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Stimulus Checks Cause Some To Lose Disability Benefits

  May 19, 2021 | By Arthur Delaney, Huffington Post

Stimulus payments aren’t supposed to count against eligibility for social insurance programs like disability benefits, but some people might have lost benefits because of too much money in their bank accounts.

The Social Security Administration has suspended disability benefits for some Supplemental Security Income recipients because the stimulus payments pushed their bank accounts above the program’s archaic $2,000 limit, according to legal aid attorneys.

“The whole point of stimulus was to help people who were being harmed during COVID, and now there’s going to be people facing a cessation of benefits and they’re going to end up in a worse place,” said Michelle Spadafore, senior supervising attorney with the New York Legal Assistance Group, citing several cases in New York that she’s aware of.

It’s likely that relatively few of the program’s nearly 8 million beneficiaries have been affected. The program provides $794 monthly to people with disabilities and limited resources who can’t earn much on their own. Most people on SSI would have been eligible for full stimulus payments from the three coronavirus relief bills Congress passed.

Everyone on SSI is subject to the resource limit, which hasn’t been updated since 1989. It’s $2,000 for individuals and $3,000 for couples, with exclusions for a home, a car and certain other assets.

Because the coronavirus stimulus payments are technically tax credits, they shouldn’t have affected eligibility for any social program, whether it’s food benefits or Social Security. Under federal law, tax credits don’t count as income or “resources” for eligibility purposes within a year of their receipt.

But the Social Security Administration is a huge agency with lots of employees, and it’s possible some have made mistakes, said Stacy Cloyd, director of policy and administrative advocacy with the National Organization of Social Security Claimants’ Representatives. What should happen, Cloyd said, is that when the agency sees more than $2,000 in someone’s bank account ― the overall balance is all the agency sees ― it should investigate and then back off if the cash came from a tax rebate within the past year.

“If the resource limit were $10,000 this would be a lot less of an issue,” Cloyd said. President Joe Biden has proposed updating the asset limit, but Democrats haven’t yet reintroduced their bill to change the policy.

Joseph Morris, a 67-year-old in Philadelphia, said the Social Security Administration notified him last year that he had lost eligibility for Supplemental Security Income payments because he had more than $2,000 in his bank account from June through November. Morris said the extra money came from the $1,200 payment he got from last year’s Coronavirus Aid, Relief and Economic Security Act.

Morris asked for a reconsideration, but the agency affirmed its decision in March. Starting next month, Social Security will take 10% out of Morris’ monthly benefits until it recoups the several thousand dollars the agency believes it overpaid him last year. Earlier this month, the agency said in a letter that “we are withholding part of your check to get back money you were overpaid.”

Morris thinks it’s ridiculous, and that losing $79 of his monthly income could make it hard to pay his electric bill.

“You’re going to give me a stimulus check to stimulate the economy, and I can’t go out under doctor’s orders and you’re penalizing me for having this money,” Morris said. “Now it’s going to cost me money to have this money.”

Morris’ attorney, Richard Weishaupt of Community Legal Services of Philadelphia, said he has another client facing the same problem. Weishaupt is hoping to get the agency to change its mind.

“It’s happening to a disturbing number of people,” Weishaupt said. Part of the problem is that both Social Security and legal aid offices are closed because of the coronavirus, meaning people on disability can’t walk in and ask for help like they could before the pandemic.

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