Biden Plan For Social Security Disability

      From Joe Biden's plan for people with disabilities:

PROTECT AND STRENGTHEN ECONOMIC SECURITY FOR PEOPLE WITH DISABILITIES

The Trump Administration has systematically attacked the Social Security disability programs—from proposing monitoring people with disabilities through social media in order to cancel their benefits, including their health care, to tightening eligibility through a proposal to  redefine the number of hours in a work week so some applicants do not receive benefits. The National Council on Disability found that “people with disabilities live in poverty at more than twice the rate of people without disabilities.” To protect the economic security of people with disabilities and increase employment opportunities, Biden will take a holistic approach to Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Medicaid, and other programs to support people with disabilities. He will: 

• Increase the benefit level for people receiving SSI. Biden will set a federal benefit rate of at least 100% of the poverty level. 
• Eliminate the five-month waiting period for SSDI and two-year waiting period for Medicare. Biden will work to pass legislation to ensure working people who develop a condition or disability are able to get their Social Security support as well as their Medicare benefits as soon as they qualify. 
• Eliminate the “benefit cliff” for SSDI. Earnings limits under SSDI can discourage people with disabilities from engaging in employment or internship opportunities when they depend on SSDI funds. Biden will increase this limit and phase out this benefit gradually so people with disabilities don’t have to choose between employment and health care. 
• Reform the SSI program so that it doesn’t limit beneficiaries’ freedom to marry, save, or live where they choose. Biden will work with Congress and the disability community to eliminate the SSI marriage penalty and “in-kind support and maintenance” provision and raise the asset limits associated with SSI that have not been increased since 1984. 
• Expand access to tax-advantaged savings accounts, ABLE accounts, which provide people with disabilities a way to pay for “qualified disability-related expenses, such as education, housing and transportation.” Biden will work to pass the ABLE Age Adjustment Act, which will make ABLE accounts available to 6 million additional adults with disabilities, including 1 million veterans. 
• Reverse damage done to Social Security rules by the Trump Administration. President Trump announced that he wants to change the Social Security rules for people who get disability benefits, including SSI and SSDI. His proposed change would require many to re-verify their disability every two years, a tough enough process to get through once, targeting adults with disabilities who are close to retirement, children with disabilities, and people with certain medical conditions including cancer and behavioral disorders. If approved by the Trump Administration, Biden will rescind this harmful proposal.
• Strengthen the Social Security Administration. Ensuring that Social Security benefits are easy to access and that field offices and teleservice centers are fully funded is key to our bedrock commitment to seniors and people with disabilities. Cutting Social Security services will only hurt the most vulnerable in our communities. Biden will provide sufficient resources for staffing needs to meet the needs of beneficiaries today and into the future.

SSI Income And Resources Rules Need Fixing And ABLE Isn't The Solution

     From Robert Farrington, writing for the Washington Post:

Living with a disability comes with all kinds of challenges, but the financial impact of being unable to work can be absolutely devastating. Imagine not being able to support yourself due to your disability, but also not being able to save money so you can continue qualifying for government aid including Supplemental Security Income (SSI).

To qualify for SSI, your countable resources must not be worth more than $2,000 for an individual or $3,000 for a couple. No matter how you cut it, that’s not very much.

This situation creates a kind of forced poverty for many individuals with a disability and the family members who care for them. But many experts say that the 529 ABLE Account, which was first introduced in 2014, can help curb this ongoing problem. ...

Contribution limits are extremely generous. With a 529 ABLE Account, individuals with disabilities are able to save up to $15,000 per year in 2019. On top of that, a designated beneficiary who works can contribute their income up to the poverty line for a one-person household, notes the IRS. ...

     SSI income and resources rules are barbaric so we create a loophole so the well to do can help their disabled family members. I've got a better idea. Why don't we just make the SSI income and resource rules less barbaric so every family can benefit! I think the illustration that the Post picked for this column -- a pretty blonde girl who's a double amputee -- pretty much sums up what's going on with ABLE.

There's Also The Problem That They May Not Have The Money To Put Away

     From the New York Times:

New state-based accounts that let disabled people work and save money without risking the loss of government aid are slowly catching on. But advocates say millions more people with disabilities could be taking advantage of the accounts.

Forty-one states and Washington, D.C., now offer the accounts, which first became available in 2016. The tax-free accounts, known as ABLE accounts, are named after the Achieving a Better Life Experience Act, the 2014 law that created them. ...

But just a tiny fraction of people eligible for the accounts are using them so far.

More than 40,000 ABLE accounts were open by the end of March, with combined balances of about $225 million, said Michael Morris, executive director of the National Disability Institute, a nonprofit advocacy group. But the institute estimates that as many as eight million people are eligible under current rules, which limit the accounts to people who became disabled before age 26. ...

