Effective Dates: 02/23/2009 - Present Previous | Next

TN 3 (02-09)

HI 01120.030 Life Changing Event (LCE) – Work Stoppage

A. Policy

B. What Evidence is Needed to Support Use of a More Recent Taxable Year to Determine IRMAA

C. How to Process the Request

D. How to Record Evidence Provided on EVID Screens

 

A. Policy

A beneficiary may request and qualify for the use of a more recent tax year to determine IRMAA based on a reduction in MAGI after the beneficiary, the beneficiary's spouse or both stop working. Some examples would be retirement, lay-off, and/or sale of business or corporation. All LCE reports only apply to the reporting spouse. Do not extend the use of the more recent tax year to the non-reporting spouse. If the non-reporting spouse is also affected by the LCE, the non-reporting spouse is responsible for contacting SSA.

B. What Evidence is Needed to Support Use of a More Recent Taxable Year to Determine IRMAA

If the beneficiary alleges he or his spouse has a work stoppage that will significantly reduce his MAGI for the current tax year, SSA will need MAGI and tax filing status information for the tax year he is asking SSA to use and proof of the work stoppage.

A beneficiary may submit the following tax information:

  • •

    An estimate of MAGI and tax filing status for the tax year they are requesting SSA to use (current year or PY-1), or

  • •

    A signed copy of the PY-1 tax return (or a filed amended tax return with an IRS letter of receipt for PY-1) if PY-1 tax return shows a significant reduction in MAGI.

SSA will accept as proof of the work stoppage any evidence submitted by the beneficiary that clearly documents the event such as:

  • •

    A statement from an employer,

  • •

    A retirement letter,

  • •

    Corporate minutes,

  • •

    Record of business transfer or sale, or

  • •

    Beneficiary's attestation under penalty of perjury regarding the work stoppage or employment separation.

NOTE: 

If the beneficiary provides an estimate of MAGI, process the request using the estimate. Request the beneficiary to submit a signed copy of the tax return once it has been filed with the IRS. Once the filed tax return is received follow the procedures listed in HI 01120.065. If a beneficiary alleges electronic filing, ask the beneficiary to print and sign a copy of the electronic return. If a beneficiary is updating a MAGI estimate, follow the procedures listed in HI 01120.065.

C. How to Process the Request

If

Then

The beneficiary states that his work has stopped (or spouse's work has stopped, or both) and the stoppage resulted in a significant reduction in MAGI

  • •

    Evaluate the evidence of work stoppage.

    NOTE: 

    Accept the beneficiary's statement as proof of the stop in work. On the IRPP screen read the attestation statement and inform the beneficiary that they are attesting under penalty of perjury that they have had a stop in work that has caused a reduction in their MAGI.

  • •

    Obtain MAGI and tax filing status information from the beneficiary for the tax year to be used.

    NOTE: 

    Two separate premium year inputs are necessary with all LCEs.

  • •

    Access the IRMAA screens (See MSOM T2PE 008.001 through MSOM T2PE 008.019)

  • •

    On the IRMN screen

    • –

      Enter the Beneficiary's Own SSN.

    • –

      In the “Select the Desired Option” field select “1” Establish

    • –

      Input the premium year that the new initial determination request is for.

    • –

      In the “Select the Desired Function” field select “1” Life Changing Event

    • –

      Input the Tax Year the beneficiary requests we use to determine the IRMAA.

    • –

      Press Enter
​
  • •

    The PYTY screen appears when there is data on file for the tax year requested and it is displayed under the Highest Probative Value Data Field. (For an explanation of Highest Probative see MSOM T2PE 008.019.)

    • –

      If you select “1” Use Highest Probative Data, the system will process the determination using that data on file. The data will be propagated to the IRMA screen.

    • –

      If you select “2” New Tax Data, the system will process the determination using the new information provided as long as the value of the data is of higher value than the information on file.

    • –

      Press Enter.

