SSA Work Incentives At A Glance

1. Disability Program Navigator TrainingA Joint Initiative of theU.S. Department of Laborand theSocial Security Administration SSA Work IncentivesAt A Glance Sharon Brent, Program Associate, Law Health Policy & Disability Center

2. Learning Objectives • To understand the value of the Work Incentives to the beneficiary earning income • To understand which Work Incentives belong to both SSI and SSDI • To understand how each Work Incentive can be applied to benefit the individual

3. What Are Work Incentives? Work Incentives make it possible for people with disabilities receiving SSI and/or SSDI to work and still receive monthly payments and Medicare and/or Medicaid while they test their ability to work. The Goals of the Work Incentive Programs are to assist individuals to achieve gainful employment, increase independence, facilitate empowerment, and acquire self-support.

4. Work Incentives Attached to SSI and SSDI • Impairment Related Work Expenses The out of pocket cost of certain items and services required by individuals in order to: • Enable a person to work; • A person needs the item or service because of a disabling condition; • A person paid the cost and are not reimbursed by another source, such as Medicaid, Medicare, service agency; • The cost is “reasonable” (it represents the standard charge for the item or service in a persons community); and • A person paid the expense in a month that there was employment. • (Sometimes work expenses may be used before the first or after the last month of work activity.)

5. Impairment Related Work Expense(IRWE)Example Kathy is medically defined by SSA as having an intellectual disability. She is receiving $220.00 per month from SSDI as a SSCDB beneficiary and $352 SSI. She is earning $865.00 gross wages each month. She is paying out of her own pocket $100.00 a month (IRWE) for transportation costs because due to her disability she is unable to navigate public transportation and is required to use door-to-door-transit services.

6. Value to SSDI and SSI usingImpairment Related Work Expense • The value of the $100 (IRWE) to SSDI is reducing the $865 which is considered SGA ($810/2004) to $765 countable gross income. • The value of the $100 (IRWE) to SSI is when calculating the SSI monthly payment and getting credit for the out-of-pocket expense. $220.00 SSDAC - 20.00 General Exclusion = $200.00 Unearned Income + $865.00 Gross Wage - 65.00 Earned Income Exclusion - 100.00 IRWE ÷ by 2 =$350.00 Earned Income ________________________ = $550.00 Total Countable Income (TCI) New SSI benefit payment = Current Federal Benefit Rate – TCI = $2.00 SSI payment

7. SSDI Work Incentives • Subsidies and Special Conditions “Subsidy” and “Special Conditions” are SSA’s names for support a persons receives on the job that may result in a person receiving more earnings than the actual value of the services performed on the job. • “Subsidy” is the support provided by an employer; • “Special Conditions” are generally provided by someone other than an employer, like Vocational Rehabilitation, One-Stop, or Service Provider. • SSA considers the existence of subsidy and special conditions when making an SGA decision. Only the earnings that represent the actual value of services performed is considered when making an SGA determination.

8. Subsidy Example • A beneficiary receives more supervision than other workers doing the same or a similar job for the same rate of pay; • A beneficiary has fewer or simpler tasks to complete than other workers doing the same job for the same rate of pay; • A beneficiary has a job coach who helps the person perform the tasks of the job.

9. SSDI Work Incentives • Unincurred Business Expense APPLIES TO SELF-EMPLOYMENT ONLY These are contributions made by others to support the self-employment effort. • It must be an item or service that IRS would allow as a legitimate business expense if the beneficiary has paid for it; and • Someone other than the beneficiary paid for it.

10. SSDI Work Incentives Unincurred Business Expenses Example • The State Vocational Rehabilitation agency gives a person a computer for the business; and/or • A friend works for the business as unpaid help. SSDI - An SGA decision is made after SSA deducts unincurred business expenses from the net earnings to determine an accurate measure to the value of work. SSI - SSA does not deduct unincurred business expenses from earnings when they figure the SSI payment amount.

11. SSDI Work Incentives • Unsuccessful Work Attempt This is a work attempt to work at substantial gainful work that a person stops or reduces below the SGA level after a short time (6 months or less).

