Tag Archives: Allsup

Social Security Disability Insurance Recipients Need Better Understanding of Pros and Cons of New Debit Card, Allsup Says


Belleville, IL (Vocus) March 27, 2008

Starting next month Social Security Disability Insurance recipients in some states will have the option of receiving their benefit payments electronically on a debit card, rather than via a paper check. However, eligible individuals — many of whom are “unbanked” — should have a clear understanding of the pros and cons of opting for the debit card, particularly the financial ramifications, according to Allsup (http://www.allsup.com), which represents tens of thousands of people in the Social Security Disability Insurance (SSDI) process each year. It also offers services that support the financial and health well-being of individuals with disabilities.

“Before signing on to or totally dismissing the idea of the debit card program, potential cardholders should look at how they are likely to use a card,” said Paul Gada, personal financial planning director of the Allsup Disability Life Planning Center. “For some, the card may make sense. For others, they may realize after looking at their spending habits that getting a bank account may really be the best option. And there will be others that will always operate with cash only, regardless of the drawbacks it presents.”

The debit card program, called Direct Express, is run by the U.S. Treasury Department through Comerica Bank with the intent to encourage Social Security recipients who do not have a bank account to elect to have their benefits loaded electronically onto a debit card. The Direct Express program will be introduced this spring in Arkansas, Louisiana, Oklahoma and Texas before being phased in across the nation during the summer.

The cost savings for the government could be significant, based on estimates from the Treasury’s Financial Management Service. For example, it cost 89 cents for the government to issue a paper check in 2006 compared with 9 cents to process an electronic payment. As a result, if the 4 million recipients of Social Security, SSDI and Supplemental Security Income (SSI) who don’t have bank accounts were to sign up for the debit card, the savings could be $ 44 million annually.

Having monthly benefits electronically deposited onto debit cards also has its advantages for recipients, most notably convenience and security. In the case of individuals with disabilities who may have limited mobility, for example, having the debit card would mean that they would not have to make a special trip to cash their SSDI award or be concerned if they were hospitalized or otherwise unable to retrieve their benefit payment when it was due to arrive. Additionally, funds on the card are FDIC insured, just like money in a bank account, so the money is fully protected if the card is lost or stolen; though a card replacement fee will be assessed the second time a card needs to be replaced in any given year.

Evaluating the Costs

While cost savings for the government — and taxpayers — are obvious, the cost savings may not be as clear-cut for debit-card recipients. They might end up paying even more in transaction fees than the average $ 6 to have a paper check cashed, especially if they don’t pay attention to how they’re using the debit card.

Among the questions Gada recommends potential cardholders consider before signing up for a debit card include:

Social Security Disability Insurance Recipients Need Better Understanding of Pros and Cons of New Debit Card, Allsup Says


Belleville, Ill. (Vocus) June 10, 2008

The nationwide rollout has begun and Social Security Disability Insurance (SSDI) recipients in some states already have the option of receiving their benefit payments electronically on a debit card, rather than via a paper check. However, eligible individuals many of whom are unbanked should have a clear understanding of the pros and cons of opting for the debit card, particularly the financial ramifications, according to Allsup, which represents tens of thousands of people in the SSDI process each year. It also offers services that support the financial and health well-being of individuals with disabilities.

Before signing on to or totally dismissing the idea of the debit card program, potential cardholders should look at how they are likely to use a card, said Paul Gada, personal financial planning director of the Allsup Disability Life Planning Center. ”For some, the card may make sense. For others, they may realize after looking at their spending habits that getting a bank account may really be the best option. And there will be others that will always operate with cash only, regardless of the drawbacks it presents.”

The debit MasterCard program, called Direct Express, is run by the U.S. Treasury Department through Comerica Bank with the intent to encourage Social Security recipients who do not have a bank account to elect to have their benefits loaded electronically onto a debit card. Direct Express has been introduced in 10 states: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Texas. The rest of the nation will be phased in throughout the summer.