  • •

    On the IRLC screen

    • –

      In the “Select Life Changing Event” Field select “5” Work Stopped.

    • –

      In the “Date of Life Changing Event” field enter the date of the work stop (Month and Year)

    • –

      Show Proof as “1” Proven

    • –

      Record the beneficiary statement on the remarks line

    • –

      Press Enter

  • •

    On the IRMA screen

    • –

      Input the beneficiary's alleged adjusted gross income and tax exempt interest for the tax year the beneficiary is requesting to use. NOTE: If selection “1” Use Highest Probative Data on the PYTY was selected, the information will be propagated and cannot be changed.

    • –

      On the “Select Type” field select the appropriate tax source based on the information provided by the beneficiary. See MSOM T2PE 008.005.

    • –

      On the “Select Filing Status” field enter the appropriate filing status for the beneficiary.

    • –

      Show Proof as “1” Proven

    • –

      Press Enter.

The IRRE Screen will display the current and recalculated IRMAA data. The “New Determination Results” field will provide the determination based on the information entered.

  • •

    The IRMN Screen will display an alert to go to the EVID screen to document proofs submitted for the event reported. Pressing any “PF” key or the “Enter” key from the IRMN screen, will take you to the Shared Processes Menu.

  • •

    Record any evidence provided on the EVID screen in Shared Processes (See GN 00301.286 through GN 00301.300 and MSOM EVID 001.003). See HI 01120.030D.

 

D. How to Record Evidence Provided on EVID Screens

If

Then

The beneficiary provides a statement or letter from an employer.
  • •

    Access the EVID screen in Shared Processes (See GN 00301.286 through GN 00301.300 and MSOM EVID 001.003).

  • •

    Select “OTHER” as the document submitted as proof.

  • •

    The letter should state the date of work stoppage. Record that date as the “Document Event Date.”

  • •

    For “Issuance/Recordation Date” show “Y.”

  • •

    For “Date Issued” show the date on the letter from the employer.

  • •

    For Document Type enter: Letter from employer.

  • •

    For “Place Document Created” show the city and state of the employer.

  • •

    On the “Comment” line enter: name of the employer (do not abbreviate)-type of work stoppage -employee: name of beneficiary or spouse.

    EXAMPLE - Social Security Administration-retirement-John Q Public

The beneficiary provides corporate minutes.

  • •

    Access the EVID screen in Shared Processes (See GN 00301.286 through GN 00301.300 and MSOM EVID 001.003).

  • •

    Select “Other” as the document submitted as proof.

  • •

    For the “Document Event Date” show the date of the change (this should be in the minutes).

  • •

    For “Issuance/Recordation Date” show “Y.”

  • •

    For the “Date Recorded” show the date the minutes were recorded.

  • •

    On the “Document Type” line, enter: Corporate Minutes.

  • •

    For the “City and State” show the City and State of the employer

  • •

    On the Comment Line enter: Corporation Name (do not abbreviate) work stop-employee name (document any verbiage used in the letter that states the stop).

    EXAMPLE - ABC Corporation work stop-John Public-retirement effective 050507. Jan Smith, vice president new president.

The beneficiary provides record of business transfer (Self-Employment).
  • •

    Access the EVID screen in Shared Processes (See GN 00301.286 through GN 00301.300 and MSOM EVID 001.003).

  • •

    Select “Self Employment” as the document submitted as proof.

  • •

    For the “Document Event Date” show the date of the sale or transfer.

  • •

    If the document has a recordation date or issuance date show as appropriate.

  • •

    For the “Document Type” enter: Record of Sale or Record of transfer (whichever is appropriate).

  • •

    On the “Comment” Line enter: Sale or transfer (whichever is appropriate) business name from name to name.

    EXAMPLE - Sale, We R Cooks from John Public to Susie Que.

 

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0601120030
HI 01120.030 - Life Changing Event (LCE) – Work Stoppage - 02/23/2009
Batch run: 10/15/2012
Rev:02/23/2009