Supplemental Security Income (SSI) computation is cash based, rather than what accountants call accrual based. It's a needs based program so benefits are subject to reduction due to income received. Because it's cash based, it's the income you received at the time, rather than what was owed to you at the time. There's one big exception to this, the Windfall Offset. When a claimant is approved for back benefits for both SSI and a Title II Social Security disability benefit, usually Disability Insurance Benefits, the Windfall Offset is supposed to, in effect, reduce the SSI as if the Title II benefit had been paid at the time it was due, that is, for this one exception, to compute benefits based upon the accrual method.
On its face the Windfall Offset presents obvious difficulties for Social Security but along the way things became Byzantine. Reducing the SSI for the Windfall Offset presented a big potential problem at the time it was passed. If you apply the Windfall Offset to reduce SSI, you often wipe out all SSI benefits. This is a problem because those who are eligible for SSI are categorically eligible for Medicaid. Wipe out the SSI and you've wiped out the retroactive Medicaid entitlement as well. This actually doesn't matter that much for the claimant. They’re never going to be able to pay those bills anyway. However, it matters a lot to hospitals who may be on the hook for hundreds of thousands of dollars of care they've provided the claimant if that claimant doesn't get back Medicaid.
To prevent this Social Security decided to run the offset in the opposite direction. The Title II benefits are reduced by amount by which the SSI benefits should have been reduced if the Title II benefits were paid at the time due. That sounds complicated but throw in the fact that the field office computes the SSI and a Title II payment center computes the Title II benefit and you've got a much more complicated situation. The field office must compute the amount by which the SSI should have been reduced and communicate that fact to the Title II payment center. In case you don't know, Social Security's components aren't good at communicating with each other. The problems don't end there, though. For historic reasons I'm not going into here, the Title II attorney fee is based upon the amount of back benefits before the Windfall Offset. This means it's an artificial figure. That requires an adjustment in the SSI attorney fee so that fee is artificial as well. It's also complicated because the Windfall Offset is supposed to be based upon the amount of Title II benefits after the attorney fee and that's been difficult for Social Security to do. It's led to a couple of class action lawsuits and I'm not sure that Social Security is getting it right to this day. As I said, it's Byzantine.
Isn't it time to cut through this Gordian Knot? By now the vast majority of states have accepted the expansion of Medicaid benefits enacted during the Obama Administration. The rest can do so at any time. This means that the potential for hospitals and providers to be stuck with never being reimbursed for services they've provided is far, far less than it used to be. I say the hell with those benighted states that have refused Medicaid benefits for their low income citizens. Apply the Windfall Offset in a natural way. Reduce the SSI benefits rather than the Title II benefits. This dramatically simplifies Social Security's work. Probably hundreds of thousands of hours of unnecessary work at Social Security each year will end. As far as I'm concerned, the hospitals in the states that have refused the extra Medicaid can complain to their state legislatures rather than Social Security. The agency lacks the resources to protect those hospitals from the folly of their state governments.
To the best of my knowledge, what I'm suggesting doesn't require legislation or even a change in the regulations.
I understand that in theory this could delay first payment of benefits to a claimant from SSI but what I'm seeing now is that those approved for both SSI and a Title II benefit generally receive a monthly Title II payment first anyway. Do as I am suggesting and it's not just one month of benefits paid. It's all the back Title II benefits. That would be far better than the three or four month time frame it's taking Social Security to finish all the Windfall Offset computations in each case. Don't raise any tax issue. The population I'm talking about isn't going to pay taxes on their Social Security benefits anyway.
By the way, kudos to you if you have read my post about this tedious subject to the end. You're a Social Security pro. You may or may not agree with me but you know what I'm talking about. I wonder whether there are any Congressional staffers who get this far.
22 comments:
I dont think SSA should be in charge of SSI. SSA should stick to FICA tax work, Social Security and Medicare entitlement. SSI being funded by general funds of the US Treasury, it should be returned as block grants back to the states. The move in 1975 to put SSI under SSA was a huge mistake making universal guidelines that do not work in all regions of the US. Make welfare the business of the states.
My modest proposal is for attorneys to collect their own fees. Problem solved.
Agreed
9:53 Hear, Hear!
Basically 9:53 and 10:22 are folks who want the SSD program to fail outright as that is what will happen if attorney's fees weren't directly paid to attorneys. The agency does not and will not have the resources to request medical records for all claimants at the hearing level. To expect even 40% of clients to furnish their own medical records would be ridiculous. Then the denials start really ramping up to around 55-60% at hearing level then the public finds out how hard this program can really become to obtain benefits and they give up. Once they give up and apps fall, Congress then comes in and cuts funding as apps have fallen to all time lows.
This would solve so many issues. Just have the back money mailed to the rep. Take out however much you want and cut a check to your clients. Get rid of the fee cap, user fee, eliminates a bunch of whining and saves a lot of work for reps and the agency.
Anyone suggesting SSA not directly pay the attorney fees is focusing on the wrong issue. A lot of claimants cannot navigate getting the paperwork together and filling out forms on their own. Responding timely to requests. A lot of claimants probably have a shit ton of bills overdue by the time they get approved. Faced with necessity bills, possibly things in collection, etc. it’s doubtful most would choose to pay a newly due attorney fee bill first.
Somehow the comments got off course by those with anti-representative sentiments that have nothing to do with the issue of the SSI offset discussed in the post. I think Charles is right, the present system is too complicated with too many folks needing to be involved in the process. Aftr 30 years of being involved in these matters, I still struggle to explain the SSI offset to my clients in a way they will understand. During the past year I have seen mistake after mistake being made with all benefit processing. The less claims reps have to deal with, the less likely they will be to make mistakes and create additional work for themselves or someone else.
