Disability portion of SSA benefits (SSDI) will be removed from the FPLP 15% Levy for Past Due Tax Assessments

This is really confusing folks! On the one hand those of us who follow closely generally tend to believe that there is a LOT of rampant fraud in SSI Disability benefits practices these days but this news is going to really hurt a LOT of good people legitimately on SSI Disability that happen to have been issued a federal tax lien as it is being so abruptly and clumsily introduced.

It is difficult to not confuse SSI (supplemental security income) and SSDI (social security disability insurance).

SSI, administered by the Social Security Administration (SSA), is funded by the US Treasury general fund.

SSDI, also administered by the SSA, is paid from the Social Security Trust Fund.

In a memo from the US Treasury dated October 6th 2015, Phyllis Brown, Director – Collection Inventory Delivery and Selection of the US Treasury announced a recent policy shift to exclude SSA disability insurance payments from the Federal Payment Levy Program (FPLP) effective for payouts after October 3rd 2015.

This means that the disability portion of SSA benefits (SSDI) will be removed from the FPLP 15% Levy. It does not mean that SSA benefits being paid to persons without a disability, and subject to FPLP will be levied at 100%. It is generally believed that straight SSA-1099 benefits should still continue to be subject to the 15% (FPLP) Levy.

FPLP has levy authority per IRC 6331(h)of15% of Social Security Administration benefit payments under Title II of the Social Security Act including Federal Old Age, Survivors and Disability Insurance (OASDI) benefits.SSI has never been subject to the 15% FPLP.

The Bureau of the Fiscal Service (BFS) completed programming to exclude this type of payment as of 10/3/15. Internal Revenue Manual (IRM), Collection, Notice of Levy, Automated Levy Programs, FPLP, will be updated to incorporate this change.

If you want to make your concerns heard, they’ve made Kristi Darby, Tax Analyst, the sacrificial lamb. She can be reached at at 816-291-9705 or