12. Unsuccessful Work AttemptExample • A persons disability prevents the continuation of the employment by: • Leaving the job; • Reducing the amount of hours; • Eliminating some of the job tasks; and • Removing the special conditions related to the impairment upon which further work performance is required. SSDI-Does not count earnings in months that are identified and “unsuccessful” SSI-Does not consider unsuccessful work attempts when figuring the SSI payment.

13. SSDI Work Incentives • Section 301Continuation of benefits Under a Vocational Rehabilitation Program When SSA finds a person’s disability no longer impairing the ability to earn SGA due to medical improvement the monthly payment usually stops However If a person is participating in a vocational rehabilitation program benefits may continue until the program ends, participation stops, or SSA determines continued participation will not increase the likelihood of permanent removal from benefits.

14. Section 301Example • A person must be participating in an approved vocational rehabilitation program before disability was determined improved: • State Vocational Rehabilitation or approved non-state VR program • Contracted an Employment Network for services; • SSA must review the participation and determine the likelihood of permanent removal from the disability benefit rolls.

15. Work Incentives Attached to SSDI ONLY • Trial Work Period (TWP) allows a person to test their ability to work for at least 9 months. During the TWP a person will receive their full amount of benefit payment regardless of how much earned income a person might earn as long as the person is still determined disabled. • The TWP months do not need to be consecutive months but earned in a rolling 60 month period; • We currently consider a beneficiary’s work to be “services” if they earn more than $580/month (in 2004) or work more than 80 self-employment hours in a month. (The dollar amount is adjusted each year based on the national average wage).

16. Trial Work Period (TWP)Example • A person starts with the first month of eligibility under SSDI and earns $700. The first TWP has been earned. If income continues each month at that level or higher he continues to earn a TWP each month. • If a person goes below the annually TWP amount ($580/2004) it will not be counted as a TWP month. • Once 9 TWP months are earned within a rolling 60-month period, the beneficiary has completed the trial work period and starts the extended period of eligibility.

17. SSDI Work Incentives • Extended Period of Eligibility (EPE) At the conclusion of the TWP, as long as the individual continues to be disabled, the EPE will begin in the following month. The EPE can continue indefinitely depending on the individual’s work. The first 36 months are called the re-entitlement period. During this time, benefits are paid without a new application for months work below the SGA level. Benefits are suspended for months where earnings are above the SGA level. After the end of the re-entitlement period, benefits will terminate the first month that the beneficiary earns above SGA.

18. Extended Period of EligibilityExample Kathy has completed her TWP and is now starting her EPE earning $750 per month. She is still receiving her full benefit check because she has been determined NOT to be earning SGA. The next 6 months she earns the $750. In the 7th month of her EPE she now is earning $875 per month her first month at SGA (2004/$810). Her first month at SGA level earnings is her “cessation” month and she still is receiving her full benefit check for month #7, 8, and 9 of her EPE (the “grace months”). She continues earning the $875 per month and now is no longer eligible for her SSDI benefit check due to earnings of SGA. She continues to earn SGA. At the 20th month of her EPE she is no longer able to work. Since she is still in the re-entitlement period, she is eligible again for her full SSDI benefit check without reapplying. Her benefits stop in the first SGA month after the end of the re-entitlement period.

19. SSDI Work Incentives • Continuation of Medicare • Most people who work will continue to receive at least 93 consecutive months of Medicare coverage both Part A and B (if they took the option). • The cash benefit may have stopped due to earnings of SGA the Medicare coverage continues. • The 93 months starts after the month the last TWP is earned. • A person must continue to have a medical impairment that has not improved.

20. SSDI Work Incentives • Medicare for People with Disabilities who Work After premium free Medicare coverage ends (93 months of Continuation of Medicare) due to work, some people who have returned to work may buy continued Medicare coverage as long as they remain medically disabled.

21. Medicare for People with Disabilities who WorkExample • A person not yet age 65 • A person who continues to have a disabling impairment • A person’s Medicare stops due to earned income (working) • A person’s Medicare stops due to earned income (currently working) • A person can buy Premium Hospital Insurance (Part A) at the same monthly cost that uninsured eligible retired people pay ($316 for 2003) or at a 45% reduction if the beneficiary has 30 QCs ($174 for 2003); Most people will have 30 QCs if they continued working after their benefits stopped.

