James Michael Ratcliffe Attorney at Law
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Elderly impacted by changes to law 

Debt collectors can tap some seniors’ Social Security funds

By Paul Curtis 

LIHU‘E — There was a time not so long ago when senior citizens’ Social Security income was protected against the prying fingers of private debt collectors, Lihu‘e attorney J. Michael Ratcliffe said.
But now if the Social Security monthly direct deposits don’t go into an account specifically set up to receive such payments and no other payments, they are fair game for private debt collectors, who win court judgments, garnish or lien accounts, and settle debts at the expense of seniors, he said.
Before, only the federal government, going after those with unpaid federal taxes, student loans and child-support payments, could get to Social Security income in private accounts, Ratcliffe said in an interview this week.
“Banks have a couple of problems over here,” allowing private debt collectors to attach themselves to senior citizens’ accounts that “intermingle” sources of revenues including Social Security, pensions,
food stamps and other direct-deposit and regular payments, he said.
“Once it’s intermingled they can go after it,” he said of accounts receiving multiple sources of other regular revenue in addition to Social Security payments.
But there is an out for seniors. They can “articulate” that Social Security checks are all that’s going into certain accounts, thereby keeping private debt collectors at bay and away from those certain, Social Security-specific accounts, Ratcliffe said.
“That should make it protected again,” he said.
It’s a problem now, he said, estimating that 70 percent of all senior citizens’ accounts that had been protected by federal rules prohibiting garnishment or liens on Social Security funds are finding they are unprotected because of the intermingling of other sources of revenues into the same accounts.
“What you do is protect your asset,” he said.
Ratcliffe is managing attorney of the Senior Law Program on the campus of St. Michael & All Angels’ Church at the intersection of Hardy, ‘Umi and Pauole streets in Lihu‘e.
This is just one issue to be discussed at the 25th annual Senior Law Day, from 8 a.m. to noon, Friday, at the War Memorial Convention Hall on Hardy Street in Lihu‘e.
In addition to Ratcliffe, fellow senior law attorney Jim Pietsch, who teaches at the University of Hawai‘i-Manoa schools of law and medicine, will discuss pertinent issues relating to senior citizens and the law.
Registration can be accomplished in person the morning of the event. It is sponsored in part by the county Agency on Elderly Affairs. There is a charge. Call 246-8868 for more information.
Pietsch and Ratcliffe will discuss elderly care and dependent issues, the Social Security situation, living wills and end-of-life care directives, and other legal issues pertinent to seniors.
Ratcliffe, who has been managing director of the Senior Law Program on Kaua‘i for many years, said his practice more recently has turned “more aggressive” and “defensive,” with large numbers of cases where children are trying to defraud their parents out of their homes, money and savings.
His goal is “trying to keep seniors in control,” but the attacks aren’t just coming from greedy children, he said.
Another change in federal law that states are being forced to comply with involves what used to be the sanctity of the family home. Things used to be that the value of the home as primary residence was excluded from the list of senior assets for the purposes of determining who meets state low-income criteria for the purposes of long-term care eligibility, Ratcliffe said.
In other words, if seniors were judged low income and needed long-term care, the state would pay, and not look at the home as an asset for the purposes of determining income eligibility for the long-term care program.
The only exception was if the home was part of a trust, he said.
“House used to be an excluded asset, period,” he said.
That has changed as a result of 2006 federal legislation that is now being enforced, with states forced to comply, he said. Now, a cap of $500,000 to $750,000 is in place as maximum value of a house and the land it sits on as an asset for the purposes of determining income eligibility for state long-term-care payments, he said.
And if seniors aren’t full-time residents in said homes, the homes are considered additional assets that need to be liquidated to help pay for the owner’s long-term care, Ratcliffe said.
Other hot-button issues to be discussed Friday are living wills, advanced-care directives, and do-not-resuscitate documents, with “compelling arguments” on both sides of the advanced-care-directive debate, and states passing versions of assisted-suicide legislation that failed last time it was proposed in Hawaii.
“The right-to-lifers and right-to-doers” both have compelling, real-life arguments of miracles and nearly unspeakable suffering, and there was a feeling a few years ago away from making changes in end-of-life laws, he said.
“The battle for saving usable lives is still as impassioned as ever,” with younger doctors, especially, not always seeing death as a bad thing. “Death isn’t one of the villains in some cultures,” but is “neutral, a part of life,” he said.
Younger doctors seem to be wanting to make some sort of peace with death and end-of-life issues, wishing the ends of lives to be “comfortable, meaningful, non-traumatic.”
Other things have changed, too, like several years ago Ratcliffe said he didn’t see nearly as many do-not-resuscitate orders as he does today. He rarely handles orders for life to be preserved under any and all circumstances.
Ratcliffe said he sees the current state dependent-adult law as essentially toothless, and sees cases where local elderly residents know their caregivers are abusing them or stealing from them.
But they don’t blow the whistle on the caregivers, who may or may not be family members, because the seniors are worried that saying something might lead the caregivers to separate from the seniors, leaving them all alone, he said.