EMPLOYMENT: The Great Frontier

How Work Impacts SSA Disability

Two Disability Programs

Social Security Disability Insurance (SSDI)

Supplemental Security Income (SSI)

SSDI Authorized under Title II of the Social

Security Act Pays workers under full retirement age,

who are disabled or blind and their dependents

Worker must be insured Benefit amount based on lifetime average

earnings covered by Social Security (FICA) All benefits paid from the Social Security

Trust Fund Eligible for Medicare after 24 months

SSI Authorized under Title XVI of the Social

Security Act Pays people who are aged, blind or

disabled – including minor children with disabilities

Income and resource limits No benefits paid to dependents Benefits paid from general tax fund, not

the Social Security Trust Fund Eligible for Medicaid

Keep in Mind….. It is possible to receive benefits under both

programs (concurrent claim)

An SSI recipient who works, may one day be insured for SSDI

An individual found disabled prior to age 22 could be eligible for a Childhood Disability Benefit (CDB) on a parent’s record (retired, disabled or deceased)

Caution…. Dependent child benefits end at age 18

(unless still in high school)

If child is receiving on parent’s record and has a disability, he/she should apply for CDB – five months prior to turning 18

CDB application will keep record from terminating (benefits may be still be suspended at age 18, but not terminated)

SSA Definition of Disability The inability to engage in any

substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

What is SGA?(Substantial Gainful

Activity)

Important part of the eligibility process Earnings guidelines used to evaluate work

activity in determining disability 2006 level is $860/mo for disabilities

other than blindness; $1,450/mo for blindness

Work incentives are used to lower earnings below SGA

Work Incentives

Special rules for employment support that help preserve benefit eligibility, including health insurance

Serve as a safety net to make the transition from benefits to work

Are available under SSDI and SSI – but are applied differently

How Work Affects SSDI

SGA as a Factor for SSDI

Used in determining initial disability Claim is denied at initial application if

current SGA is established Used in determining the date of onset

of the disability

A factor in evaluating continuing disability

Trial Work Period (TWP) Test ability to work for nine months (not

necessarily consecutive) Complete within a rolling 60-month period Full benefits paid each month Earnings over $620 gross/mo constitutes

a trial work month ($620 net or 80 hrs/mo self-employment) for 2006

No incentives considered – only earnings Only one TWP

Extended Period of Eligibility

(EPE) Starts month after the TWP ends (whether

individual is still working or not) Continues for 36 consecutive months Full benefits paid for months earnings are

below SGA No benefits paid for months over SGA Medicare (if active) continues all months First month of SGA after the EPE results in

termination of cash benefits

Work Incentives - SSDI Unsuccessful Work Attempt (UWA) Impairment-Related Work Expenses (IRWE) Subsidy and Special Conditions Unincurred Business Expenses (Self-

Employed) Continuation of Medicare Recovery during vocational rehabilitation

(Section 301) Expedited Reinstatement (EXR)

Unsuccessful Work Attempt(UWA)

Generally any work lasting less than three months and ends (or drops below SGA level) due to a disability

Significant break of 30 days between work attempts

Under special situations work up to six months can be unsuccessful

Work over six months is never considered unsuccessful

Impairment-Related Work Expenses (IRWE)

Items or services, related to the disability, that are necessary for individual to work

Must be paid for by the individual with no reimbursement expected

Be of reasonable cost Excluded from earnings when making

an SGA determination

Examples of IRWE

Medications prescribed to treat the impairment

Attendant care services Work-related assistance devices Modifications to vehicle Service animals Some transportation costs

IRWE and SGA Donna works and earns $900 per month.

She also has several medications prescribed for her impairment. Donna does not have insurance that pays for these medications. She pays $105/mo for her prescriptions.

Donna’s wages are over SGA ($860). However, SSA can exclude the cost of her prescriptions when determining SGA. $900 - $105 = $795 which is below SGA. Donna’s benefits continue.

Unincurred Business Expenses

For self-employed only Contributions made by others to the business

Item or services that IRS would normally allow as a business expense: Computer Office space Paid help

Paid for by someone other than individual receiving benefits

Subsidy/Special Considerations

Forms of support received on the job Job coach Extra assistance from co-workers Extended or more frequent breaks

Support results in individual receiving more pay than the actual value of his/her work

Only the actual value of the work is counted when determining SGA

Subsidy and SGA Bob works 30 hrs a week at $7.50/hr. He is

doing well with work, but still needs extra help. He has a job coach five hours a week.

30 hrs/wk at $7.50/hr Bob earns $900/mo (over SGA.) However, he has a job coach 5 hrs/wk. SSA will disregard the time Bob is working with his job coach. 5 hrs at $7.50 =$37.50 x 4 wks = $150/mo.

$900 - $150 = $750 which is under SGA.

Continuation of Medicare Two parts to Medicare *:

Part A hospitalization – free Part B supplemental – premium

In general, coverage will continue at least 93 months following the TWP

After extension expires, both Part A and Part B may be purchased

Individual must remain disabled by SSA rules

Recovery During Vocational Rehabilitation (301 cases)

Individual is having a medical review (CDR) and

Is active in an approved vocational rehabilitation program - indicates possible 301 case

If found no longer disabled by SSA rules, benefits can continue until program is completed – if it is reasonable to expect individual will be self-sufficient at the end of the program

Expedited Reinstatement(EXR)

If benefits terminate due to work, not medical recovery and

Work ends due to the disability (or drops below SGA) and

Disability is the same as or related to the original impairment allowing benefits

Provisional payments and Medicare reinstated for up to six months while SSA reviews the disability

