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Making Employment Work: Creating Financial Independence Through Work Incentives

Making Employment Work: Creating Financial Independence Through Work Incentives. Lauren Horner Program Director Maryland Benefits Counseling Network. Housekeeping - Evaluations/Assessment. Please complete your evaluations before leaving today!

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Making Employment Work: Creating Financial Independence Through Work Incentives

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  1. Making Employment Work: Creating Financial Independence Through Work Incentives Lauren Horner Program Director Maryland Benefits Counseling Network

  2. Housekeeping - Evaluations/Assessment • Please complete your evaluations before leaving today! • You will receive an email with the link and password to complete your training assessment. • You will be given 2 attempts to score at least 80% in order to pass. • CEUs/COPs will be mailed to the address provided after a passing score is obtained. • Be sure to dedicate time for your assessment. If you leave the assessment page once started, you will NOT be able to log back in where you left off and will need to start all over again.

  3. Why is Work Important? • Employment allows beneficiaries to move towards financial independence. • Employment helps in the recovery process, increasing self-respect, dignity and self-worth • Employment creates contributing members of society. Improving the economy and community as a whole. • Employment offers the opportunity to develop new skills and to grow a successful employment record.

  4. What Benefits Questions Do You Hear? How many hours can I work and not lose my SSA benefits? How will this job affect my SSA benefits? Will I lose my medical assistance if I work? What about my Medicare?? Can I get my benefits back if I can’t continue to work?

  5. FACT or FICTION? “I can keep my benefits as long as I am working part-time not full-time.” FICTION – Depends on the type of benefit received and the amount of someone’s actual earnings. “As soon as I start to work, I will lose my benefits.” FICTION – It is very possible to work and keep benefits. “ “I can work up to 20 hours per week and keep my benefits.” FICTION – Again, depends on the type of benefit received and the amount of someone’s actual earnings. “I can work for 9 months without my benefit changing.” FACT – For SSDI Beneficiaries! FICTION – For SSI beneficiaries!.

  6. FACT or FICTION? “I don’t need to report my earnings; Social Security takes money from my paycheck and should know what I am making.” “My benefit cannot be changed or lost while I am in the Ticket to Work program.” FICTION – Social Security doesn’t know what you are earning each month unless you tell them. The taxes taken out are not a way of reporting. FICTION – Participation in the Ticket to Work program does not protect you from the rules on how working impacts benefits. • “Working can help me be financially better off – even if I lose my cash benefit.” FACT – Most individuals have more money by working, even it they’ve lost their SS benefit! Work Incentives education and Benefits Counseling is key!

  7. Why Benefits Education is Important • Myths and misconceptions about how working impacts benefits are overwhelming. • Social Security is not a reliable source of accurate information. • Integrating benefits education and benefits counseling early on has been linked to: • Higher employment success rates • Less employment turnover • Higher earning rates.

  8. Difference Between Medicaid & Medicare • Medicaid • A state-run program that provides hospital and medical coverage for people with low income and little or no resources. • aka Medical Assistance (MA) • Receive with SSI • Managed Care and Fee-for-Service • Will cover Medicare premiums • Apply for Medicaid at DSS or online at mydhrbenefits.gov or marylandhealthconnection.gov • Medicare • Health insurance program for people age 65 or older, certain individual’s with disabilities and those who have permanent kidney failure or Lou Gehrig’s disease. • Receive with Title II benefits • There are 4 parts • Part A – Hospital Coverage • Part B – Medical Insurance • Part C – Supplemental Medicare Advantage • Part D – Prescription • Apply for Medicare through SSA

  9. Employed Individuals with Disabilities (EID) • State of Maryland’s Medicaid Buy-In Program • Provides Medicaid for a fee to people with disabilities who work and would ordinarily have incomes and/or resources above limits for other Medicaid programs • Recipients may be charged a small premium for enrollment (between $0-$55 per month)

  10. Employed Individuals with Disabilities (EID) • Eligibility Requirements • Must meet SSA’s disability definition (does not necessarily need to receive SSA disability benefits) • Be between 18 – 64 years old • Be working for pay (employed or self-employed) • Meet income limits ($37,470 individual or $50,730 married) • Have resources below $10,000 individual or $15,000 married • Be a U.S. citizen or qualified alien • To apply, submit a paper application to the Eligibility Determination Division (EDD): • https://mmcp.health.maryland.gov/eid/pages/home.aspx

  11. Title II: SSDI, CDB, DWB • A federal disability insurance program that provides benefits to individuals with disabilities who are insured by workers' contributions to the Social Security trust fund. • Title II pays benefits to eligible individuals and certain members of his/her family if he/she worked long enough and paid Social Security taxes. • There are 3 different types of Title II disability benefits that someone could receive.

