Feb 16, 2009

$250 Economic Stimulus Payment Questions And Answers

Here are some questions and answers that I have prepared about the $250 stimulus payments under the American Recovery and Reinvestment Act (ARRA):
  • Who is eligible? Anyone who was entitled to Supplemental Security Income (SSI) or to any of the following Social Security benefits at any time during the period November 2008 to January 2009: retirement, wife's and husband's, disabled adult child (but not other child's benefits), widow's and widower's, mother's or fathers', parent's, disability insurance benefits, special age 72 benefits. Note that my answer relates only to eligibility based upon Social Security entitlement. There is also eligibility based upon receiving VA or Railroad Retirement benefits.
  • Update: Are children eligible for $250 payments? I thought that I had already made this clear, but I keep getting questions about it, so let me be very specific. Children only qualify if they are on SSI or if they are receiving disabled adult child benefits. Only children who are receiving benefits because they are disabled are eligible for the $250 payments. Generally, children do not qualify for the $250 payments.
  • Update: Do I have to do something to get the $250 payment? No. It is supposed to come automatically.
  • Does the payment to Social Security beneficiaries come out of the Social Security trust funds? No. The Act says that these payments come out of appropriated funds.
  • Will the payments be made to people living outside the U.S.? No. The Act limits it to those whose listed residence is in the U.S. or a U.S. territory.
  • Will I be taxed on this income? Not by the federal government.
  • Can my $250 payment be seized for payment of my debts? Generally no, but it could be seized for a federal tax debt or a child support obligation to the same extent that Social Security benefits could be seized. I think it could be seized for a debt owed the Social Security Administration or for another federal debt, such as a student loan, but I would have to study it more to be certain.
  • Will an individual who is entitled to two benefits, such as Social Security and SSI, get two checks for $250? No, but avoiding this will be a challenge for the computer systems at Social Security and the other agencies involved. Mistakes, even a lot of them, would not surprise me. The databases were not set up with the idea of administering this program.
  • Can more than one $250 payment be made on a Social Security number? Yes.
  • Can more than one $250 payment be made to a household? Yes.
  • When will the checks or direct deposits be issued? As soon as the Treasury can do it, but no later than 120 days after enactment. If President Obama signs the bill on Tuesday, February 17 as planned, the deadline for payment would be June 17. Update: Social Security hopes to get the payments out by late May.
  • I am applying for benefits for the time period November 2008 to January 2009 but I have not yet gotten the benefits yet. Once I get approved for these benefits, do I get the $250 payment? Yes, but there is a time limit on this. No payment can be made after December 31, 2010.
  • I am on SSI. Does the $250 count as income which would reduce my SSI benefits? No and it will not affect your Medicaid or Food Stamps or other federally funded needs based benefits either.
  • I am an attorney who represents Social Security claimants. My fee is one-quarter of my clients' back benefits. Some of them will receive a $250 payment as back benefits. Will I receive a quarter of the $250 payment? Probably not. Update: I had earlier thought that the problem of claimants dying before receiving payment was an argument in favor of these payments being treated as a Social Security benefit subject to attorney fee withholding, since the Social Security Act has rules which are convenient to the agency on how payments to decedents are handled, but this Act actually forbids payment to those who die before receiving payment. That does not completely solve the problem of people dying before receiving their money but it does greatly limit the problem -- and Social Security may be able to offload the remaining problem to the Department of the Treasury anyway. Probably, they will not treat these benefits as being subject to attorney fee withholding since the Social Security Act limits withholding to benefits paid under the Social Security Act. 42 USC §406(a)(4). The ARRA does not amend the Social Security Act, so the benefit payments are not made under the Social Security Act. It may be easy for Social Security's Office of General Counsel to say this, but it may be considerably more difficult for Social Security's payment centers to implement it in this way.
  • Will computing and authorizing these payments and dealing with questions from the public relating to them cause problems for an understaffed Social Security Administration? My guess, or perhaps hope, is that this will not be too hard for Social Security. The Act is fairly simple and Social Security is getting a $90 million appropriation for administering it. The holdup might be Social Security's computer system. They did do something like this last year without much of a problem, but this is still going to be a challenge. Avoiding double payments may be the hardest part and that problem goes beyond Social Security, since the Department of Veterans Affairs and the Railroad Retirement Board are also involved.

22 comments:

Anonymous said...

Are you kidding on that last one--we fully expect to be swamped with phone calls, as well as additional walk-ins when the phone are jammed, from people wanting to know when their checks are coming. This will divert resources, causing additional delays in processing legitimate benefits. I can't imagine what the $ 90 mil is for--we cannot hire additional people just to answer the phones over the next four months. We have to suck it up with the staff we have.

Anonymous said...

What if someone becomes ineligible for SSI effective March 1st, do they still get the payment?

Anonymous said...

Does the payment to Social Security beneficiaries come out of the Social Security trust funds?

No, it comes out of the other big pile of money the government is hiding. LOL

Will computing and authorizing these payments and dealing with questions from the public relating to them cause problems for an understaffed Social Security Administration?

I assume just as they did with the other stimulus payment last year there will be a special number to call. Might even use the same number IRS has set up.

I am an attorney who represents Social Security claimants. My fee is one-quarter of my clients' back benefits. Some of them will receive a $250 payment as back benefits. Will I receive a quarter of the $250 payment?

You bunch of blood suckers. To even ask that just goes to show that attorneys are the lowest form of life.

Anonymous said...

Last year the payments were not automatic, those who wanted it had to file a special tax return. SSA fielded millions of phone calls but referred them to the IRS because IRS issued the payments. Your article seems to infer that this year IRS will pay SSA to issue the payments, but it is definitely not clear.

Anonymous said...

