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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11577
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Was off (RIF) in November 2014. Received a severance check

Customer Question

Was laid off (RIF) in November 2014. Received a severance check and a small bonus ($20,000 total) in January of 2015. Applied for social security retirement benefits after receiving the check. Received first SSI check in May of 2015. Asked social security representative if the severance check would count toward the earned income limit. Was told no. July 2016 received notice of overpayment due to too much earned income in 2015. Submitted SSA-131 form (Employer Report Of Special Wage Payment). Was denied. Resubmitted and was denied again with the explanation that bonuses and severance do not count as special payments even though it is clearly listed on the form as such and explanations and examples on the SocialSecurity.gov website clearly state it as such also. Social Security demands payment of $2100 back and will take it out of my Social Security until it is paid. Do I have a case against Social Security.
JA: Because employment law varies from place to place, can you tell me what state this is in?
Customer: New Mexico
JA: Has anything been filed or reported?
Customer: Social Security is will be taking the amount from my social security check until it is paid.
JA: When we are ready I'll take you to the appropriate web page.
Customer: go
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 9 days ago.
Category: Tax
Expert:  Lane replied 9 days ago.

Hi. Yes you do.

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You need to appeal this. There are four levels of appeals.

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1. Request for Reconsideration

2. Administrative Law Judge (ALJ) Hearing

3. Appeals Council

4. Federal Court Review

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You may also want to take the appropriate section of the POMS manual with you (Social Security's Program Operations Manual System). This will typically make them listen.

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The clerks on the front lines at SSA (it seems more and more) love to say no. My firm believes it's in the culture. (Could also be an individual's need to have power over others).

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Perseverance is the key here.

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Here's the SSA Publication on this: https://www.ssa.gov/pubs/EN-05-10063.pdf

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From there:

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"If you worked for wages, income received after retirement counts as a special payment if the last task you did to earn the payment was completed before you stopped working. Some special payments to employees include bonuses, accumulated vacation or sick pay, severance pay, back pay, standby pay, sales commissions, and retirement payments. Another example of a special payment is deferred compensation reported on a W-2 form for one year, but earned in a previous year. These amounts may be on your W-2 in the box labeled Nonqualified Plan.

Expert:  Lane replied 9 days ago.

Here's the section of the POMS manual that applies: https://secure.ssa.gov/poms.nsf/lnx/0302510016 Things have become so bad at Social Security that my firm ALWAYS has the client take the POMS manual to meetings

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Please let me know if you have ANY questions at all, before rating me.

I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content.

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Thank you!

Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice to clients on three continents since 1986.