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M21-1, Part V, Subpart iii, Chapter 1, Section B – Social Security Administration (SSA) Benefits Program

Overview


In This Section

This section contains the following topics:
Topic
Topic Name
1
2
3
4
5

1.  Overview of the SSA Benefits Program


Introduction

This topic provides an overview of the SSA benefits program, including

Change Date

April 12, 2018

V.iii.1.B.1.a.  Claims Processor’s Familiarity With the SSA Benefits Program

Social Security is the type of income most often received by beneficiaries of the Department of Veterans Affairs (VA) income-based benefit programs.  Therefore, claims processors should become familiar with the Social Security Administration (SSA) benefits program.

V.iii.1.B.1.b.  Social Security Benefits

Regular Social Security checks that are countable income for VA purposes are paid to workers and their dependents when the worker retires, becomes severely disabled, or dies.  These benefits are paid under Title II of the Social Security Act.

V.iii.1.B.1.c.  Social Security Eligibility

To be eligible for Social Security benefits, the worker must have
  • been employed in an occupation that was covered by Social Security or self-employed under Social Security, and
  • had deductions taken from earnings and credited to his/her Social Security record.

V.iii.1.B.1.d.  Amount of Social Security Benefits

The amount of Social Security the beneficiary receives each month is determined by a number of factors, such as the
  • amount deducted from the individual’s earnings, and
  • age at which the beneficiary starts drawing Social Security.
Retirement checks can start as early as age 62.  If the worker starts receiving retirement benefits before age 65, the monthly check is permanently reduced.

V.iii.1.B.1.e.  Social Security Disability Benefits

Social Security disability benefits can be paid to a worker between ages 18 and 65.  The worker must be so disabled as to be unemployable and the disabling condition must be expected to
  • last, or have lasted, for at least 12 months, or
  • result in death.
Social Security disability benefits cannot start before the sixth full month that the worker has been disabled.
Disabled children, spouses, and survivors may also qualify for disability benefits on a worker’s Social Security record.

V.iii.1.B.1.f.  Social Security Benefits for a Survivor With a Child

A surviving spouse can get Social Security survivor’s benefits at any age if he/she has a child who is either
  • under age 16, or
  • disabled.
However, the benefits stop when the child reaches age 16 or is no longer disabled.
Although this benefit is dependent on the existence of the child, it is a surviving spouse benefit and should be attributed to the surviving spouse for VA purposes.

V.iii.1.B.1.g.  Social Security Benefits for a Survivor Without a Child

A surviving spouse without a child can start receiving Social Security survivor’s benefits at age 60, but the monthly rate is permanently reduced if the surviving spouse starts drawing benefits before reaching age 65.
The amount received ranges from
  • 71.5 percent of the deceased worker’s benefit, if the surviving spouse starts drawing at age 60, to
  • 100 percent of the deceased worker’s benefit if the surviving spouse waits until age 65 to start drawing Social Security.

V.iii.1.B.1.h.  Social Security Benefits for a Disabled Surviving Spouse

A disabled surviving spouse can start receiving Social Security survivor’s benefits at age 50.  The disabled surviving spouse’s payment is 71.5 percent of the deceased worker’s benefit.

V.iii.1.B.1.i.  Additional Social Security Benefits

An individual receiving Social Security disability, retirement, or survivor’s benefits usually receives additional benefits for
  • unmarried children under age 18 (or under age 19 if the child is a full-time high school student), and
  • unmarried children age 18 or over who
    • were severely disabled before age 22, and
    • continue to be disabled.

V.iii.1.B.1.j.  FMAX

The total Social Security benefit payable does not always increase as additional dependents are added.  The monthly benefit is limited by the family maximum amount (FMAX).
The FMAX is the maximum benefit available for distribution within a family unit.  It is based on a formula that is related to the worker’s average monthly earnings.
If the FMAX applies, the removal of a dependent may not change the total Social Security benefit payable but may result in a reallocation of benefits.
Reference:  For more information on counting the income of dependents, seeM21-1, Part V, Subpart iii, 1.F.2.

