Social Security Administration has suspended disability benefits for some Supplemental Security Income recipients because the stimulus payments pushed their bank accounts above the program’s archaic $2,000 limit, according to legal aid attorneys.

“The whole point of stimulus was to help people who were being harmed during COVID, and now there’s going to be people facing a cessation of benefits and they’re going to end up in a worse place,” said Michelle Spadafore, senior supervising attorney with the New York Legal Assistance Group, citing several cases in New York that she’s aware of.

It’s likely that relatively few of the program’s nearly 8 million beneficiaries have been affected. The program provides $794 monthly to people with disabilities and limited resources who can’t earn much on their own. Most people on SSI would have been eligible for full stimulus payments from the three coronavirus relief bills Congress passed.

Everyone on SSI is subject to the resource limit, which hasn’t been updated since 1989. It’s $2,000 for individuals and $3,000 for couples, with exclusions for a home, a car and certain other assets. 

Because the coronavirus stimulus payments are technically tax credits, they shouldn’t have affected eligibility for any social program, whether it’s food benefits or Social Security. Under federal law, tax credits don’t count as income or “resources” for eligibility purposes within a year of their receipt.

But the Social Security Administration is a huge agency with lots of employees, and it’s possible some have made mistakes, said Stacy Cloyd, director of policy and administrative advocacy with the National Organization of Social Security Claimants’ Representatives. What should happen, Cloyd said, is that when the agency sees more than $2,000 in someone’s bank account ― the overall balance is all the agency sees ― it should investigate and then back off if the cash came from a tax rebate within the past year.

Jul 10, 2019: David has lived on the streets of Denver for five years. Like many elderly homeless, he gets social security but it’s not enough to pay for rent.

“If the resource limit were $10,000 this would be a lot less of an issue,” Cloyd said. President Joe Biden has proposed updating the asset limit, but Democrats haven’t yet reintroduced their bill to change the policy.

Joseph Morris, a 67-year-old in Philadelphia, said the Social Security Administration notified him last year that he had lost eligibility for Supplemental Security Income payments because he had more than $2,000 in his bank account from June through November. Morris said the extra money came from the $1,200 payment he got from last year’s Coronavirus Aid, Relief and Economic Security Act.

Morris asked for a reconsideration, but the agency affirmed its decision in March. Starting next month, Social Security will take 10% out of Morris’ monthly benefits until it recoups the several thousand dollars the agency believes it overpaid him last year. Earlier this month, the agency said in a letter that “we are withholding part of your check to get back money you were overpaid.”

Morris thinks it’s ridiculous, and that losing $79 of his monthly income could make it hard to pay his electric bill.

“You’re going to give me a stimulus check to stimulate the economy, and I can’t go out under doctor’s orders and you’re penalizing me for having this money,” Morris said. “Now it’s going to cost me money to have this money.”

Morris’ attorney, Richard Weishaupt of Community Legal Services of Philadelphia, said he has another client facing the same problem. Weishaupt is hoping to get the agency to change its mind.

“It’s happening to a disturbing number of people,” Weishaupt said. Part of the problem is that both Social Security and legal aid offices are closed because of the coronavirus, meaning people on disability can’t walk in and ask for help like they could before the pandemic.

Social Security spokesman Mark Hinke said the economic impact payments Congress has approved don’t count as income under program rules and shouldn’t cause someone to lose benefits.

“There may be other income and resource considerations apart from EIPs that may cause a change in an SSI recipient’s benefit amount,” Hinke said. “Recipients should contact their local office with any questions or concerns related to their benefits and we will assist them.”

Though stimulus payments aren’t supposed to affect someone’s eligibility for a social program, that’s only true for a year. Since the CARES Act payments started going out in April 2020, people who still have the extra money in their bank accounts could legitimately run afoul of SSI’s resource limit in the coming months.

During a Senate Finance Committee hearing last month, Sen. Bob Menendez (D-N.J.) complained that a constituent on SSI faced suspended benefits because they had received too much money in federal unemployment benefits. Congress boosted benefits massively in the CARES Act, adding an extra $600 per week and expanding eligibility to include part-time workers, which may have made more SSI recipients eligible.

Grace Kim, an acting assistant deputy commissioner for Social Security, called it “an issue that we are currently looking at right now.”

“I don’t think that Congress intended to provide individuals the type of relief that we did during the pandemic only to have them lose their SSI,” Menendez said. “That could never have been Congress’ intent at the end of the day.”

https://www.huffpost.com/entry/economic-impact-payments-ssi_n_60a42440e4b03e1dd38fd540

Published by amongthefray

News with a historical perspective. Fighting against misinformation, hate, and revisionist history.

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