Cutting Through the Fog of Social Security Benefits

Question: Recently I read your column about Social Security, and I hope you can be helpful to me. I have tried to obtain this information from the Social Security office without success.

In July, 1966, my husband died at the age of 69. He had been paying into Social Security from the time self-employed attorneys had been permitted to participate. I became 65 years of age two months prior to his death and have been receiving Social Security for the past 20 years--at the present time it is $541 a month.

However, I have been employed since October, 1966, and have had Social Security deductions from my salary for the past 20 years. I retired this past March.

My questions are:

--Was I entitled to additional payments from Social Security because of my own salary deductions to Social Security?

--What Social Security would I now receive if I should choose to collect on my own contribution? The payment of $541 I now receive is under my husband’s Social Security number, of course.--C.N.S.

Answer: There’s only one way in the world to find out what you’re really entitled to, and that’s by sitting down with someone in the local Social Security office. From your own Social Security records it’s a simple matter to determine what you’ve paid into the system and what your monthly benefits would be if you switched over and took your own benefits instead of your late husband’s.

You can see the “ifs” involved in all of this. Your husband’s earnings--and therefore the Social Security benefits built up--were probably pretty high. But they were “high” by the standards before 1966 (the year of his death). For instance: According to the 1986 Statistical Abstract of the United States, the 1965 average income for a married couple where the wife didn’t work (as was apparently your situation in the year before your husband’s death) was $6,706. But the same couple in 1983 (the last year for which we have statistics) earned an average of $21,890.

As a working widow for the past 20 years, then, it is entirely possible--especially in light of the inflationary impact of the ‘70s and early ‘80s--that your own earnings and the higher Social Security deductions prevailing might result in higher monthly benefits for you now. In 1966, for instance, your husband as a self-employed participant paid 6.15% of his earnings, up to a maximum of $6,600, into Social Security. This year, when you retired, you were paying 7.5% of your earnings (so was your employer) up to a maximum of $42,000 into the program.

So, that’s why it is essential that you get together with Social Security as soon as possible and find out what your own earnings and contributions would amount to in terms of monthly benefits.

It’s certainly a no-lose situation for you, as Joe Giglio, Social Security’s public affairs specialist here, points out: You could very well end up with higher benefits as a result of this comparison, but in no way will you end up with less than you’re receiving now--the $541 a month coming to you as your husband’s surviving spouse.

And if it is more beneficial to switch over to your own benefits, Giglio adds, it’s a simple matter to make such a switch.

Q: My son, age 50, receives Social Security for being disabled. Can he inherit my home, my money and my car without losing his benefits? Can he inherit part interest with his brother? Can he inherit anything?

I called the Social Security office, and they said he can receive anything and not be taken off Social Security. Later, I called again and they said if his check arrived by the second of each month, he could inherit everything without his Social Security being stopped, but if the check came on the third day of the month, he could not inherit anything. I would really appreciate it if you could make it clear for me.--D.H.

A: Would you believe it possible that this isn’t as complicated as it sounds? And that all of this preoccupation with what day of the month your son gets his check does, indeed, have some relevance?

What it boils down to--again according to Social Security’s Joe Giglio--is which variation of Social Security disability your son is receiving. There are two versions (wouldn’t you know?).

If your son is receiving Social Security disability benefits based on his work history under Social Security, there’s no problem--he’ll continue getting his disability regardless of anything that he may, someday, inherit (unless, of course, he re-enters the work force).

But there’s another breed of Social Security known as SSI (Supplemental Security Income), which is administered by Social Security and is, essentially, a payment made to the aged, blind or disabled who were not covered by regular Social Security. It replaced a hodgepodge of welfare plans previously administered by the individual states. And like virtually all welfare, there is, indeed, a “need” factor involved--a limit, that is, on the other assets you can have in order to be eligible.

Disability Benefits

Under SSI, then, Giglio explains, an inheritance would translate as assets and could, indeed, cut off your son’s disability benefits--at least for a while. While there is a federal dollar amount that serves as a floor under these SSI disability payments, some of the states kick in an additional contribution in recognition of the fact Uncle Sam is picking up a substantial share of a total welfare burden that they, individually, would otherwise have to ante up. In California, then, the standard SSI check is for $533 for a recipient who lives independently (but this might not apply to your son who may or may not live alone--you didn’t specify).

Now, what’s all of this fuss about the day of the month on which your son receives his Social Security check? It makes more sense than it seems, Giglio adds.

“SSI checks are dated on the first of the month, and regular Social Security checks are dated on the third.”

Translation: The date on the check is the key--not when it is actually received--because both SSI checks and regular Social Security (including disability) checks are sometimes mailed early to offset weekends and holidays.

If it’s a regular Social Security disability check, he could inherit the Getty fortune without having the benefits affected. But, remember, it’s the date that matters.

There’s another tip-off as to which type of check it is too. Giglio adds: If your son’s Social Security number (which appears on the check) has an alphabet after it (A, B, C, etc.), it is definitely a regular Social Security disability check.

If it does not have any sort of letter after it, it is definitely an SSI check. (SSI checks and Social Security checks used to be different colors, now they’re the same rainbow color.)

So, if your son is covered by SSI, what sort of impact are we talking about if he inherits something from you? Well, the maximum assets he can have in California and still receive SSI disability are $1,700. If he inherits more than that from you, his SSI checks will stop until those assets, once again, drop below $1,700 and then, once again, he becomes eligible for SSI disability.