Part of the challenge in fostering more growth is that ABLE accounts have nuanced rules, and states have limited budgets to promote the accounts, said JJ Hanley, director of the Illinois ABLE program. When people do hear about the accounts, she said, they are often skeptical that opening one truly won’t jeopardize their benefits. ...

     ABLE was always about helping well to do parents put away money to help their disabled offspring without jeopardizing their SSI and Medicaid. Most families just don't have the money to put away and there's little to be done about that.
     My thought all along is that ABLE is OK but that we need reforms to remove some of the harshness in the SSI and Medicaid income and resources rules. That would help far, far more people and is long overdue. ABLE targeted a small amount of relief from these rules at a few relatively well off people while ignoring the large number of people who suffer under antiquated income and resource limits.

New ABLE Account Instructions

     The Social Security Administration has updated the staff instructions in its POMS manual for Achieving a Better Life Experience (ABLE) accounts. These accounts allow the sheltering of money which would otherwise render a person ineligible for Supplement Security Income (SSI). 

     I cannot evaluate the significance of these new instructions since I haven't been involved in ABLE issues. 

     I'm glad the ABLE accounts exist but they're a sop to people who have money and want to help their disabled relatives get around the ridiculously stringent SSI resource limits. Most disabled people don't have relatives who can help them in this way. What's urgently needed are updated resource and income limitations for everyone on SSI. The SSI resource and income limitations contain no cost of living adjustment and haven't been updated since they were created in the 1970s. They're brutal. I know those who supported ABLE accounts also supported income and resource updates. I can't fault their decision that it was better to take ABLE than to get nothing but ABLE isn't nearly enough. When the time finally comes again when Democrats control Congress, an SSI update has to be very near the top of the entire Democratic agenda. There is no other issue in the Social Security world, apart from the agency's operating budget, that's anywhere near as important as an SSI update.

IRS Proposes ABLE Regulations

     The Internal Revenue Service has issued a Notice of Proposed Rule-Making (NPRM) on ABLE accounts. ABLE accounts will allow contributions to accounts to help disabled individuals drawing Supplemental Security Income, which is administered by the Social Security Administration. These regulations as well as new state statutes are needed so that ABLE accounts can be established.

Some Info On ABLE Accounts

     The Social Security Administration has released the following set of questions and answers to help its staff in dealing with inquiries about the new ABLE accounts:

A. Purpose of this EM [Emergency Message]

This EM provides important information regarding the Achieving a Better Life Experience (ABLE) Act (P.L. 113-295) and ABLE accounts. Specific guidance on how to treat ABLE accounts for Supplemental Security Income (SSI) income and resources purposes will follow in future instructions.

B. Background

On December 19, 2014, the President signed into law the ABLE Act. The ABLE Act was established to encourage and assist individuals and families with saving funds for the purpose of helping individuals with disabilities to maintain health, independence, and quality of life. Qualified ABLE programs will provide secure funding for disability-related expenses for qualified individuals with disabilities that will supplement, but not replace, benefits provided through private insurance, Medicaid, SSI, the individual’s employment, and other sources.

C. Information regarding ABLE accounts

1. What is an ABLE account?

An ABLE account is a tax-advantaged account, similar to a Section 529 qualified tuition program (QTP). ABLE accounts are administered by the State in which the individual resides and they must be established for the benefit of the individual. The designated beneficiary is also the owner of the account.

2. Who is eligible for an ABLE account?

To be eligible for an ABLE account, a person must be blind or disabled according to the Social Security definition of disability by a condition or conditions that began before age 26. Eligible individuals are limited to one ABLE account.

3. What is the maximum contribution for ABLE accounts?

Generally, ABLE accounts may not receive aggregate contributions during a taxable year in excess of the annual gift tax exemption (which is $14,000 for 2015). Each State will set a maximum balance for ABLE accounts.

4. Will ABLE account balances count towards the SSI statutory resource limit?

For SSI purposes, we will exclude as a resource the first $100,000 in an ABLE account.

5. What happens if an SSI recipient has excess resources held in an ABLE account?

If an individual is ineligible due to excess resources held in an ABLE account, we will suspend the SSI benefits without a time limit, but not terminate the benefits. The SSI recipient would remain eligible for Medicaid while in suspense.

6. Are ABLE accounts transferrable?

ABLE accounts are transferrable to family members who are also qualified individuals.

7. What distributions are allowed from ABLE accounts and what is their impact on SSI benefits?

Some qualifying distributions are education, housing, transportation, employment support, assistive technology, health and wellness. Qualifying distributions from the ABLE account would not generally affect SSI eligibility or payment amount. Distributions from an ABLE account for the purpose of housing expenses will be countable income for SSI purposes.

