P.I.S.S.D. -- Personal Injury, Social Security Disability. Dallas Texas Lawyers

Disabled Often Wait Years For Social Security Disability Payments

The Dallas Morning News today published an article decrying the absurd delay between the time a disabled person files for Social Security disability benefits and the time an Administrative Law Judge finally makes a decision on the claim. Here are excerpts from the article, headlined  "Disabled often wait years for Social Security payment":

Now that most of the nation's 78 million boomers have entered their prime years for illnesses and disabilities, they're flooding Social Security with claims and creating an unprecedented backlog. Pending requests for a hearing before an administrative law judge have more than doubled to 750,000 in the last decade.

Nationally, the average wait for a judge's decision has stretched to 502 days this year, compared with 258 in 2000. At some hearing offices, the average wait approaches 800 days. In North Texas, claimants wait an average of 461 days at the North Dallas office, 453 days at the downtown office and 411 days in Fort Worth.

Even under the best circumstances, the boomers' claims would strain Social Security's workforce. But years of congressionally mandated belt-tightening have left the agency's staff at its lowest level since the 1970s. It now has fewer judges than a decade ago.

There are also allegations that private disability insurance companies are unnecessarily clogging the public system by requiring many of their applicants to file separate, and often questionable, claims with Social Security.

Social Security's new administrator, Michael Astrue, has made reducing the backlog of disability cases a priority, acknowledging that people have died before receiving a decision. His efforts have brought the first significant increase in funding in 15 years for his agency's operations.

Today, 7.2 million Americans collect Social Security disability benefits because of a medical condition that prevents them from working for at least one year. The average monthly check is $1,004.

Two of three disability claims are initially denied. Most of those who are rejected give up, but the others appeal, first to another claims examiner and then to an administrative law judge.

People who request administrative hearings often hire attorneys or other professionals, who customarily charge 25 percent of the retroactive benefits, up to $5,300, and collect only if the clients win.

Patience and tenacity can pay off. About 60 percent of those who request hearings go on to win their cases.

As frustrating as the delays have been, experts say, it's hard to blame all of them on the overworked, underfunded Social Security Administration.

At times in recent years, the agency has had only enough money to hire one employee for every three who leave. Since 2001, Congress has appropriated an average of $150 million less each year than the president requested.

"We're an agency under stress," said Greg Heineman, president of the National Council of Social Security Management Associations, whose members are the agency's managers. "We have 5,000 fewer employees than in 2005, yet more work to do."

Mr. Astrue wants to hire 50 to 75 more administrative law judges next year, but he has also pushed a number of initiatives to improve efficiency.

The reforms have included converting the remaining paper files to computer files, paying particular attention to the oldest pending cases, expediting decisions on clear-cut cases like late-stage cancer and increasing judges' productivity by relying more on video hearings, such as in remote areas.

Danger Ahead For The Social Security System

According to a CNN story today, Treasury Secretary Henry Paulson is warning about the same dangers I mentioned in a January post on this blog — we're about to run out of money for Social Security and Medicare. Here are excerpts from the article:

Treasury Secretary Henry Paulson, saying that Social Security is "financially unsustainable," called Tuesday for quick action to keep the system strong and released a report detailing the program's funding shortfalls.

The federal government will have to start paying back what it owes the Social Security trust fund in 2017 so the program can continue paying 100% of benefits. By 2041, if the system is left unchanged, Social Security will only be able to pay out 78% of benefits promised to future retirees.

Shoring up Social Security is one of the main economic issues that will face the next president. Most proposals involve raising taxes or reducing benefits. Democrats typically have opposed benefit reductions while Republicans have opposed tax increases. 

"This year's Social Security Report again demonstrates that the Social Security program is financially unsustainable and requires reform," Paulson said at a briefing. "The sooner we take action ... the less drastic needed changes will be."

Borrowing from the future

For years, the Social Security program has been taking in more in payroll taxes from existing workers than it needed to fund benefits. The government borrowed that surplus and promised to pay it back with interest by issuing special issue bonds to the program.

But the proceeds from those bonds are finite, which is why the trustees estimate that the trust fund will run dry by 2041. Without that cushion, Social Security would only be able to pay out the money it collects in payroll taxes.

Demographics are a major reason for the funding shortfall. The number of workers, compared to retirees, has begun to shrink. That means the system will produce a smaller surplus, then none at all, and eventually it won't be able to pay out all benefits promised to future retirees.

Last year, the trustees also estimated that the government would need to start paying back the program in 2017, and that the Social Security trust fund would be exhausted by 2041.

Currently, the first $102,000 of wages are subject to the 12.4% payroll tax that funds Social Security. Typically, half the tax is paid by workers, and the other half is paid by employers.

To keep the system solvent over the next 75 years, the trustees estimated that the Social Security payroll tax rate would need to increase to 14.1%, up from the current 12.4%. Or lawmakers could bring it into balance by cutting benefits by 12%.

Nonpartisan experts say the pain of fixing Social Security can be lessened in two ways: Make changes soon so that they affect more people but in a less dramatic manner, and implement a combination of tax increases and benefit reductions so that neither is particularly steep.

Medicare a bigger problem

Medicare, which was also addressed in Tuesday's report, has an even larger and more immediate funding deficit to address.

The Medicare program is already taking in less than it has committed to pay out, and the trustees forecast that the Medicare trust fund will be depleted by 2019, at which point Medicare would only be able to pay out 78% of costs.

Medicare was designed to be funded by three sources: payroll taxes; Medicare premiums paid by beneficiaries; and general revenue or money from income taxes.

The payroll tax portion of that funding comes from a 2.9% tax on all wages - half of which is paid by workers and half by their employers. To make Medicare solvent over the next 75 years, the trustees estimate that 6.44% of wages would need to be taxed.

Social Security Administration Hires New Administrative Law Judges

Michael J. Astrue, Commissioner of Social Security, announced this week that the agency has begun making offers to 144 of the 175 new Administrative Law Judges (ALJs) it will hire this fiscal year. Due to litigation and budget cuts, the agency has about ten percent fewer ALJs than it did a decade ago. During that same time, the number of cases waiting for a hearing decision has more than doubled. Here is the complete press release from the Social Security Administration:

Social Security Offers Positions to 144 Administrative Law Judges

New Hires a Key Step in Reducing Agency’s Backlog of Disability Cases

Michael J. Astrue, Commissioner of Social Security, today announced that the agency has begun making offers to 144 of the 175 new Administrative Law Judges (ALJs) it will hire this fiscal year. Due to litigation and budget cuts, the agency has about ten percent fewer ALJs than it did a decade ago. During that same time, the number of cases waiting for a hearing decision has more than doubled.

“The hiring of these new ALJs is a critical step in our plan to reduce the backlog of disability cases,” Commissioner Astrue said. “They represent one of the largest investments in ALJs this agency has ever made. When these ALJs are fully-trained, and combined with the other steps we are taking, we will be able for the first time in this decade to reduce the number of cases waiting for a disability hearing. I can hardly wait for them to start.”

The new ALJs will be brought on board in phases with the first hires reporting for duty in April, when they will begin an intensive orientation and training program. While initially handling a reduced docket, newly hired ALJs should be scheduling a full docket of cases by the end of the year.

“I have been very impressed with the caliber of the candidates eager to take on the challenging role of a Social Security ALJ,” Commissioner Astrue noted. “These new ALJs are top-notch legally and comfortable working in an electronic environment, which is of utmost importance as we strive to increase the efficiency and productivity of our ALJ corps.”

Hiring of additional ALJs is only one component of the plan the agency has put in place to reduce the backlog of disability cases. The agency also continues to make progress in many other areas including opening the National Hearing Center, completing the nationwide roll-out of the Quick Disability Determination process, implementing compassionate allowances and eliminating aged cases. More information about Social Security’s plan is available at www.socialsecurity.gov/disability under the heading What’s New.

