Everyone is waiting for the one-time $250 economic stimulus payment from Social Security. However, some seniors may have to give the money back!

Social Security beneficiaries received notices last month that they soon will be getting a $250 check courtesy of President Obama’s economic recovery package, but the administration did not say that some recipients may have to give part of it back.

The problem: Seniors who also work and qualify for Mr. Obama’s $400 Making Work Pay middle-class tax cuts may find themselves forced to give back some or all of the Social Security bonus come tax-filing time in 2010.

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The one-time payments that will be sent this month to millions of Social Security retirees and beneficiaries of other federal entitlement programs are part of a little-noticed provision in the $787 billion economic stimulus law approved by Congress in February.

But recipients who are still working full or part time to supplement their income may also qualify for Mr. Obama’s Making Work Pay tax cuts, targeting lower- to middle-income workers.

In the murky world of tax policy, the answer seems to be that they can’t fully benefit from both, and the “surplus” has to be sent back to the government.

If you are a working senior and you qualify for the “Making Work Pay” tax cut, don’t spend the $250 stimulus, just yet. It looks like you won’t really get to keep it.  Ouch!

via Obama tax breaks may trip up seniors – Washington Times.

Timegoesby has a post up about scams popping up to scam you out of your Social Security stimulus payments. 

Scam artists saw an opening and immediately began targeting consumers, including elders, to “help them qualify” for the payments. By email and on websites with official-sounding names, these criminals ask for payment or personal information including names, addresses, bank and credit card account numbers, etc. to do the paperwork for payment of the stimulus check.

These swindles are so widespread that the Federal Trade Commission, on 3 March, issued a warning which you can read at the FTC website.

Here is more information from that FTC warning:

E-mail messages may ask for bank account information so that the operators can deposit consumers’ share of the stimulus directly into their bank account. Instead, the scammers drain consumers’ accounts of money and disappear. Or bogus e-mail may appear to be from government agencies and ask for information to “verify” that you qualify for a payment. The scammers use that information to commit identity theft. Some e-mail scams don’t ask for information, but provide links to find out how to qualify for funds. By clicking on the links, consumers have downloaded malicious software or spyware that can be used to make them a victim of identity theft.

“Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive names or images of President Obama and Vice President Biden to suggest they are legitimate. They’re not,” says Eileen Harrington, Acting Director of the FTC’s Bureau of Consumer Protection. “Don’t fall for it. If you do, you’ll get scammed.”

Some sites suggest that for a small sum of money – as little as $1.99 in some cases – consumers can get a list of economic stimulus grants they can apply for. But two things can happen: the number of the credit card the consumer uses to pay the fee can fall into the hands of scam artists, or the $1.99 can be the down payment on a “negative option” agreement that may cost hundreds or thousands of dollars if the consumer does not cancel.

“Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorized charges and report the scam to the FTC,” Harrington said.

Do not get taken! If you are eligible for the Social Security stimulus payment, you do not have to do anything to to receive it.  Social Security will automatically issue the $250 payment starting in May 2009.  For more information about the one-time payment, check the Frequently Asked Questions page on the Social Security website.

I was recently asked if children who receive Social Security benefits are eligible for the one time $250 economic recovery stimulus payment.

Originally, it looked like the answer was “no.”  When this article was written in March 2009, the SSA FAQ said the following.

Question: Are children who receive Social Security benefits eligible for the one-time economic recovery payment?

Answer: No, children under the age of 18 (19 if still in high school) who receive Social Security benefits are NOT eligible for the one-time payment. However, disabled adult children will receive a payment. 

However, it was pointed out to me that children on Supplemental Security Income (SSI) are eligible for the economic recovery stimulus payment.

Question: Are children who receive SSI benefits eligible for the one-time economic recovery payment?

Answer: Yes, disabled children receiving SSI are eligible for the one-time payment.

Social Security Economic Recovery Payments page including FAQ.

Updated April 21, 2009.  Thanks for the tip Jen!

What is Social Security doing with its share of the economic stimulus? Building a huge data center, of course!

Using a hefty down payment from the newly signed economic stimulus law, the Social Security Administration has embarked on a $750 million project to replace its outmoded National Computer Center.

The agency received a total of $1 billion in the stimulus, with half to go toward the computer project and half for reducing a huge backlog in processing disability claims.

The injection of funds could result in hiring 5,000 to 6,000 workers in Baltimore and around the country, Michael J. Astrue, the commissioner of the Social Security Administration, said in an interview yesterday.

Read the entire article at The Baltimore Sun.com .

You may have already heard that part of the Obama’s stimulus package is a one time payment to recipients of Social Security.

The payment will be $250 and it was just revealed that everyone entitled to receive a payment should have it by late May 2009.

Social Security also revealed that if you are eligible for the one time payment, there is nothing you need to do. Social Security will automatically send you the payment.