Thursday, April 24, 2014
Via Investment News:
Average health care costs for middle-income retirees are on a path to exceed their Social Security benefits, according to a newly created Retirement Health Care Cost Index. The index devised by HealthView Services, a provider of Medicare, Social Security and long-term-care planning tools, measures the percentage of Social Security benefits required to pay for health care-related costs in retirement for a healthy couple receiving the average expected Social Security benefit at full retirement age. Retirement health care costs will increase from 69% of Social Security benefits for a couple retiring next year to 98% of Social Security benefits for a healthy couple retiring 10 years from now, according to the index. For couples retiring two decades from now, the gap will be even more dramatic. They would need 127% of average Social Security benefits to cover their health care costs in retirement. Total retirement health care costs measured by the index include all Medicare premiums, including Parts B and D, and Medigap premiums, as well as out-of-pocket costs, including co-pays not covered by Medicare. The index assumes that the primary income earner will generate the Social Security average of $1,294 per month in today's dollars and $817 per month for the lower-earning spouse. The index measures the lifetime average of health care costs, which tend to increase as retirees age.
Source/more: Investment News Retirement
Friday, April 18, 2014
Three legal advocacy organizations, Disability Rights Oregon, the Oregon Law Center and the National Senior Citizens Law Center, worked as a team to initiate a class action suit in Oregon on behalf of 700 individuals with disabilities to protect their rights to continue to receive Social Security benefits needed for basic living requirements. The individuals' access to monthly Social Security benefits was jeopardized when a non-profit organization, "Safety Net of Oregon," serving as their representative payee was disqualified following an investigation for alleged mismanagement of clients' funds. The advocates explained:
"This suit is asking that SSA follow its own regulations to make sure that benefits continue to flow to recipients in a safe and responsible manner. In early March, SSA sent a notice to approximately 1,000 SSA recipients who have Safety Net as a representative payee, advising them that their benefits would be suspended beginning April 1, 2014, and that the amount they would receive would be $0.00. While some recipients have been able to find a new payee, or to become their own payee, many clients never received the notice and have no idea that their benefits are about to be suspended. Almost 700 individuals still lack new payees as of March 21, 2014. Many are homeless, have severe and persistent mental illness, developmental disabilities, and/or alcohol or drug addictions. Many of the clients are profoundly social isolated and alienated, and totally unable to navigate the system on their own."
In response to the suit, the federal court issued a restraining order on March 26 requiring SSA to assign new payees to former Safety Net Clients, rather than delay, require new applications or other in-person requests by the disabled SSI and SSD recipients. More background here.
Tuesday, April 15, 2014
The Social Security Administration announced on Monday that it is halting its practice of "Treasury Offsets" to recover debts reported to be 10 years or older. This decision comes just three days after the Washington Post's front page account of intercepts that targeted IRS income tax refunds going to children of alleged debtors. As reported in today's Washington Post:
“"I have directed an immediate halt to further referrals under the Treasury Offset Program to recover debts owed to the agency that are 10 years old and older pending a thorough review of our responsibility and discretion under the current law,' the acting Social Security commissioner, Carolyn Colvin, said in a statement.
Colvin said anyone who has received Social Security or Supplemental Security Income benefits and 'believes they have been incorrectly assessed with an overpayment' should contact the agency and 'seek options to resolve the overpayment.'”
The Washington Post reported that after its first article, "many hundreds of taxpayers whose refunds had been intercepted came forward and complained to members of Congress that they had been given no notice of the debts and that the government had not explained why they were being held responsible for debts that their deceased parents may have incurred."
Hmm. It seems that it is the intercept notice procedures that may be the focus of reexamination by the SSA, rather than giving up on the authority granted by Congress in 2008 to recover "stale" debts. Plus, it is unclear whether SSA will explain its theory for seeking recoveries against children of debtors.