“In May of last year, I presented Congress with a detailed plan to reduce the backlog of disability cases,” Commissioner Astrue said. “I am pleased to report that, with the strong support of the President and Members of Congress from both parties, we have been able to move forward with that plan. I urge Congress to continue its support with timely action on the President’s fiscal year 2009 budget request for Social Security. A delay in fully funding the President’s request will undermine the many positive steps we have taken this year.”

Baby Boomer Retirement - What Effect Will It Have On Social Security Solvency?

(This post was written for inclusion in the upcoming Facing Up blog carnival on Social Security.)

What effect will aging Baby Boomers have on the Social Security retirement and disability programs? Huge might be an understatement. The Baby Boom generation is defined as those roughly 80 million Americans born between 1946 and 1964. The first of the Baby Boomers began to turn 62 in January of 2008. That, of course, is the early retirement age for Social Security benefits. The Social Security Administration predicts that about a million Baby Boomers will take early retirement, even though their monthly checks will be 25 percent lower than if they waited until the normal retirement age of 66.

As "Boomers" begin to retire, the effect on the Social Security system will be twofold – first, there will be more retirees receiving benefits. Second, there will be fewer workers paying into the system to support those retirees. Boomers didn’t have as many children per family as our preceding generation did. We had about two children per family, compared with three children per family in our parents’ generation. So we didn’t produce as many new workers to support the old workers now retiring.

In fact, experts say that we have gone from about 16 workers paying into Social Security for every person drawing benefits in 1950, to a little more than three to one today. In a few more years we’ll be down to about two to one. This is not guesswork. We absolutely know how many new adult workers we will have 20 years from now, because they have already been born. We’re not going to have a sudden, unexpected increase in the number of workers. (Unless we have a major change in our immigration laws.)

Economic predictions are all over the map on this, but one guesstimate is that about the year 2017 the Social Security system will start to see that incoming payroll taxes aren’t enough to match outgoing retirement and disability benefits. The timing is less important than the inevitability of the event. Every year from 2008 until 2025 will see another wave of Boomers retiring. Somewhere during that time span, the benefits will outgrow the income.

That doesn’t mean the system will collapse at that time, because there’s enough money in the Social Security Trust Fund to carry us for another 20-25 years beyond the point at which benefits begin to outweigh income. Or at least there is supposed to be money in the Social Security Trust Fund. Unfortunately, the politicians have been raiding that fund for years, and it now consists primarily of IOUs from the federal government.

When the Trust Fund runs out of money, that’s when the crunch will come. Politicians will have to make some difficult decisions – increase taxes, decrease benefits, or both. We all know that politicians are loath to make hard choices, but it’s going to have to be done. And really, it won’t take all that much of a change to get the Social Security system back in balance.

But an even bigger problem will be the Medicare and Medicaid crisis looming ahead of us. These programs face not only the demographic changes the aging Baby Boomers present, but also the runaway inflationary costs of medical and pharmaceutical care. The Medicare shortfall could be roughly five times as large as the Social Security shortfall. That should well and truly frighten you.

Some estimates are that by the year 2040, Social Security and Medicare will consume as much as 60 percent of income taxes collected. The remaining 40 percent of tax revenue would have to finance all the rest of the federal government.

My own, uneducated, guess is that Congress will not significantly reduce benefits for people already receiving Social Security retirement benefits, but will probably have to make major changes to Medicare and thereby reduce medical benefits. I suspect the government will also tighten rules even more on disability benefits, and try to save money by denying obviously qualified Social Security disability applicants.

The future is not hopeless for Social Security and Medicare but it’s certainly not rosy. Big changes are coming, and the sooner they come, the better off we’ll be. The question is whether Congress and the Administration will have the political willpower to deal with the tidal wave on the horizon or whether they will hide their heads in the sand, as usual.

Road Map For Filing For Social Security Retirement Benefits

The Dallas Morning News had an excellent beginner's guide to Social Security retirement this week. As the nation's baby boomers begin to hit the early retirement age of 62, there will be literally millions of new retirement applicants. The News article is a great primer for planning to file for benefits. Please read the entire article. Here are few excerpts:

Beginning Jan. 1, the first of 78 million baby boomers will turn 62 and qualify for early retirement benefits. About three in four are expected to claim those benefits before their full retirement age of 66 or 67.

