Mar 6, 2014

Should The Government Be Double-Dipping?

     A high percentage of people who apply for Disability Insurance Benefits under Title II of the Social Security Act also apply for disability benefits under Supplemental Security Income (SSI). SSI benefits are already reduced for the receipt of unemployment insurance benefits. Would it be appropriate to offset the Title II and the SSI benefits for the receipt of the same unemployment insurance benefits? Wouldn't this be, dare I say it, double dipping by the government? If the government isn't allowed to double dip, aren't the estimates offered by Social Security's Actuary off considerably?
     If Social Security has to figure out a way to avoid double dipping, which isn't going to be easy, don't the implementation costs become substantial? The SSI reduction for unemployment benefits isn't necessarily dollar for dollar. There's no point trying to explain it here because it's complicated but usually, not all the unemployment benefits will be offset in computing SSI, just most of them. I think the Actuary needs to take another look at this and assume that there will be no double offset and to try to compute in the costs of administering an offset for unemployment benefits.
     Don't blow off the costs of implementation as a factor in this. Some years ago, in order to save money, Congress forced Social Security to pay out larger amounts of back SSI benefits in up to three installments. I think everyone who knows anything about SSI knows that this provision has cost far more money to implement than it ever saved. An unemployment insurance offset could be at least as complicated to administer as the windfall offset which I wouldn't dare to try to explain here. Can anybody at Social Security tell us how much it costs to administer the windfall offset? I'm just guessing but maybe a quarter of a billion to a half billion per year but, seriously, can anyone tell us?


Anonymous said...

What about the costs involved with paying attorney fees? If attorneys had to collect from their clients, think of how much money that could save.

Anonymous said...

@12:42 We have been paying for SSA to withhold the attorney fees for awhile now. Nice try

Anonymous said...

I would gladly see SSA give up the $89 admin fee and let representatives collect from their clients, especially trying to justify some of the back pay amounts when the representative's contribution has been minimal.

*And yes, the quality of representatives varies considerably. I know some representatives that earn every penny and some who deserve only a pittance because of how little they actually do.

Anonymous said...

I challenge any attorney to collect their fees for the $89 that they currently pay to SSA.

A large portion of your clients simply wouldn't pay. That $89 is actually a VERY cheap way to ensure that you get paid. You can complain about it all you want, but you know it's better than the alternative.

Anonymous said...

The installment payments for the back pay were driven by recipient and payee abuse in spending the money without any constraints on expensive trips, cars, booze and drugs...not to save administrative costs.

Anonymous said...

Why not simplify the entire matter and do as insurance companies do in Workers Comp and PI cases--issue one check with the name of the recipient AND the attorney. It goes into the sacred client trust account. If the claimant has any dispute regarding the fee, the state bars have procedures such as mediation to settle the dispute. State bars watch trust accounts like hawks. Many of us get the impression that SSA hasn't done this to justify numerous jobs for gov't. workers.

Anonymous said...


If such a commonsense scenario was in place, how would non-attorney "representatives" be paid? Binder and Binder would have to revert back to being a law firm!

Anonymous said...

SSA offset for government pension and offset (really recompute under statue) for the windfall elimination provision. You really need to make a constitutional argument for not being allowed to consider unemployment compensation choice instead of playing to the masses Chuckie.

Anonymous said...

To begin, I began working a an SSI claims rep in 1979 and an SSI technical expert in 2002 and started computing windfall offset in 1981 when the law began.

The administrative costs of windfall offset? No clue, just as I have no clue of the administrative costs of paying an SSDI claim or an SSI claim. If I were to hazard a guess about the amount of employee time spent on windfall offset per case would be as low as 0% to maybe 1 1/2% in most cases and possibly 4-5% every once in awhile. It is true that any case with manual computations required take longer than those with automated computations. And the windfall offset inputs are some of the more complex actions that have to be taken by SSI claims reps, but so are manual payment comps and adjustments to overpayment sequences. So often, only a one or two employees in an office have expertise. And, if manual actions have to be taken, it adds a delay to release of past due benefits because the case goes into another backlog list.

But the administrative costs are miniscule compared to the additional program costs that would result if there was no windfall offset. Back when we had the SDW cadre, SSA was reopening T2 claims back 5, 10, 20, 30 years based on an SSI protective filing date and past due benefits were pretty much always in the tens of thousands of dollars and frequently in the 100's of thousands of dollars. All because the SSI protected the filing date.

Without windfall offset, someone could be paid $721 a month for 2014 in SSI and $1000 a month in SSDI for the same months, giving a 'windfall' bonus of getting paid a whole bunch more money retroactively than they would have been paid if they were paid on time. And you think that is a better idea. I do not.

And with the backing out of attorney fees out of the offset computation, there can be many cases that paying the SSI claim means extra money to pay the attorney fees. Not always, but sometimes.

Anonymous said...

Part 2 - Guess I have a lot to say

Then the bizarre legislation called installment payments to prevent SSI recipients from being foolish; SSA playing Big Brother. So this SSI recipient can handle $2100 now, $2100 in six months and $20,000 in 12 months. Who in the world thinks that makes any sense?? At least when the original legislation about installments came (back in 1996), the first and second installment was for 12 months of benefits, not this stupid 3 month limitation on the first installment that is now being enforced. And isn't it some kind of SSI bias to believe that only SSI recipients need the care and protection of the US government so they don't go willy nilly with their lump sums? Really? All SSDI recipients are inherently better equipped? Awfully presumptuous of us but I guess SSI recipients are not yet a protected class so they can be discriminated against. And this from a person who has been talking to SSI recipients for 30 years.

SSA already applies worker's compensation and public disability benefit offset to SSDI and uses the same funds to reduce the SSI. The formulas are not the same, but the same money is already used as 'double dipping' as you say. Now I do agree that it is not necessarily a contradiction to state that a person is ready, willing and able to work at a job that they can do and still be unable to perform in substantial gainful activity, and the disability decision takes so long to get that all but the richest have some kind of financial challenge when they can't work any more. I also think there are lots of people who milk the UIB system when they don't even try to get jobs or only work for cash.

UIB and W/C both pretty much reduce SSI dollar for dollar except for the first $20 of other income. Not a complicated formula, except the occasional retrospective monthly accounting transitional cycle.

These are my observations and I have a few ideas about simplification (mostly getting rid of couple computations and in-kind income and cash for children) but getting rid of windfall offset would lead to much much much higher program costs and only maybe a few bucks in administrative costs.