Friday, April 11, 2014
George Washington Law Professor Naomi Cahn drew a direct line between our post earlier today about law review articles exploring various theories about "filial" or family obligations for support, and a chilling report from the front page of today's Washington Post. From the article by Marc Fisher, titled "Social Security, Treasury Target Taxpayers for Their Parents' Decades Old Debts:"
"Social Security claims it overpaid someone in the Grice family — it’s not sure who — in 1977. After 37 years of silence, four years after Sadie Grice died, the government is coming after her daughter. Why the feds chose to take Mary’s money, rather than her surviving siblings’, is a mystery.
Across the nation, hundreds of thousands of taxpayers who are expecting refunds this month are instead getting letters like the one Grice got, informing them that because of a debt they never knew about — often a debt incurred by their parents — the government has confiscated their check.
The Treasury Department has intercepted $1.9 billion in tax refunds already this year — $75 million of that on debts delinquent for more than 10 years, said Jeffrey Schramek, assistant commissioner of the department’s debt management service. The aggressive effort to collect old debts started three years ago — the result of a single sentence tucked into the farm bill lifting the 10-year statute of limitations on old debts to Uncle Sam."
Well, that certainly trumps any nursing home's theory of family liability. Our thanks to Naomi for the timely heads up. The due process implications of the tax refund intercepts sound like a Constitutional Law exam problem in the making ... or perhaps I'm just too close to exam-writing time myself.
Wednesday, April 2, 2014
University of Oklahoma Professor of Law Jonathan Barry Foreman writes on "Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products," for the Elder Law Journal in 2014.
He points to "longevity risk," defined as the risk of outliving one's retirement savings, as "probably the greatest risk facing current and future retirees" in the U.S. As several recent studies demonstrate, such as those cited on the Elder Law Prof Blog here, here and here, many people are not adequately prepared in terms of finances for retirement.
In responding to this risk, Professor Foreman writes thoughtfully, proposing systemic alternatives, including expansion of Social Security and SSI for "the oldest old." Professor Foreman suggests 90 years of age as the starting point for that category. In addition he proposes greater incentives for public and private employers to promote annuities and other "lifetime income products" as components of employment-based retirement packages.
He concludes with a warning based on our national history of frequently failing to make significant changes in advance of a predictable crisis:
"Social insurance programs like Social Security, Supplemental Security Income, and Medicaid will certainly need to be expanded. Workers will also need to be encouraged to work longer and save more for their eventual retirements, and both workers and retirees should be encouraged to annuitize more of their retirement savings.
While these kinds of solutions seem fairly predictable, the answers to two important policy questions have yet to be decided. First, how much will the government require the oldest old to save earlier in their lives? And second, how much will the government redistribute to benefit the oldest old? Unfortunately, if the history of the Social Security system is any indication, both government mandates and redistribution will be modest, and a significant portion of the oldest old will face their final years with inadequate economic resources."
Reading Professor Foreman's tightly focused paper suggests to me that there is, perhaps, a certain irony to all of this. The irony is that by not embracing systemic change, Americans are engaging in a form of financial roulette, betting we won't live long enough to care about the outcome of our gamble.
Tuesday, March 18, 2014
Professor Donna Harkness: "What Are Families For? Re-evaluating Return to Filial Responsibility Laws"
Donna Harkness, clinical professor of law and director of the Elder Law Clinic at the University of Memphis Cecil C. Humphries School of Law, has a new article on filial support laws in the most recent issue of the University of Illinois's Elder Law Journal. In "What Are Families For? Re-valuating Return to Filial Responsibilities Laws," she concludes:
"Despite their long history, filial responsibility laws have clearly failed to remedy existing needs. The lack of uniformity in filial responsibility laws, the difficulty and cost of enforcement, along with the fact that such laws provide no coverage to those elder Americans that have no adult children to look to for support, render them a limited response at best. In addition, to the extent that filial responsibility laws are enforced, evidence indicates they would be destructive to family ties and have the counterproductive effect of further eroding and destabilizing the network of support available to elders.
