The Center on Budget and Policy Priorities (CBPP) has a report up on 4 Reasons Why Disability Insurance Is Especially Important to Less-Educated Workers.

 
The report suggests that less-educated workers are frequently people with lower cognitive abilities.  It is true that all indivudals are not above average. Some are born with lower cognitive abilities. The cognitive abilities of others are permanently stunted by difficult childhood circumstances. Lower cognitive abilities lead to lower educational achievements. Adult education is of only limited use for people with low cognitive abilities. They lack the ability to profit from it. People with lower cognitive ability are at a huge disadvantage when they develop medical or psychiatric problems. All they are suited to do is to work at jobs with low skill requirements and those jobs aren’t in offices. Those jobs generally involve significant exertional requirements and offer limited tolerance for psychiatric issues. If all you ever had to offer an employer was a strong back and a good attitude you’re in big trouble if your back loses its strength or your good attitude isn’t so good.

 

A recent article in USA Today, suggests that many retirees are doing financially better than generally reported.  Read the full article here:

Get rid of that notion that retirement must be a time to cut costs and pinch pennies. Rather, plenty of people seem to be in a position to splurge a bit after claiming Social Security benefits.

Most people are able to maintain or increase their spending slightly once they start receiving retirement benefits, according to a new report by economists at the Investment Company Institute and the Internal Revenue Service. The study, which analyzed tax data from 1999 to 2010, found that the typical worker had about 3% more after-tax spendable income after claiming Social Security benefits than before — and the lowest-income people had 29% more on average.

Social Security combined with other retirement sources such as workplace 401(k) plans and Individual Retirement Accounts thus provide “substantial income” for many people and more than is commonly assumed, the report said.

The researchers compared spendable income reported by people on their tax returns during the year before they first claimed Social Security benefits, while still working, and three years after they claimed. Spendable income was defined as that from jobs, Social Security benefits and other retirement sources. It increased for more than half of taxpayers over the comparison period.

In fact, more retirees received income from multiple sources than is commonly reported in government surveys, said Peter Brady, an economist at the institute who was part of the research team. He said this indicates government data understates income for retirees.

From a recent report from the Office of the Inspector General:

Statutory benefit continuation allows an individual to continue receiving disability benefits during the appeal of a medical cessation determination at the reconsideration or ALJ hearing levels. If the cessation determination is upheld after appeal, the Social Security Administration (SSA) considers the payments received during the appeals process overpayments the individual must return to SSA. 
We project SSA overpaid approximately $682.5 million to individuals in our population who continued receiving disability benefits during the appeals process but for whom ALJs upheld the cessation determinations from October 1, 2013 through July 8, 2016. This comprised $138.5 million overpaid to DI beneficiaries and $ 544 million overpaid to SSI recipients.
As of August 2016, SSA had collected only 4 percent, waived or terminated collection action on 17 percent, and posted another 37 per cent to the beneficiaries’ records but did not take action to collect, waive, or deem them uncollectible. SSA had not posted about 14 percent to the beneficiaries’ records for collection. Likewise, for the amount overpaid to the SSI recipients, SSA was in the process of collecting 61 percent. It had collected 2 percent, waived or terminated collection action on 13 percent, and had posted another 17 percent to the recipients’ records but did not take action to collect, waive, or deem them uncollectible. SSA had not posted 7 percent to the individuals’ records for collection. The average processing time for medical cessation appeals had increased from our prior reviews. Specifically, processing times were 766 days for sampled DI beneficiaries and 831 days for sampled SSI recipients — increases of 18 percent and 20 percent, respectively. If SSA prioritizes medical cessation appeals, it could increase DI and SSI programs’ financial performance. For example, we project SSA could have avoided $69.7 million in DI overpayments and $266 million in SSI overpayments had it completed the appeals process for medical cessation s within its processing time goals totaling 394 days. 
The agency’s response to the suggestion that it should prioritize cutting people off benefits because that would save money was to say “We agree.”

U.S. Social Security has its problems but it does an excellent job of protecting data security. Look to India for an example of how things can go very wrong. Somehow, the names, addresses, bank account information, and Aadhaar number (the equivalent of a U.S. Social Security number) of 1.4 million Indians were posted on a Indian government website.

 

So, at least SSA is doing something right.

I had the pleasure of attending the North Florida MS Society’s On Move Luncheon last week.  I have long had a close relationship with the North Florida MS Society due to my personal connection with MS (several family members and many friends are currently living with MS).  I am always happy to support their efforts in the community.  The MS Society is the largest funder of private research in drugs that slow the progression of the disease and ease the symptoms.

 

The good news is that the FDA approved the first drug–Ocrevus–to treat to treat primary progressive MS (PPMS).  There are already several treatments for the common form, relapsing-remitting MS (RRMS), which affects about 85% of MS patients. But the FDA gave Ocrevus a “breakthrough therapy designation” last year because it also treats PPMS, an especially debilitating form of MS where the disease steadily worsens rather than having periods of relapse or remission. The CDC estimates about 15% of patients with MS have PPMS.

Social Security Fraud

May 17, 2017

The Social Security Subcommittee of the House Ways and Means Committee held a hearing recently on antifraud efforts at Social Security. The hearing was more notable for what didn’t happen than what happened. There was no new announcement of some fraud ring preying upon Social Security. I’m not sure how much longer Republicans will try to milk the Conn case but they don’t have a new case to talk about.

 
The agency witness talked about anti-fraud computer systems that Social Security has installed. Apparently, a fair amount of money and time has gone into this. However, the agency witness didn’t have anything to say in his written remarks about fraud that had been uncovered using these systems. Maybe it’s too early to expect results from these systems, maybe Social Security hasn’t tried hard enough to make the systems work or perhaps organized fraud at Social Security is actually quite uncommon. I suspect that the  Republican leadership of the Subcommittee would like for Social Security to uncover lots of organized fraud since that would be in keeping with their political and social beliefs, however, I believe that they are going to be disappointed. If there is anything organized, it’s probably quite small and more likely involves Social Security employees than members of the public.

With little fanfare, the Social Security Administration has raised the Social Security wage cap from $118,500 to $127,200. That’s a tax bump of 7.3% for high earners. As a result, the maximum amount of Social Security tax you can pay for the year will increase from $7,347 to $7,886.40. This is the largest one-year increase in the Social Security taxable earnings cap since 1983.

But, 6.2% is only half the story.  That 6.2% tax withheld for Social Security from your wages isn’t the only tax money that goes to the Social Security Administration. Your employer also has to pay 6.2% of your salary out of its own pocket for Social Security. If you’re self-employed, you have to pay both sides yourself, resulting in a 12.4% Social Security tax — and an even more significant tax bump in 2017. The IRS does sweeten the self-employed taxpayer’s deal somewhat by allowing them to deduct half of their self-employment taxes from their taxable income.

Contrary to common belief, the Social Security taxes from your paycheck aren’t set aside for your own benefit. The taxes that the Social Security Administration collects today pay for the benefits of current retirees. Any money that’s left over goes into the Social Security trust funds for future use.

In January 2017, retirees received a 0.3% cost-of-living increase to their Social Security benefits. That works out to around $5 extra per month for the average recipient. The maximum Social Security benefit has also gone up slightly for workers who retire at full retirement age, from $2,639 to $2,687. These increases are part of the reason for the taxable-income bump.

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