IRMAA life-changing events › Employer settlement payment
IRMAA and an employer settlement payment
You got a settlement payment from an employer or former employer because of its bankruptcy or reorganization. If that lowered your income, Social Security can set your IRMAA from the newer, lower year instead of your income from two years ago. You ask with Form SSA-44 and tick "Employer Settlement Payment".
Does it qualify?
Counts
- A payment from your employer's bankruptcy
- A payment from your employer's reorganization
Doesn't count
- A normal bonus
- A severance package
- A lawsuit award
Worked example: George, paid a one-time settlement in 2024
George's former employer went bankrupt. In November 2024 he received a $58,000 settlement payment from the bankruptcy. It pushed his 2024 income, the year used for his 2026 premium, into the fourth bracket.
| Income | MAGI | IRMAA a month |
|---|---|---|
| 2024 income (used now) | $178,000 | $385.00 |
| 2025 income (asked for) | $91,000 | $0.00 |
Saves $385.00 a month
Watch out: This only covers settlement payments from an employer's bankruptcy or reorganization.
Proof of the event: send one
- A letter from the employer explaining the payment and why it was made. It should name the bankruptcy or reorganization and the amount.
- Or the bankruptcy court or trustee papers showing your payment
You also need proof of income for the year in Step 2: a signed copy of your Form 1040 or an IRS transcript. For a year you haven't filed yet, your estimate on the form is enough for now.
Don't have it yet?
Check before you send
- Step 2 is a year after the settlement year. The year with the payment is the problem. Use the next year, when income was back to normal.
- It was a settlement from a bankruptcy or reorganization
- Your name and Social Security number are on every page
- You kept a full copy of everything you sent
Send it online after signing in to your my Social Security account, or to your local Social Security office. The Form SSA-44 guide walks through every step. If Social Security says no, see how to appeal IRMAA.
George would save $4,620.00 a year. The kit costs $49 once, with a filled SSA-44 for your exact event.
Everything you need to fill out Form SSA-44, prove your life-changing event, and stop paying a surcharge based on income you no longer have.
- SSA-44 walkthrough for all 8 life-changing events
- Evidence checklist for your event
- What gets rejected, and why
- Income estimate worksheet
- Plus 3 free bonuses, including the Printable SSA-44 Evidence Checklist
Secure checkout by Gumroad · Visa · Mastercard · Amex · PayPal
- Secure checkout by Gumroad
- Instant PDF download
- Checked against SSA.gov & CMS.gov
- 14-day money-back
Retiring after 65? Get both kits for $69 instead of $88. Save $19 with the bundle
The official forms are free from ssa.gov and cms.gov. The kit is the help filling them in and proving your case. See everything inside
The other life-changing events
- Retirement (work stoppage)
- Cutting back hours (work reduction)
- Divorce or annulment
- Death of a spouse
- Marriage
- Loss of income-producing property
- Loss of pension income
Questions people ask
Does employer settlement payment count as a life-changing event for IRMAA?
Yes. "Employer Settlement Payment" is one of the 8 life-changing events on Form SSA-44. You got a settlement payment from an employer or former employer because of its bankruptcy or reorganization. It lowers IRMAA only if your income dropped enough to move you to a lower bracket.
What proof do I need?
A letter from the employer explaining the payment and why it was made. Or the bankruptcy court or trustee papers showing your payment. You also need proof of income for the year in Step 2: a signed copy of your tax return or an IRS transcript, or your estimate for a year not filed yet.
What date goes in Step 1?
The month and year you received the payment.
Which tax year do I put in Step 2?
The first year with the lower income. It must be more recent than the year Social Security used, and not before the event. If this year (the premium year) will be lower than last year, use this year as an estimate.