Furthermore, by focusing solely on economic support, filial responsibility laws do not address the fundamental need that all persons, and most especially the vulnerable elderly, have to be supported by caring relationships. To the extent that the institution of the family, however defined, is the key to ensuring that such relationships exist, it behooves us as a society to strengthen and foster family ties through policy initiatives that reward caring relationships."
Thursday, March 13, 2014
Via Disability Scoop:
Under a new bill proposed in the U.S. Senate, the amount of money that Supplemental Security Income recipients could save without losing access to their benefits would rise for the first time in over two decades. Currently, individuals who receive SSI can have no more than $2,000 in cash or liquid assets at any given time without forfeiting their eligibility for benefits. The legislation, introduced late last week, calls for that asset limit to increase to $10,000. The bill would also eliminate restrictions that currently disallow friends and family from providing financial, food and housing support to those receiving SSI and the measure would boost the amount of income beneficiaries could earn without losing out on benefits.
“SSI is a critical program that helps millions of our poorest and most vulnerable citizens keep their heads above water,” said U.S. Sen. Elizabeth Warren, D-Mass., who proposed the bill along with Sen. Sherrod Brown, D-Ohio. Warren said the legislation would “help strengthen SSI for families who rely on these essential benefits.” More than 8 million Americans — including many with disabilities — draw on SSI. Currently, the maximum federal benefit for an individual receiving SSI is $721 per month, though many states tack on additional funding for their residents meaning that actual payments can be somewhat higher. The last time the asset cap for SSI recipients was increased was in 1989, the senators said.
Read the legislation: Supplemental Security Income Restoration Act of 2014
Thursday, March 6, 2014
New GAO Report on "Retirement Security: Trends in Marriage, Work, and Pensions May Increase Vulnerability for Some Retirees"
The decline in marriage, rise in women's labor force participation, and transition away from defined benefit (DB) plans to defined contribution (DC) plans have resulted in changes in the types of retirement benefits households receive and increased vulnerabilities for some. Since the 1960s, the percentage of unmarried and single-parent families has risen dramatically, especially among low-income, less-educated individuals, and some minorities. At the same time, the percentage of married women entering the labor force has increased. The decline in marriage and rise in women's labor force participation have affected the types of Social Security benefits households receive, with fewer women receiving spousal benefits today than in the past. In addition, the shift away from DB to DC plans has increased financial vulnerabilities for some due to the fact that DC plans typically offer fewer spousal protections. DC plans also place greater responsibility on households to make decisions and manage their pension and financial assets so they have income throughout retirement. As shown in the figure below, despite Social Security's role in reducing poverty among seniors, poverty remains high among certain groups of seniors, such as minorities and unmarried women. These vulnerable populations are more likely to be adversely affected by these trends and may need assistance in old age.
Tuesday, March 4, 2014
Michael Astrue, who served as Commissioner of the Social Security Administration for six years, has written a blog post for the Special Needs Alliance on working with SSA. It's a must read for anyone who has dealings with the agency.
Sunday, February 23, 2014
Penn State Dickinson School of Law has frequently hosted visiting academics from Ukraine. I've had the privilege of working with very talented, engaged scholars on choice of law issues, conflicts of law, family law, and filial support questions. I've been thinking a lot about my friends as I follow the news about violence and change in Kiev during the struggles over the future for the country. We did not always agree on the law, but our debates were always spirited. I hope they are safe. Knowing how committed the lawyers I've met have been to modernization and the rule of law, I can only imagine how painful this period must be.
