While the possibility of a person losing their home to an explosion, fire, natural disaster or other accident is rather remote, people understandably don’t want to take any chances and will therefore go to great lengths to ensure that they have a sound homeowners’ insurance policy to protect them.
However, what if the unimaginable happens and a person loses their home? Can the insurance proceeds secured for the loss of the home potentially comprise their ability to secure much-needed Supplemental Security Income?
As it turns out, the answer may be yes.
Consider what happened to a Tennessee woman whose home burned to the ground more than a year-and-a-half ago, and who learned this past March that the SSI that she has come to rely upon to support herself for the last 15 years was suddenly being cut off.
According to reports, the woman and her now ex-husband split the proceeds from the homeowner’s insurance settlement check and decided to sell the land on which their house had sat for several decades. Unfortunately, this surplus of cash was viewed by Social Security officials as a violation of SSI rules, which expressly declare that recipients are not allowed to have resources exceeding $2,000, and resulted in the termination of her SSI.
This action was taken despite the fact that the woman documented all of her living expenses for over a year as requested by the Social Security Administration and the fact that almost all of the homeowner’s insurance settlement check — with the exception of less than $1,000 — went toward replacement costs.
Furthermore, the woman, who has suffered from a serious autoimmune disease since the mid-90s, was informed by the SSA that she owed the federal government over $85,000 in SSI overpayments.
As if this wasn’t disturbing enough, her appeal to have her SSI reinstated (which she pursued on her own) was denied, meaning she wouldn’t be able to apply for benefits until 2015.
Fortunately, a local news outlet caught wind of the story and contacted SSA officials to discuss how the woman stood to lose everything and have virtually no income. These efforts caused officials to concede that a mistake had been made and that the process to re-secure SSI for the woman could essentially start over.
While this particular case appears to be heading toward a satisfactory ending, it cannot be overlooked how the involvement of a legal professional may have helped considerably. In general, an experienced and dedicated attorney can help guide people through this complex process, and fight to secure the benefits they need and deserve.
Source: ABC-6, “Woman’s SSI checks cut off after house burns down,” Don Dare, Nov. 18, 2013