COVID-19 Update

March 25, 2020

The Office of Hearings Operations is a little chaotic right now.

  1. Telephone Hearings:  I have had one hearing by telephone conference and it is my understanding some of the judges are willing to have telephone hearings.  Any client (currently) has the right to a hearing in person and can elect to have their hearing continued until an in-person hearing can be scheduled.  At least for now.
  2. Postponements:  Some judges do not want to hold telephone hearings and they are canceling hearings for now, to be rescheduled at a later date.
  3. OHO Closed to the Public.  That means me and you.
  4. Social Distancing:  I am not having an in person office appointments at this time due to recommendations made by multiple government agencies including the CDC and WHO.  Call the office if we can help you in any way.  If you need to drop off paperwork, use the dropbox downstairs from the office.  We cannot answer the door but will talk to you through the intercom if possible.

For now, I am still taking new cases and working on all of my cases within the restrictions set up by SSA.  Call me if you have any questions at 904-981-9812 and stay safe.

From the New York Times reader questions:

Is Social Security financially secure? Should people in their 60s who can afford to wait to claim benefits wait until they can get the highest monthly benefit, or should they consider signing up now because the program may not be there in 20 years?

In the years ahead, Social Security does face a financial shortfallthat requires action by Congress. The combined trust funds for Social Security’s retirement and disability programs are on course to be depleted in 2035; without changes, funding from payroll tax receipts will be sufficient to pay only 80 percent of currently scheduled benefits.

That would mean immediate, across-the-board benefit cuts, but the pain would be felt most acutely by today’s younger workers and low-income retirees.

“If policymakers don’t address Social Security’s finance gap by 2035, all Gen Xers and millennials would experience the cuts throughout retirement,” notes Richard W. Johnson, director of the program on retirement policy at the Urban Institute. “An additional one-third of retirees could end up in poverty.”

The shortfall stems primarily from the retirement of baby boomers combined with the slow growth of the labor force, which reduces the ratio of workers paying into the system and beneficiaries. Rising life expectancy also plays a role; so does rising inequality in worker earnings.

When Congress last adjusted the cap on wages subject to the payroll tax in 1977, the intent of lawmakers was to cover 90 percent of all wages. But wages above the cap have grown more quickly than the average wage, so the cap (set this year at $132,900) now covers only 83 percent of wages, reducing taxes flowing into the system.

The projected shortfall is an understandable source of worry, considering the importance of Social Security to most households. But it has no practical, short-term impact on benefits, says Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. And he thinks the odds of reaching the 2035 doomsday scenario are slim.

“Given the strong public support for the program, it is inconceivable that Congress won’t step in sometime before 2035 and put things on an even keel,” he says. “It’s a source of concern, but not something to lose sleep over.”

Congress could put Social Security back into financial balance with new tax revenues, benefit cuts or a combination of both. The Democratic-controlled House is advancing a plan that would putSocial Security back into balance over the next 75 years by increasing payroll tax rates by 0.1 percentage point annually through 2043, reaching 14.8 percent for that year and later. The bill also would apply payroll taxes to earnings over $400,000, starting in 2020. The bill would expand benefits modestly.

The legislation, sponsored by Representative John B. Larson, Democrat of Connecticut and chairman of the Ways and Means Social Security Subcommittee, has 211 co-sponsors in the House.

From the New York Times Reader questions:

I own my own business. Is it possible for me to “pay into” Social Security?

Assuming you are paying self-employment taxes, you already are contributing. The self-employment tax, paid in lieu of the payroll tax that employers split with employees, is 15.3 percent, with 12.4 percent going to Social Security and 2.9 percent to Medicare.

Self-employed people pay double the rate that they would as employees, but can deduct half the cost from income taxes when they calculate their adjusted gross income.

Business owners who are incorporated pay Social Security taxes as employees. More information is available from the I.R.S.

Again from the New York Times reader questions:

How much of my Social Security income will be taxed?

For lower-income retirees, Social Security usually is tax free, while higher-income seniors pay taxes on a sliding scale. No more than 85 percent of your benefit is taxable.

To determine if your benefit is taxable, add up your gross income, nontaxable interest income and half of your Social Security benefit. If that number exceeds $25,000 (for individuals) or $32,000 (joint filers), some portion of your benefit is taxable. For details, see the instructions for completing lines 5(a) and 5(b) of Form 1040 in the Internal Revenue Service’s guide.


%d bloggers like this: