NEW YORK (MainStreet) -- Social Security is a safety net for millions of Americans, either for retirement, disability or for the survivors of a qualified deceased family member. But there are situations when those benefits can be cut off or curtailed. Owing the government money – even for student loans – is one trigger.
While commercial creditors can’t garnish Social Security benefits, the IRS can take a 15% levy to satisfy a delinquent tax debt. And student loan debt – no matter how long ago you went to school – can put your Social Security benefits at risk. Other government agencies can also tap Social Security to resolve debts, including for federally-backed home loans, as well as unpaid child support and alimony.
There are two primary ways to lose disability benefits. Aaron Hotfelder, formerly a Social Security disability benefits attorney and now a legal consultant near Columbia, Missouri, says an improvement in your medical condition is one common reason.
"If you had a serious heart surgery, that can put you out of commission for more than a year and qualify you for Social Security disability benefits, but it's also the kind of thing that people can recover from to some extent and at least be able to go back to some kind of job," Hotfelder tells MainStreet.
With periodic assessments every three to seven years, it's possible that a Social Security Administration review can conclude that -- with health improvement -- you don't still meet the requirements for the medical disability program.
"One of the tell-tale signs that you have gotten better is that you stop receiving medical treatment," Hotflelder adds. If Social Security reviews a case, requests medical records and finds none available, they might assume that you're well. But Hotfelder says often the opposite is true. Patients may give up hope on a serious medical condition, or sometimes can't afford continuing care.
"And in some cases, their doctors have told them, 'There's nothing else that we can do for you, you don't need to continue seeing a doctor,'" Hotflelder says. Cases where disability benefits have been cut off can be appealed.
Earning more than $1090 a month (in 2015) can also cause you to lose disability benefits, though you have a nine-month trial period to test your ability to work again. "If you go back to work full-time for an extended period of time, they're going to decide you're not disabled," Hotflelder adds.
Besides employment, other income may be considered to determine your continued qualification for full Social Security disability benefits. That can include pension payments or alimony, free housing – even wages earned by your spouse. And jail or prison time, or a felony conviction, may stop benefits, too.
Social Security is a complex system that serves complex needs. “You can compare it to the tax code,” Hotflelder admits. And even that may be an understatement.
-- Hal M. Bundrick is a Certified Financial Planner and contributor to MainStreet. Follow him on Twitter: @HalMBundrick