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Paying taxes on Social Security Disability benefits

With only one month to go until April 15th, our focus has quickly shifted to this year’s tax preparations. From W-2s to 1099s, to 1040 mailings to tax preparer solicitations, we are bombarded with reminders of our obligations to both the federal and state governments – whether we like it or not!

While some individuals who receive Social Security Disability pay taxes on their benefits, some do not. Individuals excluded from this rule are those persons receiving SSI. SSI benefits are non-taxable, thus depleting the need to report them on any tax return. However, if a SSI recipient earned additional monies other than SSI benefits, he or she is required to report those monies earned on the appropriate tax form.

Approximately one-third of all beneficiaries receiving benefits are required to pay taxes on money received. Two factors determine whether an individual will be required to pay taxes on any benefits received. The total amount of money earned (SSDI + additional income) and an individual’s filing status (single, married filing jointly, married filing separately) are those things considered. To determine whether your benefits are taxable, compare the base amount representing with filing status with one-half of your benefits plus any additional income, including tax-exempt interest.

Single $25,000.00 (base amount)
Married filing separately $0.00 (base amount)
Married filing jointly $32,000.00 (base amount)

Hypothetical cases incorporating these guidelines are below:

Hypothetical situation # 1

Anne is single and receives SSDI, and over the course of 2009 received $18,000.00 in disability benefits. She received $2,000.00 as additional income in the form of commission from a business that she has. Her combined total income for 2009 is therefore $20,000.00. Since the total amount earned is below the $25,000.00 required for a person-filing single, Anne is not taxed on her disability benefits. *Note: Because Anne’s salary combined was below the set income of $25,000, there was no need to consider one-half of her benefits. The results either way would have been the same.

Hypothetical situation # 2

Daniel, a single 43-year-old male, received $18,000 in disability benefits during the year of 2009. In addition, he earned $18,000.00 as a commercial construction consultant. In this case, to determine whether Daniel would have to pay taxes on his disability benefits, we would need to take one-half of Daniel’s disability benefits (1/2 of $18,000 = $9,000.00) and add those monies to any other income that Daniel received in 2009. In this case, he earned an additional $18,000.00. These two totals combined equal $27,000.00, which is $2,000.00 over the $25,000.00 maximum for individuals whom file single. In this case, Daniel’s benefits would be taxed as well as any other income he earned during 2009.

A rule of thumb, if you are in doubt whether you are required to pay taxes on your benefits, consult with a professional tax preparer. Ignorance is not a defense in law.

SSI and SSDI During and After Incarceration

Question:

What happens to an individual’s disability benefits when they are convicted of a felony offense and sentenced to a time of incarceration?

Answer: Under Section 404.468 of the Code of Regulations, “No monthly benefits will be paid to any individual for any month any part of which the individual is confined in a jail, prison, or other penal institution or correctional facility for conviction of a felony.” Thus, if an individual receiving disability benefits commits and is later convicted of a felony offense, any disability payments he/she was receiving at the time of his/her incarceration will stop until such a time as the individual is released.

*Please note: both SSDI and SSI payments are subject to termination if an individual is convicted on a felony offense and as a result is sentenced to a period of incarceration. However, auxiliary benefits, those benefits paid to eligible family members, will continue even if the individual is not receiving benefits at the time because of his/her felony conviction and imprisonment.

Restoring SSI and SSDI Benefits After Being Released from Prison

Although an individual may lose his/her benefits during the time of incarceration, benefits can be restored as soon as the individual is released from prison. The procedures for having disability payments reinstated differ slightly according to the type of benefit that an individual was receiving prior to his/her confinement.

Restoring SSI

Depending on the length that an individual expects to be confined, he/she may be able to begin a “pre-release procedure” while still incarcerated. This is completed through a “Pre-Release Agreement” between the jail and the SSA and applies to inmates that have been or expect to be incarcerated for a period of less than one year. Although felony sentences by law carry a prison sentence of more than one year, it is possible that a defendant could be given credit for any time he/she has already served while awaiting trial and/or disposition in their case. An example of a hypothetical situation is as follows:

“John,” a SSI recipient of five years, is convicted on felony theft, which in the state of Georgia is theft of property in excess of $500.00 and is punishable by a possible term of imprisonment of 1-10 years. John was unable to afford bond and as a result spent six months in jail awaiting trial and/or disposition in his matter. John subsequently entered a guilty plea and was sentenced to 15 months in the state penitentiary. At his discretion, the sentencing judge gave John credit for the time he had already served, meaning that John only had nine months remaining. In this particular case, John was able to start the paperwork necessary to reinstate his benefits while incarcerated. Since John was proactive, it is likely that his benefits will start immediately following his release. If John has chosen to wait until his release to start the reinstatement of his benefits, again he would have received payment for any day that he was eligible, but the probability of his checks being delayed would have significantly increased.

