A common Social Security reform we hear around election time is implementing a form of “means testing.” This is a way of looking at a person’s finances to determine whether he or she has the means to stay afloat financially. The idea behind means testing reform is that, if a person has sufficient means, he or she does not need Social Security benefits to the extent that someone who fails the means test does.
SSI Benefits and Means Testing
In fact, means testing is already an important component of Social Security benefits. Supplemental Security Income (“SSI”) benefits employ stringent means testing that eliminates all but those facing the most difficult financial situations. For an individual, the SSI benefit is $698 a month for 2012. Half of every dollar of your countable income (anything you earn or any financial help you get from family) directly reduces your SSI benefit. Additionally, if you have assets of more than $2,000 (this includes money in bank accounts, cars and anything else you own), you are ineligible for SSI benefits. More information on qualifying for SSI benefits is available from a Tulsa SSI lawyer.
SSDI Benefits and Means Testing
Social Security Disability Insurance (“SSDI”) benefits are for disabled Americans unable to work. They are focused more on work history than SSI benefits are, but they also use some aspects of means testing. You can start receiving SSDI benefits only if you are severely hurt or suffering from a medical condition, and you are unable to work at all. If you return to work, after a trial period, your wages start to reduce your SSDI benefits or eliminate them altogether. Making more than $1,010 a month generally makes you ineligible for SSDI benefits.
Retirement Benefits and Means Testing
Regarding retirement benefits, if you start drawing them before retirement age and while you are working, your income will reduce the amount of benefits you can receive. Additionally, about a third of retirement beneficiaries have to pay taxes on their benefits, sending their benefit money right back into the system. Further, those earning more than $34,000 per year may have to pay taxes on up to 85 percent of their total benefits.
How has means testing already impacted your Social Security benefits?
Troutman & Troutman, P.C. – Tulsa Social Security disability attorneys