V.iii.1.B.1.k.  SSI Program

SSA and the States jointly administer the Supplemental Security Income (SSI) program.  Eligibility criteria are different from those that apply to Title II Social Security.  SSI assures a minimum monthly income to needy people with limited income and resources who are
  • 65 or older
  • blind, or
  • determined disabled.
Under 38 CFR 3.3(a)(3)(vi), a Veteran meets the age or disability criterion for pension eligibility if the Veteran has attained age 65 or has been determined disabled by Social Security.  Therefore, if the Veteran is shown to be in receipt of SSI benefits, presume the Veteran meets the age or disability criterion for pension eligibility.
Note:  Under 38 CFR 3.272(a), SSI is countable income for the Old Law Pension program.  It is not countable income for Section 306 Pension or Parents’ Dependency and Indemnity Compensation (DIC).  For current-law pension purposes, SSI income is considered to be income from welfare and is not countable.
Reference:   For more information on exchanging information with SSA, see M21-1, Part III, Subpart iii, 3.B.

V.iii.1.B.1.l.  Lump-Sum Death Benefit

SSA pays a lump-sum Social Security Death Benefit (SSDB) on the death of an insured individual.  The SSDB, usually $255, is countable income.
When a VA pension claim is processed before Share contains the new Social Security rate information, assume that the claimant received the lump sum benefit if the
  • deceased spouse was in receipt of Social Security benefits during his/her lifetime, and
  • claimant was living in the same household as the deceased spouse.
Note:  In the decision notice, inform the claimant of any assumptions VA made in processing the claim.

2.  Medicare


Introduction

This topic contains information on Medicare, including

Change Date

June 15, 2015

V.iii.1.B.2.a.  Medicare Premiums

Medicare is a Federal health insurance program for people 65 or older, or people of any age with permanent kidney failure, and certain disabled persons.
Medicare is divided into the following three parts:
  • Part A-hospital insurance
  • Part B-medical insurance, and
  • Part D-prescription drug coverage.
Enrollment in the hospital insurance program is automatic if the eligibility criteria are met.

V.iii.1.B.2.b.  Part A Coverage

A qualified individual does not usually pay a premium for hospital insurance (Part A) coverage.  Hospital insurance covers certain
  • inpatient hospital care
  • skilled nursing home care, and
  • hospice care.

V.iii.1.B.2.c.  Part B Coverage

Medical insurance (Part B) coverage is voluntary and requires payment of a monthly premium.  Most people pay the monthly premium through a monthly deduction from their Social Security checks.  This is the Supplementary Medical Insurance Benefit (SMIB) also known as the SMIB premium, the SMI, or theMedicare premium or deduction.
Part B coverage helps pay for doctor’s services and a variety of other medical services and supplies.

V.iii.1.B.2.d.  Part D Coverage

Medicare prescription drug coverage (Part D) is available to individuals who qualify for Medicare Part A or Part B.  Enrollment under Part D is voluntary and requires payment of a monthly premium.
Note:  Part D monthly premiums are based, in part, on the income of the covered individual.

V.iii.1.B.2.e.  Standard and Non-Standard SMIB

The monthly Medicare premium paid by most beneficiaries is known as thestandard SMIB.  However, some beneficiaries have non-standard SMIBs, usually as a result of their not paying the Medicare premium when they first became eligible for Title II Social Security.  They must now pay a higher premium to compensate.  The standard SMIB rate is included in an annual Fast Letter from the Pension and Fiduciary Service about cost-of-living adjustments for Federal benefit programs.
If a VA beneficiary receives Social Security and has an amount deducted from the monthly Social Security check to pay the Medicare medical insurance premium, add the amount of the deduction to the check amount to determine countable Social Security income.
Example:  If the beneficiary receives a monthly check for $650 and has a Medicare deduction of $78.20, monthly countable Social Security is $ 728.20.