  12. Title II: SSDI, CDB, DWB • Social Security Disability Insurance (SSDI) - An individual is a former worker, has achieved “insured status” and has become disabled • Childhood Disability Beneficiary (CDB) - An individual is a disabled adult child of a worker who has retired, became disabled, or who is deceased. The disabled adult child must: • Be at least 18 years old • Have become disabled before age 22 • Be the child (or in some cases the grandchild) of a former worker who is eligible for Social Security retirement benefits or SSDI, or who is deceased • Disabled Widows/Widowers (DWB) - An individual is a widow(er) age 50 or older that is disabled and has not remarried before age 60 • All must meet Social Security’s definition of Disabled • There is no resource limit for Title II benefits

  13. So What Happens to Title II Benefits When Someone Starts Working?! • For any month gross earnings are below a benchmark of $850, benefit is paid in full and no change occurs. • Once earnings exceed the benchmark, a series of phases with different rules and work incentive protections apply: • Phase 1 - Trial Work Period (TWP) • Phase 2 - Extended Period of Eligibility (EPE) • Phase 3 - Post EPE/Expedited Reinstatement (EXR)

  14. Phase 1 – Trial Work Period (TWP) • Individuals are allowed 9 months to work with no limit on earnings. • Any month gross earnings exceed $880 (benchmark) will count as 1 of the 9 TWP months. • This means these 9 months DO NOT need to occur consecutively. • During these 9 months the benefit amount is paid in full no matter how high the earnings. • Once a total of 9 months have been used, the TWP has ended. Individuals only get 1 Trial Work Period!

  15. TWP Scenario • Evan has been entitled to SSDI for six years. He started to work for the first time in April of 2018. He had a couple of breaks in his earnings. Evan’s earnings and TWP usage looks like this:

  16. TWP Exercise • Katie is entitled to SSDI benefits. In January 2018 she began working at a library earning $900.00 per month. Katie worked at the library for 6 months and then stopped working. • In October 2018 Katie began working again, this time at a local restaurant earning $1000 per month. She continues to work through December of 2019. • Use a SSDI Tracking Form to illustrate Katie’s earnings and TWP usage.

  17. Phase II – Extended Period of Eligibility (EPE) • Immediately following the 9th TWP month new rules apply! • Social Security will now compare monthly gross earnings to a monthly earnings limit known as Substantial Gainful Activity or SGA. • In 2019, SGA is $1,220 gross earnings per month (non blind); or • $2,040 gross per month (blind). • For each month earnings are below the SGA limit, benefit payment is made in full. • Benefit payments are also made during the first month earnings are above the SGA limit (after the TWP) and the two months immediately following (these are called the Grace Period). • Then payments are stopped or ‘suspended’. So what if work stops or earnings are reduced??!...

  18. Phase II – Extended Period of Eligibility (EPE) • Immediately following the TWP, a work incentive safety net called the Extended Period of Eligibility (EPE) begins. • The EPE is a safety net that enables benefit payments to start again very easily if work stops or earnings are reduced below the SGA limit. • Benefit payments can be restarted by contacting SSA, reporting the change, and providing proof. • The EPE begins immediately following the 9th TWP month and lasts for 36consecutive months (3 years) whether or not the individual is working during that time. • During the EPE, benefit payments can start and stop repeatedly based on changes in earnings above and below SGA.

  19. EPE Exercise • In January 2020, Katie increases her hours at work and is now earning $1300 per month. • In May she cuts her hours and is back to earning $1000 per month through December 2020. • Use a SSDI Tracking Form to illustrate the following: • When Katie’s EPE started and stopped; • When Katie’s 3 Grace Period months were used; • Indicate what months she should receive her benefit check.

  20. Phase III – Post Extended Period of Eligibility Once the EPE ends… • An individual will continue to receive benefit payments in full for each month earnings are below the SGA limit. • Benefits are ‘terminated’the first month earnings exceed the SGA limit. • If benefits are terminated because of earnings above SGA, and the individual later stops working or reduces earnings below the SGA limit, they must either… • Make a special request that benefits be reinstated through a work incentive known as Expedited Reinstatement or EXR (if eligible), or • Complete a new application for benefits.