Cost savings for the government could be significant, based on estimates from the Treasurys Financial Management Service. For example, it cost 89 cents to issue a paper check in 2006 compared with 9 cents to process an electronic payment. If the 4 million recipients of Social Security, SSDI and Supplemental Security Income (SSI) who dont have bank accounts signed up for debit cards, the savings could be $ 44 million annually.

Having monthly benefits electronically deposited onto debit cards also has its advantages for recipients, most notably convenience and security. For example, people with limited mobility who have the debit card would not have to make a special trip to cash their SSDI check or be concerned if they were hospitalized or otherwise unable to retrieve their benefit payment. Funds on the card are FDIC insured, just like money in a bank account, so the money is fully protected if the card is lost or stolen, although there will be a fee the second time a card needs to be replaced in any given year.

Evaluating the Costs

While cost savings for the government and taxpayers are obvious, it may not be as clear-cut for debit-card recipients. They may pay even more in transaction fees than the average six dollars to have a paper check cashed, especially if they dont pay attention to how theyre using the debit card.

The following questions are among those that Gada recommends before signing up for a debit card:

How accessible to you is an ATM in the Comerica network?
How often would you make ATM withdrawals and would they be at in- or out-of-network ATMs?
How often would you use the electronic bill payment feature?
Will the companies you are paying electronically charge you a fee for electronic payment?
Is there a bank in your area that could provide you with a more cost-effective solution for the features you want, such as ATM, electronic bill pay or direct debit?
If you are concerned about opening a bank account, have you spoken with a local bank to see if they can help alleviate your concerns?
Social Security recipients participating in the Direct Express program are allowed one free ATM cash withdrawal per month from a designated ATM. They are assessed a 90-cent fee for each additional ATM withdrawal. Cardholders may be charged an additional surcharge fee by ATM owners outside of the Comerica Bank network, which issues the debit cards. Additionally, program participants have access to online bill payment for a fee of 50 cents per online bill payment and can receive a paper statement for a 75-cent monthly fee.

Gada advises potential cardholders to consider how they would use the debit card. For example, rather than having to pay for a cashier check or carry large amounts of cash and pay bills in person, incurring a small transaction fee for electronic bill payment may be worth it, particularly for individuals who have a difficult time getting around. However, Gada noted, individuals should check to see if the organization they are paying will assess an additional charge for accepting electronic bill payment.

On the other hand, people who are going to head for an ATM every time they need cash will find transaction fees quickly adding up to little added value.

”In these cases, its time to seriously consider what is preventing you from getting an account at your local bank, because that probably would be your best option,” said Gada. ”Many banks offer no minimum balance checking accounts where you can have your Social Security benefits direct deposited and electronically pay bills or use their ATMs at no additional charge.”

Overcoming Banking Barriers

One of the reasons that some Social Security recipients continue to insist on paper checks is the fear that their bank accounts could be attached by creditors. However, under federal law, Social Security benefit payments are protected from attachment, meaning creditors do not have the right to take these funds from a recipients bank account. The same rules will apply to funds placed on Direct Express debit cards. There are a few explicit exceptions to the rules guarding against attachment of Social Security benefits. For example, Social Security funds can be taken to pay child support or alimony payments the individual owes.

”At any given time, there are likely millions of dollars in Social Security payments that are at risk because people on fixed incomes got into debt or are having a dispute with a creditor,” said Gada. ”Unfortunately, they are acting on inaccurate information that has them afraid to put their money into bank accounts where it can be protected and they can be afforded other benefits of being banked.”

About Allsup

Allsup, Belleville, Ill., is a leading nationwide provider of financial and healthcare related services to people with disabilities. Founded in 1984, Allsup has helped more than 100,000 people receive their entitled Social Security Disability Insurance and Medicare benefits. Allsup employs more than 500 professionals who deliver services directly to consumers and their families, or through their employers and long-term disability insurance carriers.

For more information, visit http://www.Allsup.com .