22. SSI ONLYWork Incentives • Earned Income Exclusion SSA will not count the first $65 of a persons earnings each month then only ½ of the remainder. If a person has no unearned income in a month (SSDI, VA, Workman Compensation, etc.) then the $20 General Exclusion will be added to the $65.00 to make the firs $85 of earnings not counted.

23. SSI Earned Income Exclusion Example Kathy is receiving $552 each month from an SSI payment. She is now earning $865 from her job. As she reports wages to the local field office each month SSI will calculate her earnings as follows: $865.00 Gross Monthly Earnings - 85.00 General and Earned Income Exclusion $780.00 ÷ by 2 = $390 This is what SSI counts of Kathy’s wages of $865.00 $552.00 Current SSI payment -390.00 Countable Earned Income $162.00 New SSI payment

24. SSI Work Incentives • Student Earned Income Exclusion (SEIE) If a person is 22 and under, not married nor head of household, and regularly attending school, when the “student” starts to earn income an amount of that earned income is excluded from the SSI calculation when figuring the SSI payment. There is a monthly maximum amount $1,370/2004, and an annual maximum amount $5,520/2004, determined annually based on the cost-of-living adjustment. *This exclusion is applied before the general or earned income exclusion.

25. Student Earned Income ExclusionExample • Regularly attending school means that a person is taking one or more courses of study and attend classes: • In a college or university for at least 8 hours a week; • In grades 7-12 for at least 12 hours a week; • In training course to prepare for employment for at least 12 hours a week • If less time than indicated it must be beyond the student’s control • If a person is home taught studying a course or courses given by a school (7-12), university, or government agency or have a home visitor or tutor who directs the study.

26. SSI Work Incentives • Blind Work Expense (BWE’s) SSI does not count any earned income that is used to meet expenses that are needed to earn that income when deciding a person’s SSI eligibility and payment amount. • A person must be under 65; • A person 65 or older and receiving SSI payments due to blindness; • The expense does not have to be related to the blindness; • Items identified are treated as BWE rather than IRWE’s (Impairment Related Work Expenses)

27. Blind Work ExpenseExample • Some examples of BWE expenses might be: • Guide Dog expenses • Transportation to and from work • Federal, State, and local income taxes • Social Security Taxes • Attendant Care Services • Visual and sensory aids • Translation of materials into Braille • Professional association fees • Union dues This is not an all inclusive list an individual may have other items that would qualified as a Blind Work Expense

28. SSI Work Incentives • Plan for Achieving Self-Support (PASS) The program allows a person to set aside income and/or resources for a specific time for support in reaching a SSA-approved work goal: • SSI will not count income, resources, or unearned income (SSDI) in determining the SSI payment when his money is set aside to reach the objective. • A PASS can help a person establish or maintain SSI eligibility and could increase the SSI payment currently received. • The SSI PASS Cadre must determine if the goal described on the PASS is a valid, attainable goal. SSA has a form SSA-545 that can be used to submit to the Cadre what is the goal, expenditures and time line to reach objective.

29. Plan for Achieving Self-SupportExample • Kathy has decided she wants to be an Administrative Assistant. In order for her to be able to apply for a job in this capacity she must have computer skills and understand multiple software programs to become qualified. • She is receiving $320 per month from her previous work history of SSDI and $252 per month of an SSI cash payment. • Kathy will need to go to a technical school to learn the computer, she may need to have a tutor, a computer to practice, transportation support, and books and supplies. • She wants to use her $320 per month of her SSDI to fund the PASS for 18 months to help with the above expenditures to help her reach her objective.

30. PASS Example – CONTINUED • She fills out the SSA 545 BBK form for PASS and submits it to the PASS Cadre in her Region. • The Cadre may accept it just the way it is or they may call Kathy and talk to her about some of the items. • The Cadre accepts the PASS as submitted. • Kathy will save in a separate bank account $300 each month of her $320 SSDI. Because SSI has approved her PASS they will now exclude $300 of her SSDI for 18 months when figuring her SSI payment and now send her $552 of SSI instead of $252 she was getting prior to submitting the PASS. • She will be required to have it reviewed periodically by SSI and show how she has utilized the money in the PASS showing receipts.

