From a recent report by Social Security's Office of Inspector General (OIG)(emphasis added):
Beneficiaries may elect to receive reduced retirement benefits as young as age 62. When beneficiaries begin receiving retirement benefits before full retirement age (FRA), the Social Security Administration (SSA) generally permanently reduces the payment amount based on the number of months before FRA they begin receiving payments.
When disability beneficiaries elect to receive reduced retirement benefits, the reduction is not permanent, as it is for non-disability beneficiaries. Specifically, for beneficiaries who (1) were entitled to both disability and retirement benefits and (2) elected to receive reduced retirement benefits, section 202(q)(7)(F) requires that SSA pay a higher benefit amount when the beneficiary reaches FRA.
From the Master Beneficiary Record, we identified 32,474 beneficiaries who, as of September 5, 2019, (1) had reached FRA, (2) had been entitled to disability benefits and elected to receive reduced retirement benefits, (3) were in current payment status, and (4) were entitled to a higher benefit amount at FRA. We reviewed a random sample of 100 beneficiaries from this population.
Section 202(q)(7)(F) of the Act gave a financial advantage to 89 of 100 beneficiaries in our sample. By electing reduced retirement benefits, they received higher payments than they would have had they continued receiving disability benefits. Of the 89 beneficiaries,
70 avoided a reduction because they were receiving workers’ compensation or public disability payments;
11 increased total payments for their families; and
8 avoided a reduction because they returned to work.
When they reached FRA, the Act provided them a financial advantage because it required that SSA remove the age-based reduction for any months the individual was entitled to both disability and reduced retirement benefits and begin paying higher retirement benefits.Because section 202(q)(7)(F) of the Act gave them an advantage, these 89 beneficiaries have already received approximately $1.8 million more in benefits since FRA. Further, 86 of the 89 beneficiaries will receive an estimated $2.4 million more in benefits because this advantage continues through the rest of their lives. We estimate this provision will result in approximately 29,000 beneficiaries receiving almost $1.4 billion in additional lifetime benefits.
We recommend SSA determine whether it should propose a change to section 202(q)(7)(F) of the Act to eliminate the financial advantage it gives to certain disability beneficiaries. SSA disagreed with our recommendation and deferred to Congress to determine whether a legislative change is necessary. ...
OIG didn't even bother to give a justification for asking for a legislative change. The fact that the provision in question helps some beneficiaries was enough for OIG.
In my opinion there is nothing about the provision that OIG objects to that is abusive or that results in unreasonable results or results that Congress didn't intend.
This OIG report apparently seemed out of bounds to Social Security. I agree with them. I don't think it's the job of OIG to second guess Congress.
This indicates that 70 of the hundred samples took the lower amount because of Workers Compensation or public Disability benefits. This is the RIB/DIB election. They take the RIB benefit because the WC offset only applies to disability benefits and not to retirement benefits.
ReplyDeleteFrankly, there is a lot to question with the Comp Offset provisions anyway and the fact that the SSA so often gets the calculation wrong. There is also the problem of exercising the RIB/DIB election and being properly advised of the choice by both SSA staff as well as representatives in both WC and SS.
And, there is not a clear reason why there even is this offset when other payment, for example PI settlements have no offset at all.
But, can someone explain why the other 30 of 100 would choose the reduced RIB benefit anyway. I did note that they said there were about 10 cases where the person received less benefits based on getting RIB and not DIB and that makes little sense either.
anon@7:40am,
ReplyDeleteThere are a few different reasons the other 30 cases probably selected RIB over DIB.
First, there are a certain number of individuals who benefit from the higher work limits of reduced RIB versus DIB's TWP/EPE rules. Most times, these individuals work until the end of their trial work period, then elect reduced RIB during the extended period of eligibility. They retain the right to switch back to DIB at any point as well as protections like Expedited Reinstatement (which is pretty much guaranteed to be successful for anyone over age 62).
For the others (the vast majority of them, anyway), it is usually a family maximum issue. RIB has a much higher family maximum benefit than does DIB. If they have an eligible spouse or young/disabled children, even if the wage earner receives lower RIB benefits the total family benefit payable will be higher than it would be on DIB due to the higher RIB maximum.
And, finally, there are a very few proud individuals who feel stigmatized by being classified as "disabled". These folks will insist on switching to RIB simply for that reason, even if they end up with less money because of it.
That report was clearly prepared by some of Trump's supporters to attempt to further piss on the disabled.
ReplyDeleteHad Trump won the election, there is little doubt in my mind that Saul would have recommended exactly that change to Congress at some point within the first 12 months of his 2nd term.