Seniors to get depleted social security checks

sara

Government may soon pass a new law which could result in depleted social security checks for senior citizens and disabled who've defaulted on their home loans or other debts. Earlier, social security payments could not be garnished to recover debts that are delinquent for more than ten years.

However, the 2008 Farm Bill lifted the 10 year statute of limitations on the ability of the government to withhold social security benefits in collecting debts other than student loans and income taxes. Thus, if a person has defaulted on a small-business loan in 1996, and is now receiving social security could be notified that his benefits may be reduced until the debt, with interest, fees, and penalties are paid off. But again, the Treasury can withhold 15% of the benefit. However, the benefit cannot be reduced below $750.

If the new legislation is passed, then it would allow the Treasury's Financial Management Service to collect debts regardless of age. It will increase the collection of $10 million per year in delinquent federal non-tax debt.

I feel that the new legislation is coming at a challenging time for senior citizens as they are already facing the mortgage woes, pension cuts and increased medical costs. Though the new law will apply to debtors of all ages, social security recipients will face most of the brunt.

smckaybiz · Posted: Wed Mar 10, 2010 3:49 pm Post subject:

That's horrible. It's like they are asking people to file for bankruptcy because that is the only other way around having to pay those debts off.

Being that I am only 30 I am just planning on there not being any Social Security left by the time I retire. Heck with the way our Govt is spending money SS will be gone all together in the next few years!!!

gmakerley · Posted: Thu Mar 11, 2010 10:21 pm Post subject:

scott, at least you'll have the opportunity over the next 30-40 years to establish your own retirement stash, and if it's managed well enough, you'll be set for your old age.

social security sure doesn't seem like it's going to be around that long based on what's happening now, so you better get prepared i guess.

you better start investing for that boy of yours, too, so that he's not broke before his time.

jerry · Posted: Fri Mar 12, 2010 3:19 am Post subject:

Hi all,

This new legislation is not at all welcome at least at this point in time when the seniors are already battling other issues. The medical costs have risen, pensions have been cut down and on top of that delinquencies and foreclosures have been haunting the seniors for quite some time now. Depleted Social Security checks at such a time would push the seniors into further trouble.

I often come across queries by seniors who are in financial difficulty and their major source of income is the Social Security checks they receive. Many elderly borrowers make payments towards their mortgage using the Social Security income in order to stay current on the mortgage to avoid foreclosure. Now, if the Social Security checks are withheld by the Govt., these homeowners will unfortunately be left with no home of their own soon.

Thanks,

Jerry

sirivalli · Joined: 13 Mar 2010 Posts: 1 1.24 Dollars($)

The social security sector has once again been shaken. Allowing the appeal by the European Commission, the Advocate-General of the EC Court of Justice, Juliane Kokott, recommends cancelling the inscription of several allowances in an annex to Regulation 674/2005 of 13 April 2005 (ruling of 3 May, Case C-299/05). This decision has the practical consequence of renderinga exportable' the benefits concerned: Finnish child care allowances, Swedish invalidity benefits and care allowances for handicapped children, British allowances for the handicapped and for their assistance.

[External links deleted as per forum rules. Thanks.]

gmakerley · Posted: Tue Mar 16, 2010 10:23 am Post subject:

let's keep in mind that the previous post, by "sirivalli" affects people in Europe and not in the United States. we recognize that this is an international forum, but the vast majority of members, posters, etc. are within the US borders.

hopefully, the information above isn't going to be confusing to many.

riseabove · Joined: 09 Nov 2009 Posts: 264 9.21 Dollars($)

I've got to say that while in some ways this sort of equalising legislation can be seen as "fair" in terms of treating everyone the same, it has massive potential to increase poverty amoung a segment of the population which has little ability to increase it's earning capacity. Not a step in the right direction I think.

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