Officials hope the more computer-savvy members of that generation will turn to the agency's Web site – socialsecurity.gov – for advice and help.

"Look online first," said Wes Davis, a Social Security spokesman in Dallas. "If that's not possible, call our toll-free number [1-800-772-1213] or make an appointment to visit one of our offices."

To help boomers get started on the road to retirement, here are the answers to some of the most common questions about Social Security.

How, and when, do I sign up for benefits?

Generally, you should apply for retirement benefits about three months before you want them to begin, Mr. Davis said.

How much will I receive each month from Social Security?

"It's the No. 1 question we hear," Mr. Davis said. "Essentially, your benefits are based on how much you earned during your lifetime and when you retire."

The average monthly benefit for a retired worker will be $1,079 in 2008.

What's the best age to start drawing benefits?

To collect your full benefits, you'll need to wait until 66 if you're a boomer born before 1955 – and up to a year more if you're younger.

But as long as you're willing to accept a smaller check, you can retire anytime after your 62nd birthday.

How much can a spouse receive?

A spouse who hasn't worked or has low earnings may be entitled to a check equal to half of the other spouse's benefit, Mr. Davis said.

If you're eligible for your own retirement benefits and for spousal benefits, however, you can't collect both. Instead, you'll get the higher of the two.

What about divorced spouses' benefits?

You may be able to collect on your former spouse's Social Security record, but there are a number of wrinkles, Mr. Matthews said.

How much can I earn and still get Social Security benefits?

"Once you reach your full retirement age, there's no limit on what you can earn while on Social Security. But before then, your benefits may be reduced," Mr. Davis said.

Generally, if you're working, collecting Social Security and still under your full retirement age, the government will deduct $1 from your benefit for every $2 you earn above an annual limit – $13,560 in 2008.

Are my benefits taxable?

Possibly. Depending on your other income, you may have to pay federal income taxes on up to 85 percent of your benefits, Mr. Davis said.

You'll owe taxes if you file as an individual and your "combined income" is more than $25,000 or if you file a joint return and you and your spouse have combined income of more than $32,000.

When I start receiving benefits, will the amount be the same for the rest of my life?

No, your benefits are almost certain to increase each year, since Social Security is one of the few sources of retirement income adjusted for inflation.

If I collect Social Security at 62, can I also sign up for Medicare at the same time?

Probably not. Medicare coverage doesn't begin for most people until 65.

Another Editorial About Social Security Disability Backlog

Yesterday I mentioned an editorial in the San Antonio Express-News decrying the terrible Social Security disability claims backlog. Another similar editorial ran this month in the It. Louis Post-Dispatch. This one highlights a claimant who died shortly after being told he was not sick enough to qualify for Social Security disability benefits. Here are excerpts:

Mark Denny's disability hearing took place Monday at the Social Security Administration office in Creve Coeur. An administrative judge was there, as were lawyers and Mr. Denny's mother and sister.

Mark Denny himself wasn't there. He died on Jan. 24, 2006 — two weeks after being told he wasn't sick enough to collect federal disability insurance, and shortly after he decided to appeal.

His case isn't unusual, though most clients don't die during the average 486 days it takes from the time a disability appeal is filed with the Social Security Administration in St. Louis until a hearing can be held. It takes even longer in Kansas City: 684 days.

The problem isn't caused by lazy civil servants. The judges who preside over disability appeals face a crushing caseload, as do the Social Security employees who process the paperwork. Federal funding for their agency hasn't kept pace with demographics. Aging baby boomers have now reached their 50s and 60s. That's the age range of most people who file federal disability claims.

Consider these statistics:

— The Social Security Administration says a judge can handle as many as 360 cases at one time. The average caseload for judges across the country is 736.

— Nationally, the average waiting time for hearings is more than 500 days.

