Industry Articles
Industry Articles Home > Stretching your Retirement Dollar News
|
Older people with debt could have Social Security benefits cut 2010-03-07 Older people who depend on Social Security income could see their benefit payments garnished in the future if they owed debt to federal agencies at any point in their lives. At present, the Wall Street Journal reported Monday, the Social Security Administration "offsets" the benefits of 3.1 million Social Security beneficiaries. Payments can be offset if a person has unpaid income taxes or had defaulted on student, business or farm loans. A provision in the Farm Bill of 2008 lifted the statute of limitations on the claims that federal agencies make against unpaid debt; prior to the bill's passage, only debts younger than 10 years could result in offsets to benefit payments. Now, though, debts of any age (except income taxes) can lead to Social Security offsets. As the Journal notes, the change in the law comes at a difficult time for many older people. Already, Social Security provides a substantial proportion of most retirees' income, and benefits were not increased for 2010 because the nation's economy contracted last year. It was the first time since 1975 that benefit payments didn't increase - and some older people could see their benefits cut if they have outstanding debt.  |