Since any SSI award is based on the recipient’s income, individuals presently confined need to know what his/her income will be upon release and what resources he/she will have available. In addition, the SSA will need to know what other persons, if any, will be residing with the defendant following their release. On the day a disability claimant is released from confinement, they are encouraged to go directly to their Social Security office with personal identification and proof of their release.

Restoring SSDI

If an individual is receiving SSDI at the time of his/her incarceration, he/she will remain on the rolls during their jail or prison term, regardless of the length of their sentence. Like with SSI, SSDI payments will stop when a claimant is incarcerated and recipients will need to request reinstatement of their benefits when the time comes to be released from prison.

Although there is no pre-release procedure for SSDI as there is for SSI, jails or prisons that have Pre-Release Agreements for SSI can also use the same form to help SSDI recipients get the reinstatement process started. Those inmates unable to obtain a Pre-Release Agreement form should inquire as to whether the prison staff knows how SSDI payments can be restarted upon their release. If all else fails, incarcerated individuals should seek the assistance of their family members who can contact their local Social Security office for more information. In addition, the Social Security’s website, http://www.ssa.gov/disability/ contains a wealth of useful information.

In closing, it is against the law for any person convicted of a felony and sentenced to a term of imprisonment to continue to receive social security disability benefits during their period of incarceration. Likewise, it is illegal for someone other than the intended recipient to cash a disability check in the name of another person, specifically under the disguise of the individual in prison.

Diabetes and Social Security Disability Case Study Posted

This afternoon, I tried an SSDI case involving a 53 year old woman claiming disability based on diabetes and associated complications.  In reviewing the record it appears to me that my client had been diabetic for several years prior to her diagnosis and has most likely suffered permanent vision and nerve damage.  Unfortunately her medical care has been suboptimal and while she has been compliant with treatment the record does not contain enough for me to make an argument based on the listing at 9.08.  Instead I went with a functional capacity argument.

You can read the case study on my Georgia Social Security disability web site.

Helpful Tips for the Disability Claimant: Knowing How To Describe Pain

In a recent post on the importance of claimant credibility, I made a point that your ability to effectively describe your physical pain at the hearing may play a role in helping you win your case. Since physical pain is common to many disability cases, I want to elaborate on this point. Not only should you be able to effectively describe your pain at the hearing, but also throughout the claims process and during doctor’s visits as well.

Pain is subjective and can be hard to describe

All individuals have experienced some degree of pain at some point throughout life. The intensity of pain can range from a dull headache, to an agonizing toothache, to the more severe type of pain commonly associated with chronic conditions such as migraine headaches, Fibromyalgia, and Reflex Sympathetic Dystrophy (RSD). Although pain is a symptom and we easily recognize it when we experience it, pain is nevertheless hard to describe. Fellow Blogger Tomasz Stasiuk, whose Colorado Social Security Disability Blog contains a wealth of information about the disability claims process, made note of this fact in his December 2009 article on how to describe pain in a Social Security Disability case.

As Thomas suggests, pain can be hard to describe because 1) it is subjective and cannot be felt by others and 2) it is not a visible condition. Thus, a judge assigned to your case may not fully understand the extent your pain if you merely state you have pain. Stating you have pain is not enough;  in order to strengthen your chances of winning your disability case, you must learn how to effectively describe your physical pain so that the caseworkers, physicians, and even the ALJ (Administrative Law Judge) assigned to your case can understand what you experience each day and how your pain limits your functioning.

Your ability to effectively describe your pain to your doctors is also important. This is because their reports and records will be evaluated by the SSA.  I have seen many medical records where during an office visit, a client replied only by saying “Fine” after being asked by the doctor “How are you doing?” In such cases, the client’s chart might reflect something like: “Patient stated that she is doing fine today.” The word “fine” does not win a social security disability case. In fact, some adjudicators will often seize on something like this to justify denying a claim. Choose your words cautiously – even while at the doctor – especially if your words relate to describing how you are feeling.

Tips on how to effectively describe your pain

As mentioned above, fellow blogger Tomasz Stasiuk has written on this topic as well and has offered some great tips on how to effectively describe pain in a disability case.  Because his tips are so useful, I am republishing them here (with minor additions) for your convenience. The following are some guidelines suggested by Tomasz Stasiuk to help claimants be able to effectively describe their pain.

Nature of the pain: What is the pain like? Is it sharp or dull? Is the pain aching, shooting or throbbing? Does the pain burn? Is it a constant ache that progresses to spasms as it evolves? On a scale from one-to-ten, how does your pain rate?

Location: Where is the pain physically located on your body?

Frequency and Duration: It is painful all the time or just some of the time? How long does the pain last? Do you feel better in the morning? Alternatively, does it start bad in the morning and continue to worsen until you go to bed?

Triggers: What events trigger your pain, if any? Do events such as walking result in pain? Does looking at a computer screen for an extended period of time result in migraine headaches?

Effects of pain: Does the pain affect how much you can lift? Does the pain affect your ability to interact with your children or spouse? How long can you sit, stand or walk? Does your pain affect your ability to read any type of written correspondence, whether it be a book or letter?

Effects of medications: Do your medicines help? Does the pill or injections relieve all of the pain or just some of the pain? What do the medications help with? What pain does the medication not relieve?

Keeping a journal of your symptoms and pain may be useful

Again, pain must be described in other words than by just saying “I hurt.” As noted in earlier posts, keep a journal handy and write down your daily symptoms and experiences with pain. Something like: “A day in the life of X (your name).” It does not have to be in some fancy, formal writing style. Notes jotted down are just fine. Be sure to include things such as pain level, daily limitations, and medicines taken (and side effects). It can be hard to remember on your own how you feel each day. The disability process is long and enduring. Do yourself a favor and start journaling today.

The Consultative Exam (CE): Part 3

Hello and welcome to the final installment of my 3-part mini-series on the Social Security Disability consultative examination (CE).  Part 1 is here and Part 2 is here.  In this final post, I discuss what can you can expect at a CE and what kind of information that the CE will need to contain to substantiate your disability claim.

Question:

What type of information does the CE (consultative examination) need to contain in order to substantiate my claim for disability?

Answer:

The CE is more or less a doctor’s appointment in which (typically) an independent medical examiner will conduct additional medical testing or assessment in order to help make your disability case file complete so that the SSA may be able to render a decision in your claim.What happens at the CE depends on what kind of testing (psychological, neurological, and so on) is required by the SSA. But since you have probably already had plenty of experience with doctors by this time, the CE shouldn’t necessarily hold any surprises.

In terms of information needed in the actual examination report, the following guideline is a comprehensive list of information needed to ensure that your claim is further processed without additional delay:

A physical description of the claimant; this is an additional tool to ensure that the medical records are those of the claimant and not those of another individual.

All medical history, physical examination, laboratory findings and diagnoses should be included. The report should be such that an independent reviewer is able to determine the nature, severity and duration of the impairment as well as the claimant’s ability to perform basic functions required in the simplest of jobs without requiring additional information. If the report is incomplete, the examiner will be contacted and a request to supplement the records and/or clarify will be made thus creating additional delay.

Include a narrative finding in the history and of the physical examination.

Conclusions following the CE must be consistent with all other medical documentation under consideration.

The report should not include an opinion as to whether the claimant is disabled under the law.

All CE reports must be reviewed and signed by the provider who performed the examination.

Well, I hope this covers everything you need to know about the CE. Feel free to share stories about your CE or ask additional questions about the consultative exam by leaving a comment below.

The Consultative Exam (CE): Part 2

Hello and welcome to Part 2 of my 3-part mini-series on Social Security Disability consultative exams (CE).  Part 1 is here.  In this post, I discuss how an independent medical examiner is chosen by the SSA for the purposes of conducting a CE.

Question:

How does the SSA choose a consultative examination source? Is there a list that they choose from, or do I choose?

Answer:

First, as I mentioned in an earlier post, consultative examinations are those additional tests and/or examinations requested in order to aide in the disability determination process. When I say “qualified,” that means the source, usually a physician or specialist, is required to be licensed in the state in which the application is being made and to have extensive training and experience in the type of test and/or examination being requested. In many cases, the examiner performing the CE is not your physician, but an independent source contracted by the SSA.

