If you didn't pay your taxes and got paid under the table, then your Social Security payments go down, or don't exist depending on how long you didn't pay taxes. You can fix this by amending your past tax returns and paying your taxes now. You're going to want to talk to a CPA and possibly a tax attorney for this. If you did pay taxes and it's not showing up on your earnings record, you need to bring a copy of your tax return to your local Social Security office. There's even a form for this. It can be found here. If you don't have a copy of your old tax return, the IRS does. Again, it's very simple, the more you pay in, the more you get back, so it's worth it to make sure that all the earnings numbers look correct.
The second thing you do is see if you can collect under anyone else's Social Security number. Under limited circumstances, you can collect benefits under a family member's Social Security number. If you are married, you can collect under your spouse's earnings once you turn 62. It's not as much as under your own number, but it's worth it to have Social Security crunch the numbers. You can collect under both your own number and your spouse's number. If your spouse has died, you can file for disability and get benefits under your spouse's number once you turn 50. You can file for retirement benefits once you turn 60. Even if you are divorced, you can file under your former spouse's benefits if you were married for more than ten years. For more information about spousal benefits, I have an additional blog post here.
An adult disabled child can file under a parent's earnings record if the parent is disabled, retired or dead. The only catch is the child has to be disabled before turning 22. If you have a child who you feel is going to be permanently disabled, it's worthwhile to try to have that child declared disabled before turning 22. That way when a parent retires (or dies or becomes disabled), the child can go right on the parent's earnings record and get more money without having to separately prove disability since the disability will have already been established before the child turned 22. While we can, and have, established disability before 22 at a later date, it's much more difficult. If nothing else, please keep lots of medical records to make it easier later on.
If you're filing for SSI benefits, which is need based, you can maximize your benefits as well. For SSI, you don't have to have ever paid FICA taxes into the Social Security system. For the Adult Disabled Child, this is the benefit that child would receive until the parent retires, dies or becomes disabled. SSI pays $730 a month. But because it is need based, Social Security prefers that the recipients be...needy. Therefore the claimant cannot have over $2000 in assets or $3000 if married. The claimant can also not receive more than $20 a month without the benefit being cut $1 for every $2 given. If the SSI recipient works, of course the SSI amount goes down. But it also goes down if the SSI recipient doesn't have to pay for rent or food. It's considered "in-kind support" and Social Security reduces the SSI earnings accordingly. If your child is living with you and not paying rent but receiving SSI, this may hinder benefits. Your child should be paying some form of rent and be paying for food.
If someone wants to give the SSI recipient money or leave money in a will, this needs to be addressed properly. SSI recipients can't have money of their own or benefits stop. If someone wants to have money in reserve for an SSI recipient "just in case of an emergency", it needs to be done in the form of a special needs trust. The special needs trust is a very specific trust for this situation where the SSI recipient has no control over the money but it can be used for his or her benefit. This sort of trust needs to be set up by an attorney who specializes in these trusts. A normal wills and trusts attorney is not the correct person to do this. It is much easier and cheaper to set it up properly the first time than risk losing benefits and the headache that comes with not having the trust set up correctly.
Finally, Social Security deducts premiums for Medicare automatically. If you have your own private insurance, make sure you opt out. The premium for 2015 is $104.90 a month. That adds up if you don't need Medicare.
The easiest thing to do to make sure you're getting the maximum benefit is to make an appointment with your local office and make sure you're receiving the correct amount. If you have an attorney, you can receive direction about whether you're leaving any money on the table. If you have any questions, please contact The Foster Law Firm at (480)621-7231.