How Do You Apply For Social Security Disablity?

The basic steps you need to know when applying for Social Security Disability

How Does the SSA Calculate Cost of Living Increases?

Next year, Social Security recipients will see a 2 percent raise in benefits, the largest increase in six years.

For Social Security Disability Insurance (SSDI) recipients, the average monthly benefit will go up from $1,170 to $1,180, not including people who are blind, for whom the monthly rate is significantly higher. For Supplemental Security Income (SSI) beneficiaries, the average monthly benefit will rise from $735 to $750.

But how does the Social Security Administration (SSA) calculate its annual cost of living adjustment (COLA)?

The answer is a seemingly arbitrary measure of inflation, long criticized by advocates for the elderly and people with disabilities as unrepresentative of the spending patterns of Social Security beneficiaries.

Each month, the Bureau of Labor Statistics (BLS) publishes a variety of different measures of inflation, each of which are tailored to reflect the impact of price changes on different population groups.

The SSA, when calculating its annual COLA, relies on a measure of inflation known as Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Adopted by the SSA in 1975, this Index attempts to measure inflation based on the spending patterns of people living in 1) urban households, 2) for whom at least half of the household’s income comes from clerical or wage occupations, and 3) one of the household earners must have been employed for at least 37 weeks during the previous 12 months.

According to the BLS, only about 28 percent of the total U.S. population falls into households that meet this criteria. As very few of these households contain individuals receiving Social Security benefits, it is unclear why the CPI-W is the SSA’s preferred measure of inflation. Many advocates contend that the CPI-W doesn’t rise quickly enough to reflect the spending patterns of SSI and SSDI beneficiaries.

Ironically, the BLS has constructed – but does not yet use for the COLA – a separate index for measuring inflation for the elderly that tends to record higher rates of inflation, primarily due to increased medical costs. As such, this index also would likely better reflect the economic realities for SSI and SSDI beneficiaries. The BLS, however, warns that this separate index for the elderly is currently experimental, and should be treated with caution.

Despite widespread criticism of the SSA’s reliance on the CPI-W, most legislation in recent years has been focused on pushing the SSA to adopt an even stricter form of inflation measurement.

The Obama Administration, in both 2013 and 2014, and numerous Republican budget proposals, including the most recent one in the House, have pushed for a new measure known as the “chained CPI.” This measure attempts to calculate how people compensate for increased costs via substitution, i.e., buying one product instead of another. Annual inflation is typically measured as between 0.25 to 0.35 percent less under this measure, according to the New Republic.

The Social Security COLA went up just 0.3 percent for 2017 and not at all for 2016. Next year’s increase is primarily the result of recent boosts in energy and food prices.

For more on how the SSA calculates COLAs, click here.

Click here for frequently asked questions about the CPI-W.

Thank you!

Thank you to the special needs department at the JCC Springfield for the opportunity to speak about special needs planning.  I appreciate the invitation and opportunity to present.  We discussed special needs trusts, Social Security Disability, ABLE accounts, guardianships, financial strategies and other special needs planning topics.  Thank you to the many families that attended and all of the great questions.  Thank  you again for hosting our workshop!

How to Make Distributions to an SNT Beneficiary Without Disrupting Their SSI

Computer MoneyWhen serving as the trustee of a special needs trust, it is crucial to be careful when making distributions for the benefit of the trust beneficiary.  This is particularly true if the beneficiary receives Supplemental Security Income (SSI) because any distribution could potentially violate Social Security’s rules regarding unearned income for SSI recipients. If a distribution runs afoul of these rules, the Social Security Administration will treat the distribution as unearned income on behalf of the beneficiary and reduce the beneficiary’s income dollar-for-dollar after the first $20 of the distribution.

The most common example of a distribution that would be deemed unearned income is when a trustee provides a cash reimbursement to a beneficiary for a purchase the beneficiary made, even if the beneficiary has a receipt. If the trustee reimburses the beneficiary directly, the reimbursement will be considered unearned income and the beneficiary’s SSI will be reduced dollar-for-dollar for the reimbursement.

However, there are ways to make purchases for beneficiaries that will not negatively affect the beneficiary’s SSI benefits. Here are five examples of appropriate disbursements.