You can be assured that if a consultative examination is requested in your matter, the individual who performs the examination has an extensive understanding of the SSA’s disability programs. He/she is well versed in the evidence needed in order to substantiate a diagnosis of any impairment that you may have. All treating sources are required to comply with any accreditation standards subscribed by the SSA. Likewise, any staff that assists with the CE must meet those strict requirements as well.

In most cases, great consideration is given to the location of the claimant when a treating source is selected. This provides the claimant with a degree of comfort, as he/she is not required to travel extensively in order to submit to the requested testing.

In regard to the second part of your query, the SSA has list of sources available to them for completing a CE. Again, this list is established based on those qualified sources meeting the requirements dictated. Sources are chosen based on appointment availability, ability to perform specific examinations and/or tests, and again, the locale in relation to the claimant.

Click here for Part 3 of my mini-series on the Consultative Exam…

The Consultative Exam (CE): Part 1

I have been asked a few questions which relate to the Consultative Examination (CE), which is basically a doctor’s appointment sometimes scheduled on your behalf by the SSA if they feel that additional medical testing/evidence is required to help them render a decision in your case. In this and the following two posts, I will answer questions about the consultative exam and explain in further detail what you can expect at the CE.

Question:

If the medical records I submitted with my claim are determined to be inadequate to make a disability determination, is there a possibility that additional information would be requested by the SSA on my behalf?

Answer:

The answer to your question is ‘maybe.’ If additional medical information is requested and/or a clarification is needed, your original treating source (physician, specialist, psychiatrist, etc.) is the first preferred source to contact. However, there is a second option available, which is the scheduling of a consultative examination (commonly known as a CE) through an independent source.

Again, your treating source is the preferred choice for additional examinations as long as the following requirements are met:

  • Your treating source (physicians, specialist, psychiatrists, etc.) is qualified;
  • He/she has access to the testing equipment required to perform the examination and/or requested testing;
  • He/she is willing to perform the requested examination and/or tests for a set fee, established by the state in which you have made application in;
  • He/she is able to furnish a complete report within a specified time limit

However, as mentioned above, there are provisions that allow for an independent source, that person other than the treating source, to conduct a consultative examination and any future testing. Those instances in which an independent source would be considered over a treating source are as follows:

  • The treating source cannot or does not prefer to conduct the requested examination;
  • Conflicts and/or inconsistencies exist in the claimant’s file which are unable to be rectified by going back to the treating source;
  • The claimant prefers an independent source and presents a valid reason for doing so;
  • The treating source is considered an unproductive source

So, when the SSA determines it necessary to schedule a CE, they will contact the independent source, schedule the appointment, and then notify you of the appointment date and time.

The types of additional testing and/or examinations requested are strictly limited to the additional evidence needed in order to render a decision on the claimant’s application for disability. Tests conducted outside of the needed information requested are not permissible unless the examination warrants additional testing. In this event, the treating source must have prior approval before conducting further tests.

Please stay tuned for Part 2 and Part 3 of this mini-series on the consultative exam.

Your Credibility – A Key Factor in Winning Your Claim

In a previous blog post, I set out several discussion points that I raise with my clients in our pre-hearing conferences.  One of those discussion points has to do with “credibility” – are you a believable witness?

While I think that the quality and nature of your medical record functions as the most important factor as to whether your case will be approved, your credibility is almost as important.

When I refer to credibility, I am speaking of whether you come across as truthful and believable.   Credibility is not something you can manufacture – if your medical condition is not serious and you could perform work, you will face a difficult time winning.  However, it is possible for a truthful, legitimately disabled person to lose because he or she did not appear believable in his/her testimony.

Realize that every claimant that a judge meets during the day is asserting that he/she is disabled. Therefore, your demeanor and your testimony must come across as believable in order to be successful at the hearing. Here are some tips on how to come across as a credible witness at a Social Security Disability hearing.

1. Dress Appropriately

Chosen court attire often aids in determining the credibility of the claimant. Wherein State and Federal courts require a minimum of casual dress, Social Security hearings are generally less formal. Although informal, how a claimant dresses should be such that it conveys respect to the Administrative Law Judge (ALJ). Torn blue jeans and tank tops are examples of clothing that should be avoided at a disability hearing. This is not to say that you have to dress formal; donning formal clothing is unnecessary, and in fact, can send a conflicting message to the judge. For example, an applicant wearing high heels although she insists that she cannot walk without pain will definitely make any testimony she gives less credible. A rule of thumb is to dress conservatively but comfortably.

