Under a 1994 federal law, (h.r. 1873 or public law 103-286), known as the Victims of Nazi Persecution Act of 1994, Holocaust compensation payments made to individuals based on their status as victims of Nazi persecution are excluded from being counted as income and resources in determining both eligibility for and the amount of benefits to be provided under any Federally funded program based on financial need. This means payments made to victims of Nazi persecution do not increase the countable income, and therefore do not increase the Medicaid "spend-down" of Holocaust survivors and other Nazi victims. Savings accumulated from reparations are not counted as resources. The same exemption applies to Supplemental Security Income, Food Stamps and Federally subsidized Housing programs.
More information is in this article and in this Fact Sheet.
On Dec 16, 2014, the Social Security Administration issued Emergency Message EM-14060 regarding “inherited reparations.” This policy instruction clarifies that reparations payments that are passed to a successor after the original recipient’s death continue to be excluded from income and resources for SSI purposes. Since Medicaid rules cannot be more strict than SSI rules for people age 65+, this policy, in NYLAG's view, must be followed by Medicaid programs as well. 42 U.S.C §§.1396a(a)(10)(C)(i)(III); 42 C.F.R. §§ 435.831(b), 435.845, 436.601. See news coverage in Jewish Week and the New York Observer about this policy clarification.
The Social Security Administration updated its online Program & Operations Manual (POMS) in TWO WAYS to ensure that the GHETTO PENSION or ZRBG does not reduce SSI or Social Security:
New Social Security Administration POMS clarifies Ghetto Pension is exempt from being counted for Income and Resources for SSI. The new and amended POMS are: SI 00830.710, SI 01130.610, SI 00830.711, and SI 01130.711. Since Medicaid budgeting methodology cannot be more strict than SSI for people age 65+, it is NYLAG's view that this new SSA POMS must be followed by Medicaid programs as well.
Download this FORM LETTER to inform the Social Security Administration (For SSI recipients) or local Medicaid office (for people who receive Medicaid but not SSI) about receipt of the Ghetto Pension. Note enclosures listed at the bottom you should attach.
"WEP" Reduction of Social Security -- New POMS clarify Ghetto Pension is exempt from the "WEP" reduction for Social Security retirement benefits. See amended POMS GN 00307.290
See NYLAG Advocacy Protects Social Security Benefits of Holocaust Survivors - describes problem. The SSA might mistakenly reduce SOCIAL SECURITY RETIREMENT benefits (not SSI) because of the German pension. Foreign pensions do sometimes cause a reduction in Social Security because otherwise there's a "windfall." This is called the Windfall Elimination Provision or WEP. But there should be no "windfall" offset if the pension is for work done before 1957. Of course the Ghetto Pension is for "work" in ghetto's done before 1957 - so should not be a basis for reducing Social Security.
See a sample of a Social Security notice reducing the retirement pension because of the "WEP."
See letter to the SSA Commissioner dated September 18,2014 from NYLAG requesting that procedures be clarified to say the Ghetto Pension and other restitution and German social insurance cannot be the basis for the WEP reduction.
See Letter from Acting Commissioner of the SSA dated Oct. 9. 2014 responding to NYLAG's Sept. 18, 2014 letter confirming that procedures will be issued to prevent erroneous reductions of Social Security Retirement benefits based on the German Ghetto Pension. Attached to the PDF are the procedures revised on Oct. 24, 2014 -- GN 00307.290 --see highlighted section that clarifies Ghetto Pension cannot be the basis for a WEP reduction. You can submit this PDF to the SSA office with a request for reconsideration if Social Security reduced.
The Conference on Material Claims Against Germany hosts a webpage with information about this important exception, with materials authored by Selfhelp Community Services, Inc., an organization that had its origins in assisting people fleeing from Nazi Germany in 1937.
* The Fact Sheet gives information about an important administrative hearing decision rendered in 2007 that clarifies proof needed to exempt accumulated savings when a Nazi victim applies for Medicaid. A redacted copy of this 2007 decision is posted here also described in this press release.