Request within 60 months of termination

How Work Affects SSI

SGA as a Factor for SSI

Used in determining initial disability Same level as SSDI Claim is denied at initial application if

current SGA is established Exception: SGA is never a factor for

those who are blind After SSI benefits are started, SGA is

not a consideration

Federal Benefit Rate(FBR)

Maximum monthly SSI cash benefit payable For 2006

Individual - $603 Couple - $904

FBR is national amount – same in all states States have option to supplement the

federal amount Income can lower the amount payable

Countable Income Amount used to determine SSI

benefit check amount Earned income (wages, self-

employment) counts $1 for every $2 earned (one-half)

Unearned income (e.g. SSDI, alimony) counts dollar for dollar

Work incentives are used to lower countable income

Work IncentivesSSI

Earned Income Exclusion/General Exclusion Impairment-Related Work Expenses (IRWE) Continuation of Medicaid (1619b) Plan for Achieving Self-Support (PASS) Student Earned Income Exclusion (SEIE) Property Essential to Self-Support (PESS) Blind Work Expenses (BWE) Recovery during vocational rehabilitation (301

cases) Expedited Reinstatement (EXR)

Earned Income Exclusion/

General Exclusion $65 of gross earnings automatically

excluded – count one-half of remainder

If there is unearned income, SSA will exclude $20 – count all remainder

If no unearned income, the $20 is excluded from the earnings for a total of $85

Example I– Countable Income

John receives $603 (full FBR for 2006) in SSI benefits. He started a job earning $400/mo. From his $400 SSA excludes $65 and then because he has no unearned income, $20 (general exclusion) = $315. Divide $315 by 2 = $157.50 ($1 for $2). This is John’s countable income.

$603 - $157.50 = $445.50. John’s SSI check will be reduced to $445.50

Example II - Countable Income

Joyce receives SSI plus a small pension of $100/mo. She also works earning $300/mo. SSA will exclude $20 from her pension. Her countable unearned income = $80.

From earnings she has the $65 exclusion = $235. Divided by 2 = $117.50. Total countable income: $117.50 + $80 = $197.50.

$603 - $197.50 = $405.50. This is Joyce’s SSI check amount.

Impairment-Related Work Expenses (IRWE)

Under SSI, SGA is not an issue after initial eligibility is established

IRWE are used to reduce the countable income

IRWE criteria is the same as for SSDI: Be related to the disability Necessary to work Paid by individual with no reimbursement

expected Be of reasonable cost

Example – Countable Income with IRWE

Jill receives $603 in SSI benefits. She started a job earning $400/mo. She has IRWE of $200/mo. From her $400 SSA excludes $65 and then $20 = $315. SSA then excludes $200 in IRWE = $115. Divided by 2 = $57.50. This is Jill’s countable income.

$603 - $57.50 = $545.50. Jill’s SSI check will be reduced to $545.50. ($100 more than John’s.)

Continuation of Medicaid1619b

Earnings too high for monthly benefit check (break-even point)

To qualify: Eligible for benefit check for at least one month Remain disabled Meet all non-medical eligibility rules Need Medicaid in order to work Earn under the Medicaid threshold amount

($29,207 for SD in 2006) Medicaid eligibility continues

Plan for Achieving Self-Support (PASS)

Set aside income (other than SSI) and/or resources, for use in reaching a specific work goal

Plan must be in writing, listing each step to reach goal and required expenses

Must be approved by SSA (including any changes to original plan)

Monitored for progress Denver PASS cadre handles all plans for SD

Who Can Apply for a PASS? A person who:

Receives SSI or could be eligible for SSI if PASS approved and

Has a disability by SSA rules Has income other than SSI Agrees to perform the employment

goal Uses excluded income/resources only

for approved plan expenses

Student Earned Income Exclusion

Definition of student: Under age 22 Attending school regularly

SSA will exclude up to $1,460/mo (for 2006) in student’s earnings when figuring countable income

Yearly maximum of $5,810 (for 2006) Exclusion taken before earned and

general exclusions*Prior to April 2005 could not be married or head of household

Property Essential to Self-Support

Excluded from countable resources: Items used in a trade or business

Inventory Equipment

Items owned and used as an employee Tools

In special cases some equity in non-business property or rental property

Blind Work Expenses (BWE) Extensive Need not be related to blindness:

Professional dues, union dues State, federal and local taxes Social Security taxes Meals at work Transportation

Excluded after one-half reduction of earnings

Recovery During Vocational Rehabilitation (301 Cases)

Same criteria as SSDI: Medical review (CDR) Found to no longer be disabled, but; Active in approved vocational

rehabilitation program Benefits can continue until program is

completed – if it is reasonable to expect individual will be self-sufficient at end of program

Expedited Reinstatement (EXR)

Benefits terminated because of earnings, not medical recovery

Stopped work (or reduced to below SGA) due to disability which is the same or related to original impairment

Requested within 60 months of termination Provisional payments/Medicaid up to six

months while disability is reviewed Meet all other eligibility requirements

Just a note…… Unincurred business expenses

Used ONLY at initial claim to determine SGA

NOT used to reduce countable income

Subsidy/Special consideration Used ONLY at initial claim to determine

SGA NOT used to reduce countable income

More Information SSA pamphlets:

What You Need To Know When You Get Social Security Disability Benefits

What You Need to Know When You Get Supplemental Security Income

How You Earn Credits Working While Disabled-How We Can Help Working While Disabled-A Guide To Plans For

Achieving Self-Support SSA publication:

Red Book on Employment Support

Resources SSA toll-free: 1-800-772-1213 www.socialsecurity.gov SSA, PASS Cadre

Denver Federal CenterP.O. Box 25447Denver, CO 80225-04471-800-551-1034 Toll-free: 1-800-772-1213

Mickie Douglas, Public Affairs SpecialistSSA, Rapid City605-342-0242 ex. 219mickie.douglas@ssa.gov

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