Social Security Switching to All-Electronic Payment System

Social Security Switching to All-Electronic Payment System

No more paper checks in the mail. Starting March 1, nearly everyone who receives Social Security must switch to the government's new electronic payment system. Beneficiaries will be able to have their checks directly deposited into their bank account or put on to a debit card.

The government is switching to electronic payments in order to save money and to provide a more reliable method of delivering payments. The move to paperless payments will save the government close to $1 billion dollars over the next 10 years. It also eliminates the problem of checks that get lost in the mail or are delayed due bad weather.

Currently, around 93 percent of payments are made electronically, but about 5 million checks are still being mailed each month. If you are among those who haven't converted to electronic payments, the following are your options:

You can have the checks deposited directly into your bank account. This option allows flexibility with withdrawals and you will be subject to the bank fees and limits you already have in place.


If you can't afford a regular checking or savings account, you may be able to open a special low-cost bank account called an electronic transfer account (ETA). ETA fees are low and you are allowed four free withdrawals a month. However, not a lot of banks have joined the ETA program.

You can have your payment put on a Direct Express debit card. The debit card does carry some additional fees if you are planning to withdraw cash. You get one free withdrawal a month and then a $0.90 fee (or more depending on the bank) applies every time you make a subsequent withdrawal that month. You can also use the card like a MasterCard to make purchases directly without fees.

Some individuals are exempted from the requirement to switch to paperless payments. If you are over age 90, live in a remote area that doesn't have electronic payment options, or have a mental impairment that doesn't allow you to manage finances, you may not have to switch to an electronic payment system.

To make the switch, call 1-800-333-1795 or visit www.GoDirect.org.


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The Law Offices of Jeremy W. Howe, LTD. are ElderLaw attorneys in Rhode Island who specialize in wills and trusts, estate planning, guardianship, probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for family law issues such as divorce, child custody and visitation, support, and military family law.

Call them today at 401-841-5700 or visit them on the web at http://www.CounselFirst.com.

Social Security Benefits to Edge Up 1.7 Percent

Social Security COLA Going Up

The nation's elderly and disabled Social Security recipients will receive a 1.7 percent increase in payments in 2013. This is expected to raise the average monthly payment for the typical retired worker by $21.  The increase is less than half of last year’s 3.6 percent  cost-of-living adjustment (COLA).

In any case, the modest rise will be partially offset by Medicare's premium increases for 2013, which will be announced soon.  Most Medicare recipients have their premiums deducted from their Social Security payments.  The same COLA will apply to pensions for federal government retirees and most veterans.

“While this modest increase will help, much of the COLA will be consumed by health care and prescription costs, which continually outpace inflation," said Nancy LeaMond, executive vice president of AARP.  "Every day, retirees and other beneficiaries struggling to make ends meet still feel like they’re falling further behind.”

The COLA by the Numbers

Starting in January 2013, the average monthly Social Security retirement payment will rise from $1,240 to $1,261 a month for individuals and from $2,014 to $2,048 for couples. The 1.7 percent increase will apply to both elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits.  The maximum Social Security benefit for a worker retiring at full retirement age, which is age 66 for those born between 1943 and 1954, will be $2,533 a month.

Social Security COLA also raises the maximum amount of earnings subject to Social Security taxation to $113,700 from $110,100.  This means that those earning incomes above $113,700 will pay no tax on any income above that threshold.

The COLA increases the amount early retirees can earn without seeing a cut in their Social Security checks.  Although there is no limit on outside earnings beginning the month an individual attains full retirement age, those who choose to begin receiving Social Security benefits before their full retirement age may have their benefits reduced, depending on how much other income they earn.

Early beneficiaries who will reach their full retirement age after 2013 may now earn $15,120 a year before Social Security payments are reduced by $1 for every $2 earned above the limit. Those early beneficiaries who will attain their full retirement age in 2013 will have their benefits reduced $1 for every $3 earned if their income exceeds $40,080 in the months prior to the month they reach their full retirement age.

For 2013, the monthly federal Supplemental Security Income (SSI) payment standard will be $710 for an individual and $1,066 for a couple.