— The number of cases awaiting hearings has jumped to about 755,000 from 311,000 in 2000.

Social Security officials asked for an extra $100 million to hire 150 more judges. But President George W. Bush didn't include it in his budget. And when Congress voted to provide an extra $275 million in hopes of drastically reducing the backlog, it was included in an appropriations bill that Mr. Bush vetoed as being too expensive.

Many [claimants] have serious mental illnesses that go untreated while they wait. Lawyers who handle appeals say it has become common for clients to lose their homes or apartments. Mr. Denny, a graphic artist, was fortunate to have a mother who paid rent on a small St. Louis apartment and a sister who shopped for and looked in on him.

After an auto accident in 1995, Mr. Denny suffered steadily increasing pain in his back and legs. Doctors found dangerous blood clots. They worried that the clots could dislodge and travel to his heart or brain, causing heart attack or stroke.

They were right. Mr. Denny died of a stroke. He was 48 years old. His mother and sister have kept the case going for nearly two years. With luck, his case will be decided by spring. What's at stake are disability payments and medical expenses for the months before he died.

"I view it as justice for him," said Mr. Denny's sister, Katheryn Ludwig. "It's horrendous what the system puts people like my brother through."

Social Security Administration Announces 2008 Cost Of Living Adjustment

The Social Security Administration has announced the COLA for 2008. It will be 2.3%, down from the 3.3% COLA for 2007. The following information is from NOSSCR, and the chart below is from the Social Security Administration.

Title II beneficiaries will see the 2.3% increase effective with December benefit payments received in January 2008. SSI beneficiaries will see the increase in their January 2008 payments, received on December 31, 2007.

In 2008, the average monthly Title II benefit for disabled workers will be $1004, and for a disabled worker spouse and one or more children, the average monthly benefit will be $1690. The average benefit for a retired worker will be $1079.

Tax Rate	2007	2008
Employee	7.65%	7.65%
Self-Employed	15.30%	15.30%
NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare.  The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below).  The Medicare portion (HI) is 1.45% on all earnings.

Maximum Taxable Earnings:	2007	2008
Social Security (OASDI only)	$97,500	$102,000
Medicare (HI only)	No Limit

Quarter of Coverage:	2007	2008
	$1,000	$1,050

Retirement Earnings Test Exempt Amounts:	2007	2008
Under full retirement age NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.	$12,960/yr. ($1,080/mo.)	$13,560/yr. ($1,130/mo.)
The year an individual reaches full retirement age NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.	$34,440/yr. ($2,870/mo.)	$36,120/yr. ($3,010/mo.)
There is no limit on earnings beginning the month an individual attains full retirement age.

Social Security Disability Thresholds:		2007	2008
Substantial Gainful Activity (SGA)	Non-Blind	$  900/mo.	$  940/mo.
	Blind	$1,500/mo.	$1,570/mo.
Trial Work Period (TWP)		$  640/mo.	$  670/mo.

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age	2007	2008
	$2,116/mo.	$2,185/mo.

SSI Federal Payment Standard:	2007	2008
Individual	$ 623/mo.	$ 637/mo.
Couple	$ 934/mo.	$ 956/mo.

SSI Resources Limits:	2007	2008
Individual	$2,000	$2,000
Couple	$3,000	$3,000

SSI Student Exclusion Limits:	2007	2008
Monthly Limit	$1,510	$1,550
Annual Limit	$6,100	$6,240

Estimated Average Monthly Social Security Benefits Payable in January 2008:	Before 2.3% COLA	After 2.3% COLA
All Retired Workers	$1,055	$1,079
Aged Couple, Both Receiving Benefits	$1,722	$1,761
Widowed Mother and Two Children	$2,192	$2,243
Aged Widow(er) Alone	$1,017	$1,041
Disabled Worker, Spouse and One or More Children	$1,652	$1,690
All Disabled Workers	$  981	$1,004

Link of the Day - Social Security Administration Announces 2008 Cost Of Living Increases

The Social Security Administration has announced Social Security benefits cost of living increases for 2008. In the information pasted below, the first number in each instance is for 2007, and the second number is for 2008.

