Oh dear, my client is getting a big lump sum retroactive award from SSA!
An attorney asks:
I am seeking guidance for a client who is potentially subject to back pay from SSA. If a person is not able to spend down the funds is there a best way to move money out of their name to protect benefits? Would we consider a 1st party SNT or ABLE account in this scenario?
Any guidance would be greatly appreciated.
Our response based on 50 years of experience: Don’t do anything for about 6-8 months. The retroactive award (also called an “underpayment” by SSA) is not counted for 9 months following the month the claimant receives the retroactive award.
SSA policy is found in POMS SI 01130.600 Retroactive Supplemental Security Income (SSI) and Retirement, Survivors and Disability (RSDI) Payments:
B. Policy
The unspent portion of retroactive SSI and RSDI benefits received on or after 3/2/04 is excluded from resources for the 9 calendar months following the month in which the individual receives the benefits.
I find that most of my clients have spent the money long before the 9 months are up. Therefore, to avoid charging an attorney fee for an SNT or for helping to get the client into an ABLE account now, just wait until the 8th month before doing any special needs planning.