In 2012, I was invited to publish an article, "Filial Support Laws in the United State and Ukraine," for a Ukrainian journal on family law. I later expanded my analysis for the University of Illinois' Elder Law Journal, as an opportunity to compare domestic and international trends in use of such laws to compel adult children to pay for costs to care for aging parents. In this effort, I was guided by several people, including my Penn State colleague and noted Russian law scholar, Professor William Butler, in going beyond literal translations of Ukraine statutes and to examine case reports that shed light on the potential strengths or weaknesses of different systems of enforcement. As I wrote in my second article, the Ukraine cases "demonstrate the impact of poverty -- and the importance of even a few 'dollars' extra per month - for the elder parent" for any country struggling to create a viable economic system, including former Soviet block countries.
My thoughts go out to the families, including their elders, who face uncertainty during these challenging times and who deserve a brighter future.
Friday, February 14, 2014
Via University of Michigan Retirement Research Center, a call for papers connected to an upcoming conference:
With support from AARP, a conference on Social Insurance and Lifecycle Events Among Older Americans will be held on December 5th of 2014 in Washington, DC.
The conference will focus specifically on lifecycle events commonly encountered by older Americans, the responsiveness of current policies to those events, and new thinking about policies consistent with a changing political environment.
The conference will be organized into three sections dealing with the importance of:
- changing career/job patterns,
- changes in family structure, and
- health limitations.
Papers should focus on experiences and policies aimed at addressing Americans age 50 and older and highlight the experiences of different socio-economic groups, with a particular emphasis on the disadvantaged.
Funding is available for domestic travel to the conference for one author of each paper to be presented. It is anticipated that either a special issue of a scholarly journal or an edited volume will be produced based on papers delivered at the conference.
Paper proposals for the conference should be sent to Professor Kenneth Couch by March 15, 2014. Authors will be notified of acceptances by April 15, 2014. Drafts of papers to be presented at the conference will be due by the end of October. Additional details here.
Saturday, January 18, 2014
New report from SSA's Office of Retirement and Disability Policy addresses SS, SSI participation rates by African Americans
African Americans: Description of Social Security and Supplemental Security Income Participation and Benefit Levels Using the American Community Survey
Patricia P. Martin and John L. Murphy
Research and Statistics Note No. 2014-01 (released January 2014)
Intro/summary: African Americans encounter significant economic disadvantages, making them a critical focus for social insurance programs. Examining how the African American population uses Old-Age, Survivors, and Disability Insurance (OASDI, or Social Security) benefits and Supplemental Security Income (SSI) payments clarifies the role these programs play in supporting at-risk populations.
Earlier research has explored various facets of the relationship between Social Security and African Americans. For instance, many studies investigate African Americans' low retirement benefit receipt rates relative to whites (Abbott 1977, 1980; Thompson 1975; Huntley 1979; Parsons 1980; Gibson 1987, 1991, 1994; Farley 1988; Hayward, Friedman, and Chen 1996; O'Rand 1996; Gendell and Siegel 1996; Choi 1997; Hendley and Bilimoria 1999; Gustman and Steinmeier 2004; Bridges and Choudhury 2007, 2009; Favreault 2010). Others examine the prominent role of children's benefits for African Americans (Newcomb 2003/2004; Tamborini, Cupito, and Shoffner 2011). This analysis contributes to that body of research by using a relatively new, publicly available, and comprehensive data source, the American Community Survey (ACS), to document the demographic and economic characteristics of African American OASDI beneficiaries and SSI recipients. It is designed to lay the groundwork for future detailed analyses of how African Americans interact with Social Security and related programs.
In this note, we first discuss the strengths of the ACS and the methodology of this analysis. Next, we present the demographic and economic characteristics of the African American population in the 2009 ACS. Then, we present ACS data on OASDI and SSI participation and benefit levels, comparing African American participants with overall participants in three age distributions: the full age range for which benefit statistics are available in the ACS (15 or older), working age (18–61), and retirement age (62 or older).
Wednesday, January 15, 2014
From the National Senior Citizens Law Center, here is a link to a new issue brief on problems stemming from the Social Security Administration's lack of a fair and uniform system to input and track appeals by SSI recipients.