V.iii.1.B.2.f.  Private Reimbursement for Medicare Premiums

Some private establishments reimburse their retired employees for premiums paid under Medicare.
For current-law pension, count reimbursements as income and consider them as deductible medical expenses.
For Old-Law or Section 306 Pension cases, do not count these reimbursements as income, but consider them as deductible medical expenses per 38 CFR 3.261(a)(22).

V.iii.1.B.2.g.  State’s Purchase of Medicare Coverage for SSI Recipients

Some States purchase Medicare coverage for certain residents who receive SSI.  SSI is not countable income.
Likewise, Medicare premiums paid by a State are not countable income.  However, if a State pays an SSI beneficiary’s Medicare premium, do not allow the Medicare premium as a deductible medical expense.

V.iii.1.B.2.h.  Prescription Medication Coverage Under the MMA of 2003

Medicare beneficiaries at or below 135 percent of the Federal poverty level are eligible for subsidized discounts on prescription medications under the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003.
Assistance or savings received under the MMA is not countable income.  However, it may be necessary to recalculate income for VA purposes (IVAP) if the beneficiary is subsequently reimbursed for the cost of prescription drugs that VA previously allowed as a deductible medical expense.
Note:  It is not necessary to recalculate IVAP if doing so would not change the beneficiary’s payment rate.
Reference:  For information on the federal poverty level, see M21-1, Part IV, Subpart ii, 2.F.9.

3.  Computing Monthly SSA and Medicare Benefits


Introduction

This topic contains information on computing monthly SSA and Medicare benefits, including

Change Date

April 12, 2018

V.iii.1.B.3.a.  Social Security Entitlement
Claims processors are required to check the Share interface with Social Security before awarding income-based benefits.  Therefore, it is generally unnecessary for claims processors to manually compute Social Security entitlement amounts.
SSA computes a beneficiary’s monthly benefit or gross monthly entitlement based on a number of factors.
The gross Social Security entitlement may be in dollars and cents, but Social Security monthly checks are always rounded down to even dollar amounts.
Reference:  For more information on the Share interface with SSA, see the Share User’s Guide.

V.iii.1.B.3.b.  Determining the Countable Monthly Social Security When the Monthly Social Security Amount Is Known

Follow the steps in the table below to determine countable monthly Social Security for VA purposes when the monthly Social Security check amount is known.
Step
Action
1
Determine the actual monthly check amount.
2
Add in any
  • amounts being withheld pursuant to garnishment orders, or
  • other involuntary withholdings initiated by third parties.
3
Add in the amount of the SMIB (or Medicare deduction) and the Medicare Part D amount.
Result:  This is the countable monthly Social Security income.

V.iii.1.B.3.c.  Determining the Countable Monthly Social Security When the Gross Social Security Entitlement Is Known

Follow the steps in the table below to determine countable monthly Social Security for VA purposes when the gross Social Security entitlement is known.
Step
Action
1
Subtract any amounts withheld to recoup a Social Security overpayment.
2
Subtract the SMIB (or Medicare deduction.)
3
Round down to an even dollar amount.
4
Add back the SMIB (or Medicare deduction.)
Result:  This is the countable monthly Social Security income.

V.iii.1.B.3.d.  Handling Withheld and Garnished Social Security Benefits

When Social Security is withheld to recoup an overpayment, the overpayment was probably counted as IVAP at the time it was received by the beneficiary.
If there is garnishment of Social Security or involuntary withholding due to legal action initiated by a third party, it is as if the beneficiary had received the benefits and used the funds to pay a creditor.
Use the table below to determine the difference in countable income based on either withheld or garnished Social Security benefits.
If a Social Security payee’s benefits are …
Then count the …
withheld or reduced to recoup an overpayment of Social Security benefits
amount actually received plus the Part B Medicare premium.
garnished or involuntarily withheld due to legal action initiated by a third party
entire Social Security benefit.
Note:  Do not count the amount withheld to recoup a Social Security overpayment, even if the beneficiary was not in receipt of VA pension at the time the Social Security overpayment was created.
If notice is received that a claimant’s Social Security has been reduced to recoup an overpayment, initiate development to determine the exact rate while withholding is in effect and the date full benefits will be restored.