  1. The trustee can distribute the requested goods or services directly to the beneficiary in person. For example, the beneficiary finds a computer that they like at a brick-and-mortar store and gives the trustee the information on the computer; the trustee would then go to the store, buy the computer using trust funds and deliver it directly to the beneficiary. If the beneficiary and the trustee are close in proximity to each other, this can reduce the cost of shipping that would be applied to the purchase. It also allows for the beneficiary to receive the goods more quickly. One potential downside to the beneficiary is the cost of having to compensate a professional trustee for their time purchasing the goods and then personally delivering them directly to the beneficiary.
  2. The trustee can also purchase services or goods with trust funds and have the goods or services delivered directly to the beneficiary. One common example is purchasing furniture or appliances online and have the items shipped to the beneficiary’s residence. This can be a very efficient way to handle a beneficiary’s request for an item. However, if the product is something that needs to be tried on, such as a coat, it is possible that the first purchase may not fit the beneficiary and multiple purchasing attempts may be necessary.
  3. The trustee can also reimburse a third party who pays for a service. For example, a relative might pay for a beneficiary to attend a sporting event and the trustee could reimburse the relative for the cost of the beneficiary’s ticket. It is important to remember that the beneficiary cannot be reimbursed, only the third party who purchased the item. In such cases involving reimbursing a third party, it is important to have documentation of the cost of the service and the date on which it was provided.
  4. The trustee can purchase gift cards or gift certificates for the beneficiary. However, care should be exercised here because gift cards and gift certificates must meet certain legal requirements. For a more in-depth analysis of the problems with purchasing gift cards for a beneficiary, click here.
  5. The trustee can pay a beneficiary’s credit card bills. For an article on this option, click here.

For more on being the trustee of the special needs trust, click here and here

Breakthrough In Down Syndrome Research at UMass Medical

I read a very interesting article recently on the UMass Medical School website regarding Down Syndrome research.  Scientists at UMass have found a way to block or neutralize the extra chromosome that causes developmental problems and intellectual disabilities in people with Down Syndrome.   The discovery “may one day help establish potential therapeutic targets for future therapies.”  To read the entire article, see the UMass website.  Please  refer to Nature to read the details of the study.

Am I Eligible For Social Security Disability – Part 3

In part 3 of our 5 part series, we are discussing the process you must go through to be approved for social security disability benefits.  We’ve already discussed the first two steps, which address working and the severity of your impairment.  In this series, we will discuss step 3 of the sequential evaluation process which addresses whether your medical condition meets or equals a listed impairment by the Social Security Administration.  The 5 step sequential evaluation process is noted below for reference:

  1. Are you currently working?  Does your impairment prevent you from performing substantial gainful activity?
  2. Is your condition severe?
  3. Does your medical condition meet or equal a listed impairment?
  4. Can you perform your past work?
  5. Can you do any other type of work?

Step 3

Quite simply, if your condition meets or equals a listed impairment, you will be awarded benefits.  So if your condition is not on the list, does that mean you will be denied?  Not necessarily.  If  your medical condition does not meet or equal one of the listed impairments, it means you must be evaluated under steps 4 and 5 to be awarded benefits.  Steps 4 and 5 address your prior work history and whether you could potentially transition to other types of work if applicable.

In the next series, we will discuss step 4, “Can you perform past work?”

Financial Planning For Families With Special Needs


  • Start Early and Get Help –  Lack of planning may have disastrous consequences.  Planning for special needs families often involves several  financial, legal and benefits-related strategies.  Assembling a team of qualified professionals to advise you will take time.  A financial advisor, estate planning attorney, benefits coordinator, trustee/trust company, family physician/registered nurse, and of course family members may all need to be involved in the ultimate plan.
  • Establish a Special Needs Trust – If you’re receiving government sponsored benefits, a gift or inheritance may cause a disqualification of those benefits.  A frequently asked question  is how to provide for a family member with special needs without jeopardizing those government benefits.  Parents may purchase life insurance to be paid out to a special needs trust.  They may also designate the special needs trust as a beneficiary in a will, trust or retirement account.  The funds designated to the special needs trust at death may be used to supplement the special needs family member without jeopardizing their benefits.
  • Draft a Letter of Intent – How can you be assured that proper care will be given to your child? You’ve established a special needs trust  to provide financial assistance when you’re gone, but have you named  a person that will assume the role of guardian or caregiver?  Do they know the name and address of your child’s physician?  Do they know their therapies, procedure and medication schedule?  Do they know their faith and where they attend religious services?  Answers to these and many other questions should be discussed and memorialized to ensure the best possible care for your child.
  • Consider Life Insurance – Someone, most likely a family member, will have to step in to act as a guardian and raise your child.  In all likelihood, that family member will have to pay for some of the services the parents had provided when able.  If the estate was not large enough, life insurance can provide the needed funds to help defray the cost of care.
  • Review Often – Many changes will occur during the course of your life.  Reviewing your plan annually will ensure everything is up to date to give you the peace of mind your family is taken care of.