Social Security Checks May Get Smaller

[TruthBringer]

Defaulted Loans May Haunt Seniors

by Ellen E. Schultz

Monday, March 8, 2010



A little–noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old.

Social Security benefits are off–limits to creditors, such as credit–card companies and banks. But the U.S. can collect debts to federal agencies by "offsetting," or withholding Social Security and disability payments.

The Treasury currently withholds benefits of 3.1 million Social Security recipients to recover defaulted student–, farm– and small–business loans, unpaid income taxes, amounts veterans owe for health care, and other debts to the government.

Previously, the U.S. hasn't been able to withhold Social Security payments to recover most debts delinquent for more than ten years.

But a provision in the 2008 Farm Bill lifted the ten–year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans—for which the statute of limitations was lifted in 1997—and income taxes, where the limit remains 10 years.



This means that a person who defaulted on a small–business loan in 1995, for example, and who is receiving Social Security could be notified that his benefits may be reduced each month until the debt, with interest, fees, and penalties, is paid. The Treasury can withhold 15% of the benefit, though it can't be reduced to below $750. Tax debts have no floor.

The change will add more than $6 billion to the $75 billion in delinquent debt individuals owe the government, according to the Financial Management Service, the Treasury's debt collection unit.

A Treasury spokesman says the new legislation "allows Treasury's Financial Management Service to collect older debts and levels the playing field so that all eligible debts, regardless of age, are subject to debt collection. Treasury expects this legislation will result in increased collections of $10 million per year in delinquent federal non–tax debt."

Though no one argues that people shouldn't repay their debts, the change is coming at a challenging time for older Americans already pinched by mortgage woes, pension cuts and spiraling medical costs.

The shift applies to debtors of all ages, but Social Security recipients will bear much of the brunt. A Wall Street Journal analysis of Treasury Department data shows that Social Security recipients comprise a large and growing percentage of people from whom the Treasury recovers debts.

For years, most debt the Treasury collected through its "Offset Program," came from withholding income–tax refunds. But with an aging population and growing unemployment, roughly 10% of the $4.3 billion in debts collected by the Treasury came from Social Security benefits in 2008, the latest figures available. That's up from 1.6% in 2001, according to Journal computations that the Treasury confirms.

Though the law has expanded the age of debts that can be recovered, it hasn't addressed the sometimes–Kafkaesque process debtors can face when challenging the validity of a claim.

Consider the predicament of Dr. Robert Steinberg, the founder of Scharffen Berger chocolates, who spent more than six years and thousands of dollars in legal fees appealing the Social Security Administration's claim that he owed it more than $28,000.

Dr. Steinberg received disability benefits in the early 1990s while undergoing chemotherapy for lymphoma, a condition that ultimately claimed his life. Dr. Steinberg returned to work sporadically at a free clinic before co–founding the chocolate company.

Year later, the Social Security Administration notified Dr. Steinberg he was overpaid in the 1990s. In May 2002, with the matter still unresolved, the agency turned the debt over to the Treasury for collection.

In Oct. 2002, administrative law judge Gary Lee found that the Social Security Administration had never established the amount of the overpayment; had dismissed an earlier appeal "for spurious reasons"; had misinformed Dr. Steinberg and mishandled his later appeals; and had lost his file. He noted that Dr. Steinberg was "without fault," and told the agency to stop its collections efforts.

Dr. Steinberg died in 2008, at 61. His lawyer, Peter Young, a former staff attorney for the Social Security Administration, has handled more than 100 overpayment cases, "very few of which were accurate," he says. "Most people can't find or afford help, and give up very quickly and end up with painful offsets on a fixed budget."

An agency spokeswoman says mistakes can happen, but "over all, the process works."

A Treasury spokesman says the new regulations require agencies seeking to recover debts more than a decade old to give debtors the right to review and copy their files, make payment arrangements, and apply for disability and hardship waivers.

But a recent dispute about a student loan shows that even with these rights, a person challenging an old debt can face hurdles similar to homeowners in foreclosure trying to modify a loan that has been resold.

In 2003, the U.S. began withholding $173 a month in Social Security benefits from Annie Brown, a paralyzed 75–year–old widow living in a nursing home to repay a defaulted $8,823 student loan the Education Department says she took out in 1989. The offset reduced Mrs. Brown's benefit to about $980 a month.