  21. Phase III – Post Extended Period of Eligibility • A request for Expedited Reinstatement of benefits can only be made if the following criteria are met… • The individual stopped receiving benefits because of SGA level earnings from work, • The individual is now unable to work or perform substantial gainful activity, • This individual is disabled because of an impairment(s) that is the same as or related to the impairment(s) that allowed benefits earlier, and • They make the request within 5 years from the month benefits were terminated. • Individual can receive up to 6 months of provision benefit payments while an EXR decision is being made. • If the above EXR criteria are not met, individuals may receive benefits again but must complete a new application.

  22. Review – Title II Work Incentives Phases • Phase II • Extended Period of Eligibility • 36 consecutive months starting immediately after TWP ends • Cash payments made for months of earnings below SGA • Cash payments suspended for months of earnings above SGA • Phase III • Post EPE-EXR • Benefit continues for months of earnings below SGA. • Benefit will be terminated if earnings are above SGA • Individual can apply for reinstatement of benefits through EXR or can re-apply. • Phase I • Trial Work Period • 9 months of earnings over TWP threshold (not necessarily consecutive) • Individual can earn any amount from work and will receive cash benefit payments during this time • Earnings still need to be reported to SSA

  23. Possible Work Incentive Deductions • Some individuals may be eligible for other work incentives. • Subsidies & Special Conditions • Impairment Related Work Expenses (IRWEs) • If either or both of these work incentives apply, Social Security will only count a portion of the individuals earnings when deciding if earnings are above or below the SGA limit. • The amount of earnings that are counted are known as ‘countable earnings’. • This means some individuals could have gross earnings above SGA and still qualify to receive benefit payments!

  24. Subsidies/Special Conditions • Special circumstances that indicate a worker is not actually earning the full wages he or she is being paid. A dollar value for this circumstance is determined and then subtracted from the individual’s monthly gross wages to calculate Countable Earnings. • Examples of Subsidies are: • Reduced productivity. • Performing fewer work duties than co-workers. • Receiving extra supervision from employer or a job coach. • May use form SSA-3033 to document this work incentive.

  25. Subsidy Exercise • Jane is starting a new job in an insurance office and will be earning $1300 per month. As an accommodation to her impairments, Jane’s employer has made some exceptions to her job description. Jane will only be required to complete 70% of the standard job description for her position. • Jane completed her TWP already. • Calculate Jane’s countable earnings. • Will she continue to receive her benefit?

  26. Subsidy Exercise • Jane is earning $1300 per month but is only required to complete 70% of her job duties. What is the amount of her subsidy? • Jane has a 30% subsidy. • What isthe amount of Jane’s countable earnings? • $910 (or 70% of $1300). • Will Jane continue to receive her SSDI benefit? • Yes!

  27. Impairment Related Work Expense (IRWE) • IRWE’s must be work related, necessitated by the worker’s disability, and paid for by the worker. • Examples of IRWE’s are: • Vehicle modification. • Assistive devices (including repair, maintenance, and training to use them). • Job coaching. • Attendant services. • Therapies. • Transportation necessitated by disability (e.g. wheelchair van service). • Medications, medical services and supplies. • Must provide SSA with copies of receipts for IRWEs.

  28. IRWE Exercise • Brian will soon begin working full-time earning $1250 per month. He is unable to take public transportation because of his disability, therefore, Brian pays his neighbor $150 per month to drive him to and from work. He also pays $20 per month in medication co-payments. • Brian has completed his TWP and is in his EPE. • Calculate Brian’s countable earnings. • Will Brian continue to receive his benefit?

  29. IRWE Exercise • What is Brian’s total IRWE amount? • $170 per month ($150 transportation + $20 medication copays) • What is the amount of Brian’s countable earnings? • $1,080 ($1250 earnings - $170 IRWEs) • Will Brian continue to receive his SSDI check? • Yes!

  30. Work Incentive Reminders Remember… • Subsidies and Special Conditions can only apply if reported to Social Security! If not reported, they don’t exist. • Subsidies and IRWEs only apply after the TWP has ended.

  31. A Few Things To Note • Social Security always considers GROSS (pre-tax) earnings. • Remember, some individuals may have already worked through some or all of these Phases from past work!!! • It’s important to ask about previous work. DON’T assume everyone is starting from the beginning. • Advocating for Benefits Counseling is important! • Every Title II beneficiary is entitled to these work incentive Phases to protect benefits, however, if Social Security determines an individual has “medically improved” as the result of a medical review, he/she may lose benefits. • Medical reviews happen routinely for everyone, regardless of work.