2. Be specific in your answers

An individual’s ability to answer with informative responses to questions posed by a judge will result in the individual’s testimony being credible. For instance, during a hearing, it is common for the ALJ to ask the applicant questions regarding his/her physical ability. Questions like “How far can you walk?”; “How much weight can you carry?”; and “How long can you sit?” are all questions that an applicant can expect to be asked of him/her during a hearing. It is extremely hard for a judge to consider the profound effect of an individual’s impairment if the applicant responds to a judge’s inquiry with “I don’t know.” If an applicant fails to be specific, then the judge will more than likely consider answers of this type not credible.

3. Don’t over-exaggerate your pain

Physical pain is common to most disabilities.  An individual’s disability caseworker as well as any ALJ expects disability applicants to list pain as a chief complaint.  As such, it is common during the hearing for the Judge to inquire as to the level of pain that a claimant experiences on a routine basis.  Again, although a degree of physical pain is expected, stating pain consistently at level 10 is considered an exaggeration and will result in that portion of the individual’s testimony not being considered.  The basis for this decision is that a consistent pain at level 10 would result in a mental deficiency.  It is unlikely that the individual experiencing pain at level ten 24 hours a day, 7 days a week, would be able to be present during a hearing, much less offer supporting and competent testimony.  A rule of thumb for describing pain is to state the pain experienced in percentages.  For example, an individual may experience pain at level five, seventy-five percent of the days, while the other twenty-five percent is at a level 10.  It is also helpful to describe any events that trigger an increase in pain.  For instance, individuals with RSD, a nerve condition, experience an increase in pain during cold weather. Doing this will also help you to come across as being specific.

So, before you attend your Social Security Disability hearing, just remember that credibility is an important element and be thinking of ways to appear credibly. Without credibility, even a deserving claimant’s chance of receiving benefits is compromised.

How Can Waiting to Apply for Benefits Cost You Money?

Recently, I came across a very relevant blog post written by New York Social Security disability lawyer Lew Insler entitled Waiting to Apply for Social Security Disability Can Cost You Money.  Attorney Insler comments “I still don’t understand why some people wait years before even filing their claims. Not only do claimants lose out on years of potential benefits, but the longer a person waits to apply, the harder it may be to obtain the medical records necessary to show disability while they are still covered for benefits.

I think that Mr. Insler’s point is very well taken.  When you apply for Title II disability benefits, you can only get paid up to one year prior to your application date, even if your disability began two, three or more years ago.  In a Title XVI SSI case you can only get paid as of the date of application.

Another problem that can arise if you want relates to your insured status for Title II Disability.  Unlike retirement benefits, which are calculated based on your lifetime earnings, Disability benefits look at your earnings during the 10 years prior to the onset of your disability.  Generally you have to show that you worked for 5 out of the past 10 years.   When you stop working, your coverage will therefore remain in force for the next 4 to 5 years.  You need to show that you became disabled while you were covered. Continue reading →

Q & A: How does the SSA determine what my functional limitations are?

In this 10th Q & A post, I discuss how the SSA determines what your functional limitations are.

Question:

How exactly does the SSA determine the effects of a claimant’s symptoms on his or her ability to function in the workplace?

My answer:

As you know, symptoms arising from your condition can severely affect your daily functioning. But in the SSA’s eyes, merely stating that you have symptoms that interfere with your abilities is not enough to win approval. The SSA, in deciding your claim, has to go a step deeper to determine how your symptoms effect your functioning. In doing this, the SSA will consider the following:

  • How the symptom affects the daily activities of the claimant; a claimant’s ability to function; his/her limitations as a result of the symptom
  • Location, duration, frequency and intensity of the pain or other symptom
  • Side effects of any medication being taken, as well as the type of medication and the dosage taken
  • Treatments, outside of medication, for the relief of pain or other symptoms
  • Avenues which a claimant uses or has used to relieve pain or other symptoms

A good lawyer should also be able to draw conclusions about what functional limitations arise from your symptoms. Without being able to translate your medical symptoms into work limitations, I can say that you will have a tough time winning your claim. Work limitations are the bread and butter of a winning case.

One last point about extracting functional limitations from your symptoms: It is important that physicians note in a claimant’s medical records how any symptom experienced by the claimant affects his/her ability to function on a day-by-day basis. This supportive documentation will only substantiate an individual’s disability claim and leave little to no room for misinterpretation about how your symptoms affect your functioning.

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