Mrs. Brown said a granddaughter had forged her signature on a loan application. Her daughter and a lawyer spent more than four years disputing the debt with the owner of the loan, United Student Aid Funds, a student–loan guarantor that also was acting as one of the Education Department's 21 debt collectors. USA Funds itself farms out various debt–collection activities to others, which it did in Mrs. Brown's case.

Between 2003 and 2008, Mrs. Brown's daughter and Lynn Drysdale, a legal–aid lawyer in Jacksonville, Fla., corresponded numerous times with USA Funds and two other debt–collection companies it hired. One letter from USA Funds warned that unless documents were received "within 30 days from the date this letter was generated...your case will be closed." The letter was undated. Another letter required Mrs. Brown to refer to an attached document. There was no attachment. "I don't know how a lay person could maneuver through this process," says Ms. Drysdale. "Nobody seemed to know what was needed."

In 2007, USA Funds denied Mrs. Brown's claim, citing a recently passed federal rule requiring people claiming identity theft on student loans to obtain a criminal court verdict of the crime. That was impossible for Mrs. Brown; a statute of limitations for bringing a case had passed years earlier. In any case, she wasn't alleging identity theft, but forgery.

Robert Murray, a spokesman for USA Funds, agrees that Mrs. Brown's signature was forged. "It's absolutely a forgery," he says, "It should never have been made."

But he says that USA Funds couldn't discharge the loan as a forgery because Mrs. Brown didn't return a required form in 2005, and that USA Funds must rigorously defend claims. "There are borrowers who want to get out of a legitimate debt," he says. "By the same token, we want to work with individuals who have a legitimate issue."

Ms. Drysdale, the legal–aid lawyer, finally sought to obtain a disability waiver for her client. That process took more than a year, and was achieved only after Ms. Drysdale asked for help from the Social Security Administration's ombudsman, who declined to comment.

In August 2009, the Education Department agreed that Mrs. Brown is permanently disabled, and discharged her obligation to repay the loan she never took out. The Treasury returned her withheld benefits in December.

http://finance.yahoo.com/retirement/art ... e-planning

[TruthBringer]

For some fun and to pass a little time I thought we could all play a game (those who like jeopardy should really like this one). So here I've got a little trivia for you all......

Ok first question: What kind of government steals money from it's sick and elderly citizens who are unable to pay their bills?.............................................................................................................................................................................................................................................................................................................................................................................................................................................Times up. Answer: The United States government.

Second question: What kind of government gives trillions of dollars to it's major banks and corporations and gives not even a fraction of that to it's people?.......................................................................................................................................................................................................................................................................................................................................................................................................................................................................Times up. Answer: The United States government.

[TruthBringer]

lol. I can see it now:

John over at the treasury department: "We're finally sticking it to those old bastards Bill. I've been waiting a long time for this."

Bill over at the treasury department: "Better watch John, I hear those wheelchairs are better built these days to handle the streets and it would only take them a little while to wheel over here."

John over at the treasury department: "Ha ha ha ha."

(Bill and John share a kodak moment with a high 5)

[TruthBringer]

Part 3 of the trivia game:

Third question: Who is currently running the show in the United States of America?

No answer will be provided on this one, but I will give you guys some clues. It's not the American people. It's not Obama. And it's not the congress......

[TruthBringer]

For those who are thinking that the answer is the U.S. Department of the Treasury....you are getting warmer. But ask yourself this, the U.S. Department of the Treasury is a branch off of what organization? Figure that answer out and you will have solved the third question of this trivia game.

[TruthBringer]

What I don't think governments understand is this:

Before a currency system was put in place in nearly every single country of the World, there were only two material things that all Human Beings would cling to with their lives, and would die to protect, and they were 1. Food and 2. Water.

However, since the creation of currency systems across the globe, and the implementation of same for so many centuries, and the adaption of the Human race thereof, I believe that there has been a type of evolution in the Human psyche, and that Money has now become the third thing on that list.

