February 11

Can Social Security Benefits Be Garnished to Pay Debts?

If you don’t pay your debts, creditors can get a court order to garnish your wages, but what if your income comes from Social Security? The answer is that it depends on the kind of debt.

For most types of debt, including credit cards, medical bills, and personal loans, Social Security cannot be garnished to pay the debt. If you owe money to a creditor, the creditor can go to court and get an order to take money from your bank account. If your Social Security check is directly deposited in the bank, the bank is required to protect Social Security benefits from garnishment. When a creditor tries to freeze a debtor’s bank account, the bank is required to look at the debtor’s previous two months of transactions to determine if the debtor received any Social Security benefits by direct deposit. For example, if you receive $1,500 a month in Social Security, the bank is required to allow you to use up to $3,000 in your account.

If you receive a Social Security check and deposit it in the bank yourself, the bank can freeze the entire amount in the account. You would be required to go to court and prove the money in the account came from Social Security.

There are certain debts, however, that Social Security can be garnished to pay for. Those debts include federal taxes, federal student loans, child support and alimony, victim restitution, and other federal debts. If you owe federal taxes, 15 percent of your Social Security check can be used to pay your debt, no matter how much money is left.

For student loans and other non-tax debts, the government can take 15 percent of your Social Security check as long as the remaining balance doesn’t drop below $750. There is no statute of limitations on student loan debt, so it doesn’t matter how long ago the debt occurred.  (In fact, student loan debt may be the next crisis facing elderly Americans. In 2015, bills were introduced in the House and Senate, HR 3967 and S 2387, to stop the government from garnishing the wages of elderly and disabled Social Security recipients.)

The rules for child support and alimony vary depending on the law in your state. The maximum amount that can be garnished is 50 percent of your Social Security benefit if you support another child, 60 percent if you don’t support another child, or 65 percent if the support is more than 12 weeks in arrears.

These rules do not apply to Supplemental Security Income (SSI). SSI is protected from garnishment even if the creditor can garnish regular Social Security. Social Security Disability Insurance can be garnished in the same way that Social Security is garnished.

If you feel your Social Security is being improperly garnished, contact your lawyer. 

For more information about Social Security, go here: http://www.elderlawanswers.com/social-security.

Read more
Posted by The Grodberg Law Firm, LLC | no comments
February 8

Medicaid Applicant Entitled to Additional Time to Provide Documentation

An administrative law judge in New Jersey rules that a disabled Medicaid applicant is entitled to additional time to provide documentation to support his application and that the Medicaid agency is required to assist him. R.P. v. Division of Medical Assistance (N.J. Office of Administrative Law, No. HMA 3127-15, Jan. 15, 2016).

R.P. entered a nursing home and applied for Medicaid benefits. Due to a dementia diagnosis, R.P. was unable to assist with the Medicaid application. The state denied the application for failure to provide required documentation.

R.P. filed a second application. The state denied the application again for the same reason, and R.P. appealed, requesting a hearing. R.P.’s attorney claimed that she attempted to obtain the necessary information, but that it was difficult without R.P.’s assistance. She argued R.P. needed additional time.

The administrative law judge (ALJ) rules that R.P. was entitled to additional time to provide the necessary information for the application. According to the ALJ, the regulation requiring applications to be filed in a timely manner was “not intended to be a tool to administratively or procedurally dismiss applications for disabled applicants.” The ALJ also rules that the Medicaid agency should assist R.P. in acquiring the necessary documents.

For the full text of this decision, click here. 

For a summary of the ruling by New Jersey ElderLawAnswers member attorney Donald D. Vanarelli, click here.

Read more
Posted by The Grodberg Law Firm, LLC | no comments
February 4

Medicaid Applicant’s Ability to Occupy House in an Irrevocable Trust Means Trust Is Available Asset

A Massachusetts trial court rules that a Medicaid applicant’s irrevocable trust is an available asset because he retained the right to use and occupy the property that was placed in the trust. Nadeau v. Thorn (Mass. Super. Ct., No. 14-DV-02278C, Dec. 30, 2015).

In 2001, Lionel Nadeau and his wife created an irrevocable trust and transferred their house into the trust. The trust provided that the Nadeaus had the right to use and occupy the house, which they did until Mr. Nadeau entered a nursing home. In 2014, Mr. Nadeau applied for Medicaid benefits. The state considered the trust a countable asset and denied benefits.

Mr. Nadeau appealed. The state affirmed denial of benefits, ruling that the trust was an available asset because he was able to use the property in the trust during his lifetime. Mr. Nadeau appealed to court, arguing that his home could not be considered available unless the trust gave him a right to some sort of payment.

The Massachusetts Superior Court affirms, holding that the trust is an available asset. The court rules that while state regulations may require an asset in an irrevocable trust to be both available and payable, federal regulations in the form of Transmittal 64 provide that payment may include non-cash disbursements, including the right to use and occupy real property.

For the full text of this decision, click here.

Read more
Posted by The Grodberg Law Firm, LLC | no comments
NEWER OLDER 1 2