  32. MD-BCN Online Tools • Social Security Disability and Work Calculator - • Blank TWP-EPE Chart - https://www.mdbenefitscounseling.org/making-employment-work

  33. So if my cash benefit payments stop, what about Medicare?

  34. Extended Period of Medicare Coverage (EPMC) • If an individual loses Title II due to earnings above SGA, he/she can retain Medicare coverage for at least 93 months (7 years and 9 months) after the end of the Trial Work Period. • *Important to Note: Medicare premiums are typically deducted from an individual’s monthly benefit. It is important that individuals know they will be billed directly for their Medicare premiums (usually quarterly) once they are no longer receiving a benefit. • But if they qualify for Medicaid through EID, their Medicare premiums will be covered!

  35. Supplemental Security Income (SSI) • SSI falls under the Title XVI benefit program. • Provides supplemental income to adults with low income who are age 65 or older or are blind or have a disability. • Needs based program for which the individual must have limited resources and income to qualify. • Eligible individuals also receive Medicaid

  36. SSI Eligibility Criteria Resource Limits • Individual resource limit: no more than $2000 • Married couple (two SSI–eligible persons residing together) resource limit: no more than $3000 • SSA does not count the following resources: • An individual’s home he/she lives in and the land it is on; • Life insurance policies with a face value of $1,500 or less; • One car (usually); • Burial plots for the individual and members of his/her immediate family; and • Up to $1,500 in burial funds for the individual and his/her spouse. • Special Needs Trust Fund • ABLE Accounts General Criteria • Individuals who meet SSA's disability criteria, or blind criteria or are over 65 and meet income and resource limit guidelines • Be a US citizen or qualified alien Income Limits • To initially qualify, an individual cannot perform “Substantial Gainful Activity” (SGA). An individual may be performing SGA if she/he earns more than $1220/month gross wages (or $2040/month gross wages if the individual is blind). The SGA limit does not apply once approved for SSI. • An individual's “countable income” cannot be greater than $771/month (for 2019)

  37. SSI Eligibility - Financial Requirements • Themaximum amount of SSI any one person can be eligible for is known as the Federal Benefit Rate (FBR). • In 2019 the Federal Benefit Rate for an individual is $771 per month. • The amount of SSI an individual qualifies for depends on the amount of other income he or she receives. SSA looks at 2 different categories of income when calculating SSI payment amounts: • Countable Unearned Income • Countable Earned Income

  38. SSI Eligibility – A Few Exceptions • It is important to note that some individuals may not be eligible for the maximum SSI payment amount even if they themselves have no other income. • An individual’s maximum benefit rate could be reduced if he or she is • married to a spouse who has income, OR • (‘deeming’ applies) • under age 18, living with his/her parents, and the parent(s) has income, OR • (‘deeming’ applies) • not paying the full cost of his/her food and shelter costs (i.e. not charged rent or receives help with his/her living expenses • (an ‘In Kind Support and Maintenance (ISM) reduction applies).

  39. Countable Unearned Income • Unearned income is most income except that from wages, salary, or self-employment. For example: Veterans Benefits, Unemployment, Worker’s Compensation benefits, other Social Security benefits (Title II), etc. • To calculate countable unearned income: Subtract a General Income Exclusion (GIE) of $20 from the amount of unearned income.

  40. Unearned Income - Exercise • Shelby is currently receiving the maximum SSI benefit of $771 each month. Next month she will start receiving an SSDI benefit of $450. • Help Shelby by advising her of the effect her SSDI income will have on her SSI benefit amount and calculate her new SSI monthly payment. • Use a SSI Calculation Sheet to calculate Shelby’s new SSI Payment

  41. Unearned Income – Exercise Review • Shelby’s new SSI payment would be $341 per month. • Her SSI has been reduced. Is her total monthly income now less? • No, her total monthly income is more! • With $450 SSDI and $341 SSI, Shelby’s total monthly income is $791 per month.

  42. Countable Earned Income • Like unearned income, earned income from work will reduce the amount of SSI an individual is eligible for but not dollar for dollar! • SSI is only reduced by the amount of countable earned income. • How is CountableEarnedIncome is calculated? • Subtracting from gross earnings the General Income Exclusion (GIE) of $20 (as long as it was not already subtracted from unearned income); then • Subtracting an Earned Income Exclusion (EIE) of $65; then • Dividing the remaining amount in half. • In addition to the GEI and EIE, other special work incentive exclusions may apply (we will discuss these more later on). • SSI recipients are ALWAYS better off financially by working!!

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