8. What happens upon the death of an ABLE account beneficiary?

Subject to certain outstanding debts, the State can file a claim against the ABLE account for reimbursement of any medical assistance paid on behalf of the account beneficiary after establishment of the ABLE account.

9. When will there be POMS instructions on ABLE accounts?

The Department of the Treasury will publish regulations early this summer and many States will have to pass legislation to establish the ABLE account program. After we receive more guidance from Treasury, we will issue specific instructions on how to treat ABLE accounts for income and resources purposes.

10. What should we tell the public if they ask how to establish an ABLE account?

ABLE accounts must be established under a program established and maintained by the individual’s State of residence. Refer individuals to their State Comptroller or Tax Office for questions concerning ABLE accounts.

Direct all program–related and technical questions to your RO [Regional Office] support staff or PSC [Program Service Center] OA [? This acronym isn't even on Social Security's own list of its own acronyms!] staff. RO support staff or PSC OA staff may refer questions or problems to their Central Office.

ABLE Act Approved By Congress

     The Senate approved the ABLE Act last night and sent it to the President. Here's a description of ABLE:

Modeled after tax-free college savings accounts, the ABLE bill would amend the federal tax code to allow states to establish the program.

To qualify, a person would have to be diagnosed by age 26 with a disability that results in "marked and severe functional limitations"; those who are already receiving Social Security disability benefits would also qualify. Families would be able to set up tax-free accounts at financial institutions, depositing up to $14,000 annually to pay for long-term needs such as education, transportation and health care.

The contributions would be in after-tax dollars but earnings would grow tax-free.

The ABLE accounts would be able to accrue up to $100,000 in savings without the person losing eligibility for government aid such as Social Security; currently, the asset limit is $2,000. Medicaid coverage would continue no matter how much money is deposited in the accounts.

Controversial Pay-Fors In ABLE

     Support has been growing in Congress for the ABLE Act of 2014 (H.R. 647). ABLE stands for Achieving a Better Life Experience. Under ABLE, individuals receiving Supplemental Security Income (SSI) and Medicaid could establish tax favored accounts to cover qualified expenses for medical care, housing and transportation. The accounts would not count against SSI and Medicaid resource limits. There is a chance that ABLE will become law this year.

     The ABLE bill, apart from its "pay-fors", is certainly worthy of passage. However, I would prefer that ABLE be a part of a comprehensive effort to update the income and resource provisions of SSI and Medicaid. I'm not sure about Medicaid but the SSI income and resources provisions in SSI haven't been updated since SSI became law more than 40 years ago. They are ridiculously out of date. As it stands, ABLE is primarily a bill to help the disabled children of middle class and wealthy parents. Those parents could use ABLE accounts to transfer funds to their disabled children. Those who are on SSI and Medicaid seldom have the ability on their own to accumulate assets in an ABLE account.

     The big problem with ABLE is that it would cost money and the House of Representatives is proposing "pay-fors" that would:

• Eliminate the percentage and dollar cap on the user fee that those representing Social Security claimants pay for processing direct payment of fees for representing Social Security claimants.
• End the Single Decisionmaker pilot currently used in twenty states.
• End the Reconsideration elimination pilot currently used in ten states.

     Ending the single decisionmaker and reconsideration elimination pilots would make it more difficult to be approved for disability benefits in the affected states. I don't think there is any substantive opposition to those pilots. Instead of eliminating them, they should be extended to all states. Why should ABLE be used to help middle class and wealthy families at the expense of disability claimants generally?

     Eliminating the percentage and dollar caps on the user fee is a big deal. Already, attorneys and others pay hefty fees to Social Security for the processing of their fees. This would increase those fees to preposterous levels that bear no relationship to Social Security's actual costs. Why would it cost Social Security almost $400 to compute 25% of a claimant's back benefits and authorize a direct deposit?
     I will write more about this later but those who represent Social Security claimants are already under considerable economic stress. Although no statistics have been released, it seems clear to me that fewer claimants are represented now than was the case a few years ago. Representing Social Security claimants is a high overhead, low profit margin business. Reducing the gross income of those who represent Social Security claimants by, perhaps 5%, would reduce their net income by a much higher percentage. Should ABLE be adopted with the elimination of the user fee caps, I expect a downward spiral of Social Security representation. At some point, it's just not worth it any more and we're rapidly approaching that point even without this proposal.
     The "pay-for" in the current House proposal will undoubtedly generate some opposition in the Senate which would endanger ABLE. As difficult as it is to pass any legislation in Washington, I would have thought that House Republicans would have tried harder to find less controversial "pay-fors" assuming they really want to pass ABLE. There aren't many legislative days left in this Congress. It may not take much of a dispute to kill ABLE in this Congress.