The newest form of currency is of course paper currency. But no matter what the type, it does not matter, the Human psyche has already imprinted the fantasy into itself that money is just as important as food and water, because after so much time of using money to achieve food and water, the Human psyche views all 3 of those items as the same, or being connected, or being related. And therefore it has become almost a Human instinct to protect money in the same way that we protect our food and water.

Therefore, I seriously, seriously don't think the governments of the World have begun to understand how much they are playing with fire when they attempt to take away a nation of people's money (especially those nations who have already adapted to and gotten so used to having an easier time of getting it). In the same way that a dog has a higher chance of biting it's owner if it's owner attempts to take it's food away while it is eating, the Human psyche has also developed a sense of protection over it's paper currency even more so than the currencies of the past, not only because of the fact that it is currently the way that we achieve our sustenance on this planet (by purchasing things from grocery stores, etc.), which is an instinct that every living creature has (the instinct to sustain itself through whatever means necessary - which in our current situation is through our paper money), but also because of all the extra goodies that the people of wealthy nations have been able to achieve because of it as an extra bonus. That's a double whammy on the Human psyche for the people of those nations. And that only adds to the anger of watching that type of power slip away.

So when I say that the government of the United States has not even begun to understand how angry the people of the United States will become if more of their money is taken away from them (which in their subconscious minds = less food and less water), I mean that in the highest sense possible. In the old days it was "if you want to infuriate a nation of people, take away their food and water" has transformed since then into "If you want to stir up a nation of people, take away their ability to purchase food and water (by taking away their paper currency)". The ironic part about this is that the very federal government of the United States that wants to take away more of it's citizen's money/sustenance, is also the same organization that has caused it's people to become so angry at the thought of losing of it, because they are the very organization that introduced it to the people in the first place!

But I don't think the government understands just how enraged the American people will truly get when they realize they won't be able to buy their food and water as easily as before if the government goes ahead and starts stealing money from the social security coffers and by increasing taxes on American citizens. The first to get angry of course are going to be the seniors and the disabled. But sooner or later just about every single faction of the American people is going to join in on the anger, and when that happens, ohh boy, they are all going to look to the same source which is causing their problems to release their pent up frustration on, and when that happens.....all I can say to the federal government is......Run. Run because you have created a monster, and as is the case with all monsters that have been created, it's only a matter of time before it's master loses control over it. And unless the creator of that monster (in this case the federal government of the United States) is able to destroy, or restrain that monster (in this case the American people) before it is able to destroy that creator, then that creator is doomed to suffer defeat from the very thing it has created. And my friends, you all know this is true, and so does the federal government of the United States, is that in the case of this monster (The American people as a whole), it is just too big to be destroyed, and too powerful to be restrained.

Simply put, by taking away the American people's money in an extremely obvious fashion, the United States federal government is setting in motion the cause of it's own demise. And I have to admit, I never thought they would be so stupid as to make it plainly obvious to the eyes of even the most loyal American citizens. This truly has to be one of the dumbest things the government has ever attempted to do, and the fact is that it is already too late, because the Avalanche has already begun.

[Steev]

Of course, the Fed being at the root of it all. Pulling the strings of government.

It was once said: He who has the gold makes the rules.

Of course the gold standard was removed sometime ago, subsequently:

He who has a monopoly on control of the existing fiat money supply, makes the rules. :sneaky:

And the vast majority of people all dancing to their tune. :guitarist

Playing the game, albeit begrudgingly, out of ignorance & fear.

Just how they likes it.

Understandably though, as they also have a monopoly on lowering the boom, so to speak on non conformers via law & enforcement.

Religion, playing on our sense of spirituality, instilling guilt & dividing the people. The crown/finance & the military. The three arms of power ever growing, strengthening their grip.

No time to continue living in denial here.

Things are not going to improve on their own.

Pretty tough to baulk at the imposed serfdom individually as few have done so successfully.

It's imperative that the masses wise up to this stuff, unite & react.

Nothing good comes easily. There IS a way to stop this insanity.

Peaceful non conformity. Rightfully reclaiming our sovereign status.

Unifying. Just don't play their game.

Hope lies in the fact that there IS power in numbers.

Slaving daily, settling for less. :-5

Is that our destiny? I think not.

[Oscar Namechange]

Come to England. Benifit cheques get bigger by the day,:(