Saturday, February 12, 2011

Social Security recipients need to act now!

In this mornings Call 12 for Action report, Social Security recipients now have more limited options. A new rule is on the books but you still have time to voice your opinion.

It used to be that you could apply for Social Security at say 62, receive a lower monthly benefit amount for years, then give all the money back in order to start receiving a higher monthly benefit amount. And better still you could do this without owing Uncle Sam any interest. Well, with no notice at all that rule has changed and it's causing big financial problems for some.

"I have received 15 checks."

Marshall Wozniak applied for monthly Social Security benefits last year at age 63. He only did it because he needed to show extra income on a mortgage application.

"I didn't spend a penny of it. I put every check in a savings account. I always intended to give the money back."

By eventually giving the money back to Uncle Sam, Marshall would get $400 more a month starting at age 66, $1000 more a month if he waited to age 70! Social Security recipients like Marshall could utilize this "payback" option several times in their lifetime and never owe a dime of interest.

"That is the only reason I applied, if that wasn't in place I would have waited."

And now it looks like Marshall should have waited because in December Social Security changed the rules. Now recipients can only use the "payback" option once in their lifetime and it must be within the first 12 months of when they start receiving benefits.

"And that cuts me out because I've been receiving checks for 15 months, so, I'm locked out for life."

That means Marshall, and many others like him, are now stuck with the lower monthly benefits that come from retiring early. And it's money Marshall doesn't even want right now.

"Our taxes will be higher, I may lose my VA health care, next year, because my income is higher."

But there's still hope. Social Security may reconsider this rule change at the end of a 60-day public comment period. Hundreds of recipients have already made their feelings known at Many are outraged that they received no notice of the change.

"I think the very minimum they should have done was send a letter, a mailing, to every social security recipient."

Social Security didn't send that letter but the government is giving consumers a voice during this public comment period. But, the public comment period ends AT MIDNIGHT TONIGHT (Monday, February 7th).

So, if you want to be heard on this issue, go to, click on PUBLIC SUBMISSIONS and type in the keyword: SSA-2009-0073.

This will take you to the page where you can post your comments about this rule change, but again you have to do it by midnight.

Marshall wanted to withdrawal his benefit before the change took place but changed his mind at the last minute. Then the rule change occurred and Marshall withdrew his application two days later. He is hoping Social Security will accept his withdrawal retroactive to before the change. We are working with the SSA on Marshall's case and will keep you posted on how things work out for him and many others in a similar situation.

by Dave Cherry Call 12 for Action - Feb. 7, 2011 04:58 AM

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