Can you give actual numbers of how this works. The SSA explanation, and frankly, all the explanations, sound like gibberish.
An explanation of how what works? The windfall offset process?
Actually, there is third option. Because SSI related Medicaid is a "yes" or "no" determination based upon even 1 dollar of SSI eligibility, the SSA could just determine if the claimants were eligible for SSI for each month passed (ignoring the Title II they would have gotten for that time period) and then determine "yes" or "no" Medicaid status for each past month. Then Medicaid could just be notified of the months of eligibility and pay the entitled bills. Then past-due benefits payments could be made to the claimant in the manner of Title II first and then SSI, if any is due after applying the offset. This way the Medicaid would still get paid and simplify the offset calculations.
Or, since Medicaid is state and SSI is federal, either give SSI back to the states so they have ALL the information or just don’t intertwine Medicaid and SSI and just help disabled and sick people because it’s the right thing to do.
Ahh, the Regan years, the 2nd worst president this country has ever had. Those damn welfare queens were getting a WINDFALL and dammit, that must be stopped, stopped I tell you!! Consequences and complexity, be damned - hey remember the GOP tendency to nibble away at benefits AND make people like Social Security just a little bit more. Win win. As someone there at the birth of Windfall Offset and how the T2 and T16 systems were gridlocked trying to calculate it, mortal people could usually do that calculation once. It was handling PE events that made it beyond messy. The key issue was trying to nail down the SSI record with all the changes and updates to LA and income etc before doing the offset. That first pass was "what would you have been paid if the T2 had been paid on time" and it worked. But then you'd find out they had too much income in a month and less income in another and now you had iterations of that baseline "what would be paid had it been paid on time". Nailing that down was a policy problem we had little guidance on then. Plus so many cases had T30s on them which killed any chance of automation. No black box systems fix possible because the T2 and T16 systems of the time didn't speak well to each other, couldn't handle "what if" scenarios and the use of negative numbers (or absolute values) just had issues. There were a few of us who figured out how to calculate it but it was decided those techniques were not "trainable" to folks not comfortable with complex math.
As for the BS about giving it back to the states, it got taken from the states because 30+ years of state administration showed what an utter failure that is and likely remains to this day. (Can you imagine this in Texas, where state employees admit they hate new folks coming to the state with disabled children applying for Medicaid and tolerate "native" Texans doing the same. Got experience with this, it's true...)
Lots of SSA employees had their noses out of joint with this new clientele and program and there was and likely still are many who'd love for SSI to disappear, regardless of where it went. That hasn't changed, because there are a lot of folks dealing with SSI at SSA who, when their guard is down, pretty much admit they hate these people and delight in using the rules as a hammer. (Some will say not true but it is, there used to be online places where employees could chat and it was obvious some folks needed new places to work as they hated what they did.)
Anyway, one could simplify this fast by actually having staff actually apply the T2 underpayment retroactively monthly to the T16 record as it is at the time the T2 is calculated, (don't waste time trying for a redet or similar record update, just use the record as it is), recalculate the past already paid SSI with eth monthly T2 included and for any resultant OP based on "receipt" of the T2, put them in a non-pay status that says offset was applied for those months (so Medicaid knows what months are impacted by this). With this impact on SSI calculated, then recoup the resultant SSI OP from the T2 underpayment at the PSC and pay the rest. Attorneys would get their fee calculated from that unreduced T2 underpayment. Then just deal with PE events on SSI per normal.
So the government claws back some money but doesn't waste 3x as much as they take in by administrative savings due to simplicity.
Yes, the calculations... actual math examples.
For a simple windfall, essentially, the way it works is that you can’t receive T16 for any past months that T2 would have made you ineligible.
To rectify this, the do the windfall. So, if the NH was paid SSI of $941.00 for 01/23 but had we paid the T2 on time they would have gotten $1200.00 from DIB that same month, the T2 will be “offset”. So the NH isn’t due $1200.00 for 01/23, they are due $259.00 ($1200 - $941).
That’s a very simple example. Multiply that time any overlapping months for the two benefits and you get idea. When it’s that simple, they’re easy. However, if you have multiple entitlements like Disabled widows benefits or Disabled adult children and multiple SSN’s it gets messy quickly.
But that’s a very, very simple example.
Wow.. I really didn't follow...and above example didn't really make it clear. But, wouldn't be much easier to pay if SSA simply didn't make people wait the 2 plus years in the first pace? By being eligble for SSI, doesn't that justify faster decisions?
But there is another issue as well. For the States that have general Assistance, there is reimbursement of the GA benefits paid but only out of SSI. If the SSI is not paid, because the Title II is greater as would be the case in the majority of cases, then there is also no reimbursement to the State for the GA.
In a few States, New Jersey for example, there there is reimbursement there is also possible payment out of the reimbursement for an attorney fee. If paid in both, that State Reimbursement can be sent to the client.
So, reversing the Order of payment could be great but there are still other issues that creates that would need to be addressed.
Wasn't SSI windfall offset passed in 1979, a bit before Reagan?
Ohio used to have the reimbursement but I haven’t seen one in probably a decade. I think the state must have abandoned that program.
I do not think that paying DIB first and SSI second helps. The problem is that you cannot know the amount of the attorney fee under either the fee petition or the fee agreement process until the amount of past due benefits is known. There is a very old SSR saying that in a concurrent case, the entire fee is considered as a fee for DIB representation. After a fee is approved, the amount of the windfall offset has to be redetermined so that DIB benefits paid to a rep are not counted as income to an SSI recipient.
That sounds awful like an offset lol
You guys are missing the boat. The real change that could eliminate a good portion of offsets from even being needed is to remove the 5 month waiting period for the DIB.
While they’re at it, remove the 24 month wait for Medicare.
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