As the good folks at NSCLC point out, "SSI recipients too often face roadblocks at reconsideration, the first stage of the appeal process.... SSA's failure to process appeal requests can leave SSI recipients without the subsitence income they rely on to pay for food, housing, and medical care."
Friday, November 22, 2013
I suspect that headline got your attention, right? Before you starting questioning my sanity, the idea -- and the reasons -- are offered by none other than Nobel-prize-celebrated economist Paul Krugman in his New York Times editorial, "Expanding Social Security." Here's a taste: "America’s overall retirement system is in big trouble. There’s just one part of that system that’s working well: Social Security."
Update: By coincidence, at almost the same time I posted the original link to Krugman's editorial, Blogging Colleague Becky Morgan posted a piece about "70" potentially being a better age to begin full retirement benefits, linking to a report from the Center for Retirement Research at Boston College. Krugman addresses the "70-is-better-because-people-are-living-longer" argument, pointing to a disparate impact on those with low income and less education, who have not seen a significant rise in life expectancy. Useful point/counterpoint materials for discussion, perhaps.
Friday, October 18, 2013
Another consequence of tough financial times is the unaffordability of professional long-term care. But in Greece, that phenomenon has an additional component, as families apparently need the elder's pension to make ends meet in the family home. Pennsylvania Elder Law attorney Dionysios C. Pappas (great name, right? Although we all call him "Dennis"), shared an article from Greece, "Care Homes See Mass Exodus," and suggested these key excerpts:
“…Grandma and grandpa’s pension has become the main source of income for thousands of Greek families struggling with unemployment, along with rising living costs and taxes. This shift has been accompanied by a mass evacuation of retirement homes across the country as elderly family members move in with their children and grandchildren in order to make ends meet…”
“…Greece has around 200 nursing homes for the elderly, half of which are private facilities while the other half are run by nongovernmental organizations and the Orthodox Church. Their total capacity is estimated at 15,000 people…before the crisis, these facilities were operating at 100 percent capacity. Today, however, this has dropped to 80 percent as one-fifth of their patients have
“…Taking elderly relatives out of retirement homes has become something of a 'solution’ to the unemployment problem…Most of the unemployed people in this country are surviving on the pensions of their parents or grandparents anyway rather than on their unemployment benefits. If unemployment continues to rise, then so will the evacuation of nursing homes…”
Thanks, Dennis, for providing this comparative information on caregiving.
Sunday, October 6, 2013
As my colleague Kim Dayton reported late last month, the National Women's Law Center has reported new statistics showing a disturbing, 2012 increase in poverty for woman over 65. The New York Times in a weekend editorial takes up the implications of the latest stats, warning against planned cuts in cost-of-living benefits under Social Security.
Hat tip to Professor Ann Murphy at Gonzaga, with special thanks for sharing the editorial -- and supportive words -- during our respective late night writing sessions!
Friday, September 27, 2013
Despite modest gains in the economy in 2012, national poverty rates remain virtually unchanged from last year. However, a new study highlights one group that has unexpectedly fallen deeper into poverty: elderly women. Among women 65 and older, the ‘extreme poverty’ rate rose 18% in 2012. Extreme poverty is defined as an annual income of $5,500 or less for older individuals living by themselves. “The cause has to be something that hits elderly individuals particularly hard,” said Kate Gallagher Robbins, a senior policy analyst at the National Women’s Law Center, who conducted the study. ”We also know that poverty for elderly men and women was statistically unchanged so we are talking about a group of individuals who went from being poor to extremely poor.”
The extreme poverty rate for elderly women ticked up to 3.1% in 2012 from 2.6% in 2011. An additional 135,000 elderly women became categorized as extremely poor, bringing the total number of elderly women in extreme poverty to 733,000. Sixty-two percent of elderly women in this group are white, non-Hispanic, 16% are Hispanic, 17% are black, 4% are Asian and 2% are Native American.