31. SSI Work Incentives Property Essential for Self-Support (PESS) Some resources that are essential to a persons means of self-support may be excluded when SSI determines initial and continuing eligibility to SSI.

32. PESSExample • SSI does not count property that is used in a trade or business (inventory) or use for work as an employee (tools, equipment, truck). How else these items are used does not matter. • SSI does not count up to $6,000 of equity value of non-business property that a person uses to produce goods or services essential to daily activities (produce, livestock for consumption only for personal household) • SSI does not count up to $6,000 of equity value of non-business income-producing property (rental). If the property yields an annual rate of return of at least 6%. • A note: SSI does not consider liquid resources (stocks, bonds, notes) as a PESS, unless a person uses them as part of a trade or business.

33. SSI Work Incentives • Special SSI payments for People Who Work-Section 1619 (a) A person can receive SSI cash payments even when earned income (always gross or net earnings from self-employment) is at SGA ($810/2004 level). This is instead of a trial work period or extended period of eligibility (which applies to SSDI). • Eligibility for 1619 (a) enables an individual who continues to be disabled to receive an SSI cash payment when earning SGA. • Individuals must continue to have the original disabling condition • Individuals must meet all other resource and income tests.

34. 1619 (a)Example Kathy is receiving an SSI cash payment of $552 each month. She starts earning income of $785/gross each month. She will continue to receive an adjusted SSI payment and stays in regular SSI payment status. Kathy then starts to increase earnings to $850/gross each month (SGA/2003). She is still eligible for an adjusted SSI payment and moves into 1619 (a) payment status. If Kathy goes below the current SGA level and continues to meet all other SSI eligibility requirements she moves back to regular SSI payment status with a continued adjusted SSI payment due to earned income.

35. SSI Work Incentives Continued Medicaid Eligibility-Section 1619 (b) • Provides for continued Medicaid eligibility for individuals whose income is too high to qualify for an SSI cash payment, but is not high enough to fund the loss of Medicaid or publicly funded attendant care. • Individuals will be eligible for 1619 (b) status if the only cause for the cessation of the SSI payment is due to earned income. If the loss of SSI is due to excess resources or other income 1619 (b) does not apply. • Individuals must have been eligible for an SSI cash payment for at least 1 month; and • Individual is still disabled and needs Medicaid to work.

36. 1619 (b)Example Kathy receives $564 SSI cash payment and has Medicaid. She starts earning income of $750 each month. Her SSI is adjusted due to earned income and she continues to be eligible for Medicaid. Kathy gets a raise and increases her hours and now earns $1300/gross each month. When SSI adjusts her SSI payment she no longer is eligible for a cash payment but remains in SSI eligible status and qualifies for 1619 (b) status. 1619 eligibility is conveyed via the State Data exchange and the State Medicaid office determines Kathy is eligible for continued Medicaid coverage with no “spend down” or “share of cost” for her Medicaid eligibility to continue through 1619 (b). (If necessary, the beneficiary could bring a Benefits Query statement from SSA showing NO1 to the State Medicaid office.)

37. SSI Work Incentives • Special Benefits for People Eligible Under Section 1619 (a) or (b) who enter a Medicaid Treatment Facility If a person is eligible under Section 1619 and goes into a public medical or psychiatric facility or Medicaid facility the person can receive an SSI cash benefit for up to 2 months.

38. SSI Work Incentives Reinstating Eligibility Without a New Application If a person has been ineligible for an SSI benefit for 12 months or less for any reason other than medical recovery, they may be able to restart an SSI cash payment and/or continued Medicaid coverage without a new application. It is important to always contact SSA about changes to a situation.

39. Work Incentive Tips to Remember • More than one Work Incentive may be used at the same time; • Individual application of supports will vary from person to person and job to job; • Resources in the community are available to help beneficiaries understand and access Work Incentives: • SSA 1-800-772-1213 • Local SSA Field Offices • BPAO System (Benefits Planning, Assistance and Outreach Program) • The SSA Work Incentive Liaisons, Work Incentive Specialists, and the Area Work Incentive Coordinators • Protection and Advocacy Program

40. This training has been designed and developed by theLaw, Health Policy & Disability Center (LHPDC)of theUniversity of Iowa College of Lawdisability.law.uiowa.edu