2008 SOCIAL SECURITY CHANGES

o Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2006 through the third quarter of 2007, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 2.3 percent COLA for 2008. Other important 2008 Social Security information is as follows:

2007 2008

o Tax Rate:

Employee 7.65% 7.65%

Self-Employed 15.30% 15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

o Maximum Taxable Earnings:

Social Security (OASDI only) $97,500 $102,000

Medicare (HI only) N o L i m i t

o Quarter of Coverage:

$1,000 $1,050

o Retirement Earnings Test Exempt Amounts:

Under full retirement age $12,960/yr. $13,560/yr.

($1,080/mo.) ($1,130/mo.)

NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

The year an individual reaches full $34,440/yr. $36,120/yr.

retirement age ($2,870/mo.) ($3,010/mo.)

NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.

There is no limit on earnings beginning the month an individual attains full retirement age.

o Social Security Disability Thresholds:

Substantial Gainful Activity (SGA)

Non-Blind $ 900/mo. $ 940/mo.

Blind $1,500/mo. $1,570/mo.

Trial Work Period (TWP) $ 640/mo. $ 670/mo.

o Maximum Social Security Benefit: $2,116/mo. $2,185/mo.

o SSI Federal Payment Standard:

Individual $623/mo. $637/mo.

Couple $934/mo. $956/mo. 

o SSI Resources Limits:

Individual $2,000 $2,000

Couple $3,000 $3,000 

o SSI Student Exclusion:

Monthly limit $1,510 $1,550

Annual limit $6,100 $6,240 

o Estimated Average Monthly Social Security Benefits Payable in January 2008:

All Retired Workers $1,055 $1,079

Aged Couple, Both Receiving Benefits $1,722 $1,761

Widowed Mother and Two Children $2,192 $2,243

Aged Widow(er) Alone $1,017 $1,041

Disabled Worker, Spouse and $1,652 $1,690

One or More Children

All Disabled Workers $ 981 $1,004

Link of the Day - Benefits Increase From Social Security Administration

The Social Security Administration provides a helpful page on their Web site that updates the amount a person can earn and still be available for disability benefits. This amount, for the various categories, changes each year because it has a cost of living factor built in to the calculations. Here is a statement from the Web site, which goes on to explain the basic 2007 monthly SGA amount is $900.

To be eligible for disability benefits, a person must be unable to engage in substantial gainful activity (SGA). A person who is earning more than a certain monthly amount (net of impairment-related work expenses) is ordinarily considered to be engaging in SGA. The amount of monthly earnings considered as SGA depends on the nature of a person's disability.

Link of the Day - Benefits Checkup Site

The National Council on Aging has a helpful site called Benefits Checkup that lets people search or sign up for for more than 250 different types of medical and retirement benefits. Here is a description from the site:

About BenefitsCheckUp

Many older people need help paying for prescription drugs, health care, utilities and other basic needs. Ironically, millions of older Americans — especially those with limited incomes — are eligible for but not receiving benefits from existing federal, state and local programs. Ranging from heating and energy assistance to prescription savings programs to income supplements, there are many public programs available to seniors in need if they only knew about them and how to apply for them.

Developed and maintained by The National Council on Aging (NCOA), BenefitsCheckUp is the nation's most comprehensive Web-based service to screen for benefits programs for seniors with limited income and resources.

BenefitsCheckUp includes more than 1,550 public and private benefits programs from all 50 states and the District of Columbia, such as:

• Prescription drugs
• Nutrition (including Food Stamps)
• Energy assistance
• Financial
• Legal
• Health care
• Social Security
• Housing
• In-home services
• Tax relief
• Transportation
• Educational assistance
• Employment
• Volunteer services

Since 2001, millions of people have used BenefitsCheckUp to find benefits programs that help them pay for prescription drugs, health care, rent, utilities, and other needs. For more information on BenefitsCheckUp, contact us at comments@benefitscheckup.org.