Almost everyone knows that the Social Security Administration (SSA) is a federal agency that issues monthly payments to older, retired workers. What some people may not know is that the SSA also issues monthly benefit checks to disabled persons under 62 years of age – who meet the SSA’s definition of disability – through the SSDI program and SSI programs.
If you are disabled in Southern California, you should be receiving disability benefits. If you are disabled and not receiving benefits, an experienced Los Angeles Social Security disability attorney can explain your disability rights and help you start receiving the monthly payments you deserve.
Right now, a disabled person may be entitled to more than a monthly SSI or SSDI payment. The Los Angeles Times recently explained that approximately 387,000 disabled workers in the United States qualify for student loan relief. Student loan borrowers who are insolvent and who meet the definition of disability can have their student loan obligations completely wiped away under federal law.
According to the Times, about 80 percent of those who qualify for student loan relief reported no income in 2014. Their median net worth is about $200, and the average balance on their student loans is $18,000.
However, only a small fraction of the 387,000 eligible disabled persons have taken advantage of the law giving them a right to student loan debt relief. Many of the eligible disabled persons may not know about the law. And about half of them are already in default, according to the Department of Education. But the most probable reason that so many disabled people are not taking advantage of this opportunity is the Internal Revenue Service (IRS).
WHAT IS THE IRS REQUIRING?
The IRS restricts student loan relief and requires student loan relief to be counted as income, so any disabled persons obtaining debt relief for student loans could find themselves with a huge tax obligation – and the Education Department’s discharge of a loan automatically triggers a notification to the Internal Revenue Service.
Nancy Altman, president of the group Social Security Works, told President Obama last year that the relief offered to disabled student loan borrowers could turn into a cruel joke. “Those totally and permanently disabled will simply owe money to a different agency of the government,” she explained in a letter to the White House.
At least one United States senator has called on the Internal Revenue Service to issue a no-action guideline for disabled student loan borrowers and has labeled the failure of the IRS to take action “inexplicable.” Even Department of Education Undersecretary Ted Mitchell said last year, “Americans with disabilities have a right to student loan relief. And we need to make it easier, not harder, for them to receive the benefits they are due.”
Those who qualify for student loan debt relief are the severely disabled. Their conditions are not likely to improve, and they are unlikely to land work which provides an income that qualifies as “substantial gainful activity,” that is, work that earns (as of 2017) $1,170 or more each month or $1,950 or more for blind persons. The Social Security Administration defines a “disability” as a condition that keeps someone from performing substantial gainful activity.
HAS THE IRS EVER MADE A SIMILAR RULE CHANGE?
Disabled persons who obtain a loan discharge but do not declare it on their federal income tax returns could forfeit their SSI or SSDI benefits as well as their eligibility for additional federal and state benefits or face liens on their bank accounts.
And the Internal Revenue Service could waste plenty of effort and resources trying to collect from disabled people who have no income and a net worth of about $200. But the IRS has changed the rules before – in 2015 – and in a similar situation.
Corinthian Colleges, Inc. was a for-profit, post-secondary educational company offering career-oriented diploma and degree programs in a number of fields. In 2015, Corinthian Colleges went out of business and filed a chapter 11 bankruptcy.
Students who took out student loans for courses at Corinthian Colleges received student loan forgiveness and income tax forgiveness all at once. As of June 2015, $171 million in federal student loan debt owed by over 11,000 Corinthian Colleges students had been forgiven.
Disabled persons who may qualify and benefit from student loan forgiveness are persons with no genuine likelihood of medical improvement or gainful employment. They are entitled to this assistance by law. The Department of Education and the Social Security Administration have done their part to help, so now the IRS needs to join them and help disabled borrowers receive the student loan debt forgiveness they are entitled to under federal law.
ARE YOU RECEIVING THE BENEFITS THAT ARE YOURS BY LAW?
While some disabled persons may not know that their student loans can be forgiven, others may not even be receiving basic SSDI or SSI benefits. Through SSDI and SSI, the Social Security Administration provides benefits to people who cannot engage in substantial gainful activity because of their physical or mental disability. Approximately twelve million disabled persons in the United States receive SSI or SSDI benefits, along with about two million children of disabled workers and about 160,000 spouses of disabled workers.
To receive SSI or SSDI benefits, a disabled person must be under retirement age and have a disability that is expected to last for more than a year. When a worker has paid enough into the Social Security trust fund, that worker is eligible for SSDI benefits if he or she becomes unable to work. If a disabled person has not paid enough into the Social Security trust fund, that individual may still be eligible to receive Supplemental Security Income (SSI) payments.
A Social Security disability lawyer can help disabled benefit applicants prepare and review all of the forms and paperwork necessary to apply for benefits. Obtaining and receiving monthly benefits requires a great deal of patience, and honestly, far too much time. Thus, if you need to start receiving disability benefits, get the help you need now.
An experienced Los Angeles Social Security disability attorney can help you get started, guide you through the process, and help you avoid the mistakes and misunderstandings that could lead to unnecessary delays in receiving your monthly SSI or SSDI benefits.