3.6% COLA

A press release from Social Security:

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced today.

The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012.  Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.

Some other changes that take effect in January of each year are based on the increase in average wages.  Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800.  Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum. 

Information about Medicare changes for 2012, when announced, will be available at www.Medicare.gov.  For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums. 

The Social Security Act provides for how the COLA is calculated.  To read more, please visit www.socialsecurity.gov/cola. 

A separate fact sheet shows the maximum wage covered by FICA going up from $106,800 to $110,100, the amount required for a quarter of coverage going up from $1,120 to $1,130, the under full retirement age earnings cap going up from $14,160 to $14,640, the SGA amount going up from $1,000 to $1010 per month and the SSI federal payment amount going up from $674 per month to $698 per month

The Horror In Philadelphia

From the Associated Press:

Authorities in at least two states missed opportunities to help four mentally disabled adults who were discovered locked in a squalid Philadelphia basement while police say a convicted murderer stole their Social Security checks.

Linda Weston, the woman charged with orchestrating the scheme, was legally disqualified from cashing the victims' government disability checks because of her criminal past. ...

Weston, 51, was charged Monday with kidnapping, false imprisonment and other offenses after her landlord stumbled on the four adults, all weak and malnourished, in a dank, foul-smelling boiler room over the weekend. Her bail was set at $2.5 million.

Also charged were Gregory Thomas, 47, whom Weston described as her boyfriend, and Eddie "the Rev. Ed" Wright, 50. ...

Social Security spokesman Mark Hinkle declined to provide details of the agency's investigation into Weston but said the agency recently strengthened oversight of payees.

"We are very concerned about this situation," Hinkle said via email.

What Does Disability Look Like To Senator Coburn?

     From the Washington Times:

The California man who lives part of his life as an “adult baby” and collects Social Security disability payments says the federal agency has cleared him of wrongdoing and will continue sending checks.


Stanley Thornton Jr. now wants an apology from Sen. Tom Coburn, the Oklahoma Republican who called for the benefit review because the investigation disrupted the final months of life for his roommate Sandra Dias, who playacted as his mother, spoon-feeding him and helping him into his baby clothes until her death in July.

John Hart, a spokesman for Mr. Coburn, said Tuesday that the senator, who is also a medical doctor, is still puzzled by how “a grown man who is able to design and build adult-sized baby furniture is eligible for disability benefits.”

“Yet, the problem is not with Mr. Thornton, per se, but with the politicians and bureaucrats who have coddled him,” Mr. Hart said. “Disability fraud effectively steals from those who are truly disabled, while weakening the economy for everyone.”

Mr. Thornton said that during the course of the investigation he underwent a three-hour interview with Social Security investigators and an FBI agent over his disability status and whether he received any compensation from his participation in the reality-television episode.

     What does disability look like to Senator Coburn? Absolute incapacitation to do anything? I know nothing about Mr. Thornton's disability claim other than the silliness that appears in the press. Senator Coburn knows no more about this man's capacity to work than I do. I cannot express a reasoned opinion about Thornton's disability claim and neither can Senator Coburn.
     And why was the FBI called in on this?

Getting The Word Out

     From the Reuters Money blog:

“Starving the beast” is a favorite conservative strategy for forcing cuts in federal spending. The idea is to deprive the government of revenue in order to force spending cuts ...

The SSA [Social Security Administration] is funded through the same Federal Insurance Contributions Act (FICA) tax that pays benefits, so it doesn’t compete for general revenue to meet its costs. But Congressional appropriators — who oversee its budget — have been squeezing the agency anyway.

In fiscal 2011, Congress provided the SSA with about $1 billion less than requested by President Obama. Those cuts forced the agency to make cuts that beneficiaries have noticed. It suspended mailing of the annual statement of benefits, and it shelved plans to open eight new hearing offices to handle the backlog of disability claims, which has soared during the recession.

SSA had planned to restore the statement mailings in fiscal 2012 to people over age 60 not yet receiving benefits  – but that won’t happen “if Congress doesn’t provide adequate support,” says SSA spokesman Mark Hinkle....

Hinkle says the SSA also has responded to the tight budget by reducing employee overtime by 80 percent. That has cut into the amount of time available to help people who come into SSA local field offices for face-to-face services. The agency also lost about 1,600 workers last year who can’t be replaced due to a hiring freeze.

     In addition to learning about the 80% cut in overtime, I take away from this the fact that a Social Security spokesperson is out there alerting the media about Social Security's appropriations problem, something that Social Security has traditionally not done. In fact, my impression has been that over the decades that Social Security has always downplayed its funding problems -- to the agency's detriment. I would be interested to know who made the first contact in this case, Hinkle or the reporter.

Quiz Answer

Question: Retroactive Social Security or SSI benefits are not treated as a resource for purposes of computing SSI benefits for what length of time after receipt?

Possible answers:

• Three months
• Six months
• Nine months
• One year
• Until spent

Correct answer: Nine months

3.5% COLA

CBS Money Watch is reporting that the Social Security Cost of Living Adjustment (COLA) to be announced tomorrow will be 3.5%. However, many Social Security recipients will not see this. Their Medicare premiums should have increased but they saw no decrease in their net benefits because of the "hold harmless" provision of the law. Now that there is a COLA, their Medicare Part B premiums will go up, maybe even eliminating any COLA for them.

Quiz

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More Own Motion Review Coming?

     Social Security has recently formed the Division of Quality in the Office of Appellate Operations. The Division of Quality appears to have been created to select Administrative Law Judge (ALJ) decisions  to be reviewed and overturned by the Appeals Council, a process called "Own Motion Review." Own Motion Review is nothing new. It has been around for decades. The Appeals Council has always insisted that some ALJ decisions that denied disability claims are reviewed but it has always been clear that  vastly more decisions allowing claims are reviewed than decisions denying claims.
     Forming the Division of Quality may be of considerable importance or nothing of consequence. It all depends upon the resources devoted to the Own Motion Reviews.

     I may be paranoid but I have to wonder whether this is related to the recent Wall Street Journal stories about an ALJ in West Virginia who was approving almost all of the disability claims he reviewed. I also have to wonder whether the recent Ruling that will make it almost impossible to file an appeal from an ALJ decision and file a new disability claim at the same time is connected to this. That Ruling will discourage requests for Appeals Council review which will free up more staff time at the Appeals Council which could be used to clear off the huge backlogs at the Appeals Council or which could be used to do far more Own Motion Reviews.