The National Women’s Law Center is currently exploring potential reasons for the sudden increase.
“One factor might be cuts in recent years to Social Security Administration funding which may be making applications for [Supplemental Security Income] more difficult,” Robbins wrote in an email to MSNBC.com. “Without Social Security, almost 15.3 million more elderly individuals would have been poor in 2012, yet many policy makers are debating switching the cost-of-living adjustment to the chained CPI which will reduce the value of benefits for current beneficiaries. Clearly these data show that making such cuts would be unconscionable.”
Another cause for the rise in the extreme poverty rate for this group may have to do with unemployment insurance benefits. Since older workers are more likely to be unemployed for longer periods of time, the likelihood that their unemployment insurance benefits expired, or even cut, between 2011 and 2012 is high.
Wednesday, September 25, 2013
The National Senior Citizens Law Center recently released "Why SSI Needs an Appeal Process that Works," NSCLC's first white paper describing the fate of non-disability claimants who experience improper suspensions or reduction of Supplemental Security Income (SSI) benefits, serious problems compounded by the lack of an effective and fair appeals process. Working with Legal Service programs and advocates around the country, NSCLC has identified pervasive flaws in the system, including the Social Security Administration's failure to:
- Process appeal requests;
- Continue benefit payments during the appeal;
- Conduct conferences required by law; and
- Issue adequate written decisions, permitting effective review or reconsideration.
These due process violations often go unchallenged because of the inability of claimants to find attorneys skilled or interested in handling appeals. The Social Security Act does not provide for awards of attorneys fees to successful claimaints on non-disability SSI appeals. On almost all levels, the system is stacked against the non-disability SSI claimant. NSCLC attorney Kate Lang explains:
"For the low-income individuals who depend on SSI benefits to access housing, food, medical care and other necessities, their inability to pursue an appeal effectively can have immediate, severe consequences. When their income is incorrectly stopped or reduced, these vulnerable individuals face hunger, homelessness and the inability to access vital medications."
NSCLC attorneys are advocates for the nation's elderly poor, and urge specific systemic change. For news stories tracking NSCLC projects to secure the health and financial security of older persons, see NSCLC in the News.
Saturday, September 14, 2013
Via the Wall St. Journal:
A white paper put out by the Center for Retirement Research at Boston College noted that 83% of married couples can benefit from “unusual claiming strategies” commonly known as “file and suspend” and “restricted application.” Both claiming strategies take advantage of the simple fact that for every year that social security benefits are delayed beyond full retirement age, payments increase 8% until age 70. In this time of low interest rates, delaying social security is one of the best financial bargains available to workers. Both strategies ease the pain of waiting by claiming spousal benefits. Once having reached full retirement age (currently 66), a spouse is eligible to to receive benefits based on the earning of a partner. One member of a married couple claims a spousal benefit first and then claims a higher full retirement benefit based on his or her own earnings at a later time up to age 70. Spousal benefits are 50% of the partner's benefit, so some cash is flowing while waiting out as much of the time as possible to age 70. There is no penalty for receiving the spousal benefit during this interim period. For a married person to get spousal benefits, the primary beneficiary must first claim their benefits.
Under file and suspend , the primary beneficiary claims his or her benefit and then suspends receipt. The spouse then claims a spousal benefit. In this case both members of the couple wait to receive the higher deferred benefits, but the couple is receiving the spousal benefit during the interim period. If both defer their benefits, the total benefits the couple can receive can be quite high. If they both wait until 70 to claim their own benefits, their benefits will be 32% higher than the benefits they would have received if they had both claimed at full retirement age.
The second related strategy is filing a restricted application . While this strategy seems to be less well-known than file and suspend, we have found that this is more often the best strategy for a married couple. With a restricted application, the primary beneficiary still needs to claim before the spouse can receive a spousal benefit, but the primary beneficiary doesn't suspend. He or she simply takes a benefit when the claim is made....
Read more in the WSJ.