"Your article seems to infer that this year IRS will pay SSA to issue the payments."

SSA doesn't even issue regular Social Security payment, they come from the Treasury. SSA just tells them who to pay. So I would assume SSA will only provide the info of who is eligible to the Treasury if anything.

Anonymous said...

I receive ssi and owe a student loan from 1990 do you think that I will receive the 250 or will the seize it!

Anonymous said...

We're gonna take the $250.00, and your little dog, too!(Unless the attorney gets it first)

Anonymous said...

Can my $250 payment be seized for payment of my debts? Generally no, but it could be seized for a federal tax debt or a child support obligation to the same extent that Social Security benefits could be seized. I think it could be seized for a debt owed the Social Security Administration or for another federal debt, such as a student loan, but I would have to study it more to be certain.

Doesn't this section:
(4) PAYMENTS SUBJECT TO OFFSET.—Notwithstanding paragraph (3), for purposes of section 3716 of title 31, United States Code, any payment made under this section shall not be considered a benefit payment or cash benefit made under the applicable program described in subparagraph (B) or(C) of subsection (a)(1) and all amounts paid shall be subject to offset to collect delinquent debts.

contradict your answer?

Anonymous said...

I am an attorney who represents Social Security claimants. My fee is one-quarter of my clients' back benefits. Some of them will receive a $250 payment as back benefits. Will I receive a quarter of the $250 payment? Not clear. If you are reading this at the Office of General Counsel, do not be quick to say that these payments are not Social Security benefits. If these payments are not Social Security benefits, what is Social Security going to do about payments when the person entitled to the money dies before receiving payment? The Social Security Act provides a convenient solution for the problem of underpayments to decedents. If these are not Social Security benfits, someone is going to have to create a separate process for making the stimulus payments for decedents. My back of the envelope calculations suggest that there will be hundreds of thousands of people entitled to these $250 payments who die before they can be paid. This is not be a minor matter.

What is SSA (or RRB or the VA) going to do about payments to decedents? How about:

(4) LIMITATION.—A payment under this section shall not be made— (page 386 - lines 6-7)

(D) in the case of any individual whose date of death occurs before the date on which the individual is certified under subsection (b) to receive a payment under this section. (page 387, lines 8-11)

This should cover almost all cases - the only cases not clearly covered are those in which someone dies in between the day on which they are certified eligible to receive this payment, and the day on which Treasury tries to make the payment - which, depending on how they implement it could be the same day.

Anonymous said...

I think you already answered this, but to clarify:

I receive SS disability as do my 3 children (from my disability). Will my 3 kids also receive the payment? (It looks like no, but I've read this question elsewhere on the Internet and a few of us are confused)-thank you.

Anonymous said...

My four children receive survivor benefits since their father's death in 2000. Are they entitled? Also, one of the childen is legally and permanently disabled. Does this pose an issue?

Anonymous said...

Chidren do NOT get the benefit. It was stated here twice. Please read. No stimulus payment from SS to children. Only adults.

Anonymous said...

Let me amend the above comment. DISABLED children on SSI get benefits. NOT children that are drawing benefits due to their parents disability or other types of benefits. Only disabled children on SSI.
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Update: Are children eligible for $250 payments? I thought that I had already made this clear, but I keep getting questions about it, so let me be very specific. Children only qualify if they are on SSI or if they are receiving disabled adult child benefits. Only children who are receiving benefits because they are disabled are eligible for the $250 payments. Generally, children do not qualify for the $250 payments

Anonymous said...

You've just had a small taste of the endless questions we will get repeatedly in field offices and the 800#. Little to no impact - think again!

Anonymous said...

You've just had a small taste of the endless questions we will get repeatedly in field offices and the 800#.

They will come out with an EM sooner or later with talking points. This will be less involved that last year's payment, since you don't need to file taxes, so no questions about needing an SSA-1099 I bet most people will be referred to some 800#. Probably, the same number IRS already set up for the other stimulus payment.

About the only questions I can see SSA employees needing to answer are the payments income or resource for SSI or affect the Part D subsidy.

When and how you get it will not be questions SSA employees need to answer.

Anonymous said...

No,No,No--people will call SSA because that is what they always do. The fact that they have inappropriate questions does not stop them from calling. The phone does not screen out the callers--they will call, and call, and call, and ask, and ask, and ask.

Anonymous said...

To the bitter person complaining about all the calls to the SSA why don't you just quit your job if you don't want to answer the calls, I am sure out of the hundreds of thousands of people losing their jobs would be glad to get your cushy one!

Anonymous said...

I found this on the SSA website about the special onetime payments!
(Would provide that the special payment shall not be considered gross income for income tax purposes and that the payments are protected by the assignment and garnishment provisions of the four Federal benefit programs. However, the Department of Treasury could reduce the special payment to offset an existing delinquent Federal debt.) SO does this mean that they could take some of the 250 if owe federal debt or they will take it all!

Anonymous said...

If someone 65+ is collecting "regular" social security but still working, will they be eligible for both the $250 SS stimulus and the tax rebate ($400/individual-800/couple) for workers?

Anonymous said...

"No,No,No--people will call SSA because that is what they always do. The fact that they have inappropriate questions does not stop them from calling. The phone does not screen out the callers--they will call, and call, and call, and ask, and ask, and ask."

When I was on the 800# I could only take one call at a time and if it isn't a Stimulus question, it will be some other dumb question.

Anonymous said...

"To the bitter person complaining about all the calls to the SSA why don't you just quit your job if you don't want to answer the calls, I am sure out of the hundreds of thousands of people losing their jobs would be glad to get your cushy one!"

Having been there done that, you need to give that job a try. I rather pick trash in the parking lot than to be on that 800# phone again.

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