Harry Gross: Ethical to get Social Security benefits and take buyout, too?

DEAR HARRY: My wife is 53 and has a history of mental problems dating back 20 years or more. She is bipolar. Early this year, we decided that she could no longer hold a job, so she went on disability at her workplace. We applied for permanent disability benefits at Social Security a short time later. The benefits were granted. During this period, she never notified her employer that she would not be returning to work. Her first check from S.S. came in August. About the same time, her employer was offering buyouts for employees as an inducement to retire early. Because of her longevity as an employee, that money is substantial. Is she allowed to accept the buyout?

WHAT HARRY SAYS: That's a tough one. You have an ethical as well as a financial dilemma. There are several choices. You could repay S.S. for the money she received and withdraw the disability request. She would then request the benefit in a new application after she took the buyout. She could keep the S.S. money and accept the buyout. This carries the financial risk of being discovered by either S.S. or her employer, and is an ethical lapse. She could forget the buyout with no repercussions. It is obvious to me that she cannot ethically accept both amounts. The buyout seems to be very substantial, so that leaves us with returning the S.S. money, taking the buyout, and reapplying for the disability at some later date. Good luck!