V.iii.1.B.3.e.  Example:  Handling Withheld Social Security Benefits

Situation:  A Veteran receives a Social Security check in the amount of $520.00 per month.  The check would be larger except that
  • the Veteran has a $88.50 per month Medicare deduction, and
  • SSA is withholding $200.00 per month to recoup an overpayment.
Result:  The countable Social Security is $608.50 per month ($520.00 + $88.50).

V.iii.1.B.3.f.  Example:  Handling Garnished Social Security Benefits

Situation:  A Veteran is entitled to Social Security of $1010.50 per month.  The Veteran has a $106.20 Part B Medicare deduction and $200 per month is being withheld for child support pursuant to a court order.  The Veteran actually receives a monthly check in the amount of $704.
Result:  The countable monthly Social Security for VA purposes is $1010.20 ($904.00 + $106.20).

4.  Sources for Accessing Social Security Information


Introduction

This topic contains information on sources for accessing Social Security information, including

Change Date

June 15, 2015

V.iii.1.B.4.a.  Sources of Information About Social Security Benefits

The most readily accessible and accurate sources of information concerning a beneficiary’s Social Security benefits are the
  • Share interface with SSA, and
  • current Social Security award letters.
If a beneficiary alleges that information obtained from these sources is inaccurate, advise the beneficiary to furnish a statement from the nearest district office of SSA with the specific information required to resolve the issue.
Reference:  For more information on the action to take when the Social Security rate reported by the beneficiary is different than the rate in Share, see M21-1, Part V, Subpart iii, 1.A.2.d.

V.iii.1.B.4.b.  Interpreting Social Security Award Letters

Social Security award letters may indicate the date that the first check will be sent to the beneficiary or may show a date of entitlement, for example, July 2014.  If only a date of entitlement is shown, assume that the beneficiary will receive a full month’s check for the entitlement month, for example, July 2014, and each month thereafter.
However, if an offset or deduction is required for some reason, such as, payee employed, or overpayment to be recouped, then benefits may not be payable from the date of entitlement.  If this is the case, the text of the letter should state the reason why benefits are not payable from the date of entitlement.
The Social Security award letter shows the amount and date of any retroactive payment issued to the beneficiary.  An R in the PAYMENT INDICATOR field of the Share screen indicates that an SSA action possibly affected payment.
Note:  With the exception of Social Security cost-of-living increases, VA counts income from the first day of the month following the date the beneficiary receives it.  Unless Social Security retroactive payments are involved, a Social Security payee who first becomes entitled to Social Security as of July 2014 would generally receive the first Social Security payment in August 2014.  VA would count this as income as of September 1, 2014.

5.  Terminated Disability Social Security Benefits and Withdrawn Social Security Applications


Introduction

This topic contains information on terminated disability Social Security benefits and withdrawn Social Security applications, including

Change Date

May 20, 2011

V.iii.1.B.5.a.  Adjustments Based on Terminated Disability Social Security

For information about adjustments based on terminated disability Social Security benefits, see M21-1, Part V, Subpart iii, 1.H.3.

V.iii.1.B.5.b.  Exception to Benefit Waiver Rule:  Withdrawal of Application for Social Security

Under 38 CFR 3.276(a), a person may not waive entitlement to potential benefits from non-VA sources to receive or increase VA current-law pension.  Potential income from such waived sources counts as income for current-law pension.
However, if a claimant or beneficiary withdraws a Social Security application after a finding of entitlement so as to maintain eligibility for an unreduced Social Security benefit on attainment of age 65, do not regard the withdrawal as a waiver per 38 CFR 3.276(a).
Note:  Do not count as income the Social Security benefit that would have been received except for the withdrawal of the application.
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