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Income at Risk: Quarterly Unemployment Rate for People with Disabilities Climbs along with SSDI Claims, Reports Allsup


Belleville, Ill. (Vocus) October 26, 2010

During the third quarter of 2010, unemployment rates for people with disabilities climbed to their highest quarterly rate in a year and continued to outpace the unemployment rate for other workers, according to a quarterly study by Allsup, a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare plan selection services.

The Allsup Disability Study: Income at Risk shows that for the third quarter of 2010, people with disabilities experienced an unemployment rate 67.7 percent higher than people with no disabilities. Specifically, the unemployment rate for the third quarter averaged 15.6 percent for people with disabilities, compared to 9.3 percent for people with no disabilities, according to non-seasonally adjusted data from the U.S. Bureau of Labor Statistics.

The Allsup Disability Study: Income at Risk also shows that during the third quarter of 2010, the number of people with disabilities unable to work and applying for SSDI climbed to 764,902, an increase of 4.3 percent compared to third quarter 2009. Year-to-date, more than 2.25 million people have filed disability claims. Nearly 1.8 million SSDI claims are pending with an average cumulative wait time of more than 850 days, based on Allsups analysis of the Social Security disability backlog.

The number of people filing for disability claims has doubled compared to 2001, said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. Contributing factors include both the aging population and the high unemployment rate. Some people with disabilities are never able to return to work after a layoff.

According to Gada, people applying for SSDI need to understand the importance of acting quickly to secure benefits. Someone who is qualified needs to apply as soon as possible given the backlog and to ensure they meet certain qualification restrictions, Gada said. They also need to plan financially for what likely will be a significantly reduced income.

Understanding SSDI Benefits

People unable to work due to a severe disability need to understand the specific financial resources available to them — and their families — under the SSDI program. SSDI is a mandatory, tax-funded, federal insurance program designed to provide individuals with income if they are unable to work for 12 months or longer because of a severe disability, or if they have a terminal condition.

Individuals must have paid FICA taxes to be eligible. As a result, peoples SSDI benefits are calculated using their earnings history. Because someones work history varies depending on age and life experiences — benefits can vary widely by age and gender.

Allsup outlines the following considerations when planning for the financial future:


Regular monthly income: SSDI is a regular monthly payment and usually provides annual cost-of-living adjustment (COLA) increases (though none for 2010 or 2011).

In September, the average monthly benefit for a person qualifying for SSDI was approximately $ 1,066. But specific benefit amounts can vary greatly. For example, the average September monthly benefit for men was above average at $ 1,190, while womens monthly benefit was $ 929. Age also plays a significant factor as the chart shows below:

Age — Average Amount* (overall) — Average Amount* (male) — Average Amount* (female)

30 — $ 750 — $ 767 — $ 730

40 — $ 896 — $ 938 — $ 852

50 — $ 1,019 — $ 1,110 — $ 921

60 — $ 1,181 — $ 1,348 — $ 988

64 — $ 1,203 — $ 1,404 — $ 967

*Figures rounded to the nearest dollar.

Source: Social Security Administration, as of June 30, 2010

Spouse and dependent benefits: A spouse and dependents of someone receiving SSDI benefits also may be eligible for benefits. The average monthly benefit for a spouse in September was $ 287, with men receiving $ 239 on average, and women receiving $ 289 on average. To be eligible, the spouse (or former spouse if the marriage lasted at least 10 years) must have a child under age 16 or a child with disabilities, or be at least 62 years old. With regard to children, there are different categories of dependents and the payment amount varies. According to the SSA, the average September monthly benefit to a dependent child was $ 318.

Keep in mind that individuals can find an estimate of their benefits by examining their Social Security statement, which the Social Security Administration (SSA) mails out on an annual basis.

The SSA recently announced there will not be a COLA for a second consecutive year, so benefit amounts will continue to hold steady in 2011. There has been little fluctuation in the average monthly benefits since the start of 2009, Gada said.

