If You Win Lottery, You Still Get Social Security
You know what today is - Lotto drawing day. That means you and I will be glued to the tube at 7 p.m. to learn whether we have won the $3 million and a ticket to our dreams.
For a lot of people this is a traumatic day: They suffer from the Worry of Winning.
That's right. These folks wonder:
Could I actually find ways to spend $3 million? And what about the tax man? Wouldn't he want more bucks? How much more? Will debt collectors come out of the woodwork? (Probably yes to all of the above.)
Those who suffer from the Worry of Winning visualize themselves having to hire CPAs, lawyers and others to untangle their escalating financial affairs.
And if they are senior citizens, they wonder whether they'll lose their Social Security checks. Even if they win $3 million, they still want that monthly check, no matter how small it might be. It's the principle of the thing, you know. After all, they earned that Social Security check for $334, $416. Or whatever sum.
And that brings us to Worrying of South Seattle.
"My question is financial: I live on my Social Security and Supplemental Security Income, and I receive Medicaid coupons.
"If I won the Lotto, would the state claim any monies that have been paid to me for my years on the `rolls'? Would I be able to claim any winnings?"
Well, Worrying, you can relax.
What government gets
If you win the Lotto tonight, you will get $150,000 for each of 20 years. However, you'll only see $108,000 each year. Uncle Sam's tax men scoop up 28 percent before you get yours. (Until last January, when the law changed, the tax men took 20 percent before winners received their checks.)
And you won't have to repay assistance you received when you were eligible.
But here are a couple of things for Worrying and other would-be-Lotto winners to ponder. If you owe child-support money to a former spouse, count on hearing from the Office of Support Enforcement in the state Department of Social and Health Services, should you win big bucks. And if you have been overpaid by some other arm of DSHS, you'll be asked to pay up. It's called "financial recovery."
When a player wins more than $600, the Washington State Lottery is required to notify DSHS, the state Employment Security Department and the state Department of Labor and Industries, says lottery spokesman Richard Paulson.
From September 1986 through May 1992, the lottery has wrung $229,263 out of winners for money owed DSHS and Employment Security.
Because Social Security is an entitlement program, that check is yours. But obviously lottery winnings could change eligibility for need-based programs, such as SSI or Medicaid. You would not be required to pay back assistance you received at your previous lower income level.
However, when your income changes, particularly if you have a whopping increase, state and federally-operated programs such as SSI and Medicaid expect you to notify them pronto. If you don't and assistance payments continue, you will be asked to pay back the money because you're no longer eligible.
If Worrying wins the lottery tonight, she probably won't have to worry about losing an SSI check, suggested Dan Ferrell, Social Security Administration spokesman.
And if she forgot to tell the government she no longer needed assistance and owed money because of overpayment, she could hire a limo and deliver her repayment check in style.
Paulson says not many retirees have won big sums in the lottery. For those who have, it's taken a while for the news to sink in. Most of us know when our next dental appointment is, Paulson says, but we don't think in terms of hundreds of thousands of dollars coming our way into the next century.
He's got that right!
Shelby Gilje's Troubleshooter column appears Wednesday and Sunday in the Scene section of The Times. Do you have a consumer problem? Write to Times Troubleshooter, P.O. Box 70, Seattle, WA 98111. Include copies, not originals, of documents indicating payment, guarantees, contracts and other relevant materials.
Copyright (c) 1993 Seattle Times Company, All Rights Reserved.