Effective July 1, 2013 Social Security recipients with medical conditions not likely to improve, i.e. those that art Totally Permanently Disabled (TDP) can use their Social Security Disability status as proof of their disability. While this is certainly good news for disabled individuals with Student Loan Debt, there may be tax implications for persons who utilize this procedure outside of Bankruptcy, including to potential for imputed income due to Debt Forgiveness. The issues and Key Features noted in the Federal Register Indicate:
“Allows for acceptance of an SSA disability notice or award for Social Security Disability Insurance or Supplemental Security Income benefits as proof of a borrower’s TPD
if the notice indicates that the SSA will review the borrower’s continuing eligibility for benefits once every five to seven years, thus indicating that the borrower’s disability is
in the medical improvement not expected category. The borrower would still be subject to the three-year post discharge monitoring period.”
A full copy of the new regulations are available at Federal Register/Vol 77, No. 212/Thursday, November 1, 2012/Rules and regulations