* A transfer of restitution does not trigger a "transfer penalty," so does not detrimentally impact eligibility for Medicaid to pay for nursing home care. See NYS Medicaid Reference Guide - Resources Chapter p. 441.
* The brochure also explains that EPIC, SCRIE, and other New York State-funded benefits, with no federal funding, do not count German reparations as income.
* Nov. 2017 update includes new information about a new restitution program started by the Polish government.
German Social Security and the Ghetto Pension
Ghetto Pension or ZRBG. The Ghetto Pension - formerly the German Pension for Work in Ghettos or ZBRG. -- was first issued in 1997 and then expanded in subsequent years, adding more ghettos and liberalizing eligibility after a 2009 decision of the highest German court. Consequently, more people will be receiving payments in 2014 and later. In October 2014, the SSA released new POMS sections that clarify that the Ghetto Pension is exempt from being counted for Income and Resources for SSI -- SI 00830.710, SI 01130.610, SI 00830.711, and SI 01130.711. These POMS followed the June 19, 2014 SSA Emergency Message SSA EM-14041.
Social Security beneficiaries who receive a Ghetto Pension may confront a different error by the SSA -- reducing their Social Security Retirement benefit because of the "Windfall Elimination Provision" (WEP). This is a different issue than the one described above involving reduction of SSI because of the Ghetto Pension. NYLAG brought this issue to the attention of the SSA. In October 2014, the SSA revised GN 00307.290 Evidence of Foreign Pensions and the Windfall Eliminatio... which specifically excludes the Ghetto Pension from being counted for WEP. By letter of October 9, 2014, the SSA made a commitment to correct its procedures to prevent these wrongful reductions. See this article - -- NYLAG Advocacy Protects Social Security Benefits of Holocaust Survivors.
Germany’s Ghetto Fund -- In 2007 the German government created a special fund (“Ghetto Fund”) to acknowledge, through a one-time humanitarian payment of 2,000 €, Jewish victims of Nazi persecution who worked in a Nazi Ghetto but were denied the ZRBG or German social security pension for voluntary and remunerated work. This lump-sum payment should be considered among the exempted Holocaust-related reparation payments. See this link on the Claims Conference’s website
Other Federal Benefits and Reparations -- An opinion letter from the Baltimore office of the U.S. Dept. of Housing & Urban Development, dated Jun 1, 2009, interprets the same exemption for Nazi reparations as it applies to an application by an elderly Holocaust survivor for Section 202 federally subsidized housing. She had purchased a house in 2004 with saved reparations. Under the usual rules, while the house would not disqualify her from being accepted as a tenant in Section 202 housing, interest on the house as an asset would normally be imputed to her. The opinion letter states that "reparation payments, their interest and assets, such as homes and bank accounts, should be excluded in calculating the income eligibility of Section 202 applicants." This letter might be useful for other federally funded benefits.
Taxes and Reparations -- See IRS News Release announcing exemption from income taxation enacted in 2001 Economic Growth and Tax Relief Reconciliation Act, Sec. 803. (News release includes actual text of law). This provision of the 2001 law originally had a "sunset clause," but was extended indefinitely under the the “Holocaust Restitution Tax Fairness Act of 2002” -- see this link. See also IRS Publication 525 (see page 31). Law exempts from income tax, in part, any payment or distribution to an individual (or his heirs or estate) which is payable by any foreign country, the United States of America, or any other foreign or domestic entity, by reason of the individual's status as an "eligible individual", defined as a "person who was persecuted on the basis of race, religion, physical or mental disability, or sexual orientation by Nazi Germany, any other Axis regime, or any other Nazi-controlled or Nazi-allied country.”
Bank Fee Waivers and Reparations -- certain banks have agreed to waive wire transfer fees for electronic receipt of reparations.
Online Training -- Watch our online training on Holocaust reparations and Medicaid -- CLE credit available.
This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.