You can find more links and information on our newsletter HERE.
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The Law Offices of Jeremy W. Howe, LTD. are ElderLaw attorneys in Rhode Island who specialize in wills and trusts, estate planning, guardianship, probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for family law issues such as divorce, child custody and visitation, support, and military family law.

Call them today at 401-841-5700 or visit them on the web at http://www.CounselFirst.com.

RI Division of Taxation Announces Estate Tax Changes

Rhode Island Estate Tax Threshold Increased

The Rhode Island Division of Taxation has announced that the estate tax threshold for the estates of decedents dying in 2012 will be increased to $892,865.  This is a 3.9% increase over the current threshold of $859,350.

Rhode Island state law requires that the threshold amount be adjusted each January, based on annual inflation, compounded annually, and rounded to the nearest $5 increment.

Generally speaking, for a person dying in 2012, his or her net taxable estate, if valued at $892,865 or less, will not be subject to Rhode Island’s estate tax.  Rhode Island’s General Laws Chapter 44-22 provides full details on the computation of the estate tax, including such factors as the marital and charitable deductions.
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The Law Offices of Jeremy W. Howe, LTD. are Elder Law Attorneys in Newport, Rhode Island who specialize in Wills and Trusts, Estate Planning, Guardianship, Probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for Family Law issues such as divorce, child custody and visitation, support, and Military Family Law.

Call them today at 401-841-5700 or visit them on the web at http://www.counselfirst.com

Social Security - Some Surprise Benefits

Social Security News

We are all generally aware of how Social Security works but when we assist in estate planning for clients there are many things to consider, especially if the client has been divorced. A few of the considerations follow:

• A widow or widower, at full retirement age or older, receives 100 percent of the worker’s basic benefit amount
• A divorced spouse of a worker who dies could get benefits just the same as a widower if the marriage lasted 10 years
• Note: remarriage can end the deceased spousal or former spousal benefits
• In one-earner families, the working spouse can “claim and suspend benefits” so that at full retirement age, he or she continues to work and “claims” benefits, then “suspends” benefits, which enables the non-working spouse to receive a spousal benefit
• In two-earner families, a surprising result can occur. If one worker takes social security at full retirement age (now 66 years old), that spouse can receive the monthly benefit and can continue working with no penalty. At full retirement age, his or her spouse can receive an amount equal to 50% of the spouse’s monthly benefit each month without affecting his or her ability to continue to work until age 70 at which time he or she can receive a substantially higher amount per month due to “delayed retirement credits.”
• A bigger surprise is that a former spouse (not remarried, where the marriage was at least ten years) at full retirement age can also receive an amount equal to 50% of the former spouse’s monthly benefit each month without affecting his or her ability to continue to work until age 70.

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The Law Offices of Jeremy W. Howe, LTD. are ElderLaw attorneys in Rhode Island who specialize in Wills and Trusts, Estate Planning, Guardianship, Probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for Family Law issues such as Divorce, Child Custody and Visitation, Support, and Military Family Law. 

Call them today at 401-841-5700 or visit them on the web at http://www.CounselFirst.com.

Newport RI Elder Law Attorneys and Social Security Online

APPLY FOR SOCIAL SECURITY ONLINE!

According to ElderLawNews Weekly, there are $10,000 applicants for social security benefits every day. The Social Security administration has set up a user-friendly website. To apply for benefits, go to www.socialsecurity.gov and click on “Applying Online for Retirement Benefits.”

[disclaimer: We forward this monthly elderlaw newsletter each month to educate and inform our clients and friends. The fact that we have delivered it does not substitute for legal advice since most elderlaw advice is case-specific. We also do not agree with all of the information and opinions contained in the newsletter. For example, we found that a recent article describing assisted living facilities and family use of such facilities did not conform with our experience in Rhode Island.]

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The Law Offices of Jeremy W. Howe, LTD. are ElderLaw attorneys in Rhode Island who specialize in Wills and Trusts, Estate Planning, Guardianship, Probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for Family Law issues such as Divorce, Child Custody and Visitation, Support, and Military Family Law. 

Call them today at 401-841-5700 or visit them on the web at http://www.CounselFirst.com.