In addition to monthly income and dependent benefits, SSDI also includes provisions for protecting future retirement benefits, the opportunity for extended COBRA benefits, eligibility for Medicare 24 months after a persons date of entitlement to SSDI cash benefits, as well as prescription drug coverage.

Its important that people apply as soon as they are eligible and make certain they are receiving all the benefits that apply in their circumstances, Gada emphasized.

If you have questions about SSDI eligibility for you or someone you know, please contact the Allsup Disability Evaluation Center at (800) 279-4357 for a free evaluation of your situation.

Allsup also provides free financial planning tools to help people better manage their finances while awaiting SSDI benefits at http://www.allsup.com/personal-finance . Medicare plan selection services also are available through the Allsup Medicare Advisor

Convincing Unbanked to Use Direct Deposit for Social Security Benefits May be a Challenge, Reports Allsup

Belleville, Ill. (Vocus/PRWEB) January 14, 2011

The U.S. Department of Treasury announced last month that eventually it will provide all federal benefits through direct deposit, including payments to more than 8 million workers receiving Social Security Disability Insurance (SSDI) benefits. Making certain recipients understand the costs and benefits of their choices is essential for a smooth transition, according to Allsup, a nationwide provider of http:// SSDI representation and Medicare plan selection services.

Effective May 1, 2011, paper checks no longer will be issued to individuals applying for benefits. Instead, applicants must choose either direct deposit into a bank or credit union account or deposit onto a Direct Express

Income at Risk: Unemployment Rates Rise Sharply for People with Disabilities, Allsup Finds


Belleville, Ill. (PRWEB) October 20, 2011

The unemployment rate for people with disabilities has climbed for the fourth consecutive quarter to reach the highest rate since tracking began in 2008, according to a study by Allsup, a nationwide provider of Social Security Disability Insurance (SSDI) representation and Medicare plan selection services.

The Allsup Disability Study: Income at Risk shows that people with disabilities experienced an unemployment rate more than 85 percent higher than the rate for people with no disabilities for the third quarter of 2011. Specifically, the unemployment rate averaged 16.3 percent for people with disabilities, compared with 8.8 percent for people with no disabilities. These figures are based on non-seasonally adjusted data from the U.S. Bureau of Labor Statistics. The quarterly rate hasnt been this high since reporting of the disability unemployment rate began in the fourth quarter of 2008.

The Allsup Disability Study: Income at Risk shows that 737,468 people with disabilities applied for SSDI during the third quarter of 2011, down 3 percent from the previous quarter. Year-to-date, nearly 2.22 million people have filed disability claims, compared with nearly 2.23 million applicants by the same time last year. Since the fourth quarter of 2007, when the recession began, more than 10.8 million people have applied for SSDI. Nearly 1.8 million SSDI claims are pending with an average cumulative wait time of more than 800 days, based on Allsups analysis of the Social Security disability backlog.

Disability applications have increased significantly over the past few years, said Paul Gada, personal financial planning director for the Allsup Disability Life Planning Center. The economy is one factor, with some people with disabilities never able to return to work after a layoff. Another factor is the aging population, with most baby boomers now in their late 40s to early 60s, Gada said. The average SSDI applicant is nearly 53 years old.

Some people with disabilities who are unable to work may put off applying for SSDI, and older individuals may simply wait to age into Social Security retirement benefits. Either of these actions, however, can result in a serious financial impact, both now and in the future.

People who are qualified need to understand the SSDI process, apply as soon as possible and prepare themselves and their families for the likelihood of living on a significantly reduced income, Gada cautioned.

Understanding Social Security Disability Benefits

SSDI is a mandatory, tax-funded federal insurance program providing individuals with financial resources if they are unable to work for 12 months or longer because of a severe disability, or if they have a terminal condition. Individuals must have paid FICA taxes to be eligible. Social Security disability benefits are calculated using the persons earnings history.

Allsup outlines several financial benefits to those who qualify for SSDI: