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How Work Affects SSI and SSDI Linda Landry Disability Law

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Title: How Work Affects SSI and SSDI Linda Landry Disability Law


1
How Work Affects SSI and SSDI
Linda Landry Disability Law Center Deborah
Cortright Social Security Administration SSA
Partners Summit March 2008
2
3 Questions For Today
  • How does work affect SSI or SSDI I am receiving?
  • If I lose my SSI or SSDI, will I lose my Medicaid
    or Medicare?
  • What can I do to avoid problems with Social
    Security when I work?

3
How Benefits Help The Transition to Work
  • Income from benefits safety net
  • While recovering or gaining skills needed for
    work
  • While trying out work
  • Benefits come with health care
  • Medicaid
  • Medicare

4
What is SSI?
  • SSI is a needs based benefit program.
  • SSI has strict income and asset limits.
  • SSI has strict immigration status rules.
  • No work history needed for SSI.
  • Most states provide Medicaid w/SSI.

5
SSI and Work Effect of Wages ?
  • Once SSI eligibility has been determined, the
    effect of wages is as countable income that
    reduces the SSI benefit, and not as Substantial
    Gainful Activity (SGA) that terminates
    eligibility.

6
SSI Basics - Income
  • Income anything you receive in cash or in kind
    that you can use to meet your needs for food and
    shelter.
  • Types of income
  • Earned compensation for work.
  • Unearned (e.g., SSDI, unemployment, alimony,
    gifts).
  • In-kind (e.g., free shelter or food).
  • Deemed from a spouse, parent, or sponsor.
  • Income generally counted in month of receipt.

7
Counting Income for SSI
  • Income counts when paid/received. 20 CFR
    416.1111(a).
  • There is a 20 general income disregard. Use
    on unearned income first. 20 CFR 416.1112(c)(4).

8
SSI Earned Income Exclusion
  • 65 earned income exclusion, and
  • 20 general income exclusion, if unused, and
  • ½ of the remainder of monthly earned income
    (gross wages or net self-employment income)
  • Are excluded to provide a work incentive for
    SSI recipients.

9
Example of Earned Income Exclusion
  • SSI recipient earns 385 per month
  • 385-20 (general income exclusion) 365
  • 365-65 (earned income exclusion) 300
  • 300-150 (1/2 remainder) 150 countable earned
    income
  • 637 (SSI living alone rate) - 150 487 SSI
    p/mo.
  • Total income 872 (385 earned 487 SSI)

10
SSI and Work Effect of Wages Example 1
  • Carmen receives 637 in SSI disability benefits
    in 2008.
  • She takes a job paying 885 in gross wages per
    month.
  • What is the effect on her SSI?

11
SSI and Work Effect of Wages Example 1
  • 400 of Carmens gross monthly wages is countable
    885 85 (20 65) divided by 2 400.
  • Carmens SSI benefit will be 237.00 (637 - 400
    237).
  • Her total monthly income will be 1122.

12
SSI and Work Effect of Wages Example 2
  • Joe receives 520 in SSDI and 137 in SSI
    disability benefits per month in 2008.
  • He also takes a job paying 885 per month in
    gross wages.
  • These wages make him SSI ineligible.

13
SSI and Work Effect of Wages Example 2
  • 520 SSDI - 20 500 countable SSDI
  • 885 gross wages - 65 820.
  • 820 divided by 2 410 countable wages.
  • 500 410 910, more than the SSI amount
    (137) for which Joe is eligible.
  • Joes totally monthly income is 1405.
  • Will Joe remain eligible for Medicaid? (more on
    this later)

14
SSI Benefits and WorkIRWE Deductions
  • Impairment Related Work Expenses (IRWEs) may be
    deducted to determine countable gross monthly
    wages and countable net self-employment income.
  • 20 CFR 416.1112
  • IRWE deductions are in addition other permitted
    earned income deductions

15
SSI Benefits and WorkIRWE Deductions
  • IRWEs are
  • impairment related items and services
  • needed in order to work
  • out of pocket, i.e., paid by the individual and
    not reimbursed by any source.
  • paid in a month when individual worked.
  • 20 CFR 416.976

16
IRWE Examples Attendant Care Services
  • provided at work
  • provided on the trip to and from work
  • provided at home on work days to prepare for
    work, including cooking and bathing after work.

17
IRWE Examples Transportation Costs
  • Expense must be required by the individuals
    disability. E.g., individual cannot drive to work
    and cannot take available public transportation
    due to disability.
  • Vehicle modification costs.
  • SSA approved mileage allowances

18
IRWE Examples Equipment
  • Wheelchair or other mobility device
  • Protheses not primarily cosmetic
  • Adaptive equipment and software for work and use
    training
  • Communication equipment
  • Environmental equipment

19
IRWE Examples Residential Modifications
  • Residential modifications , if employed outside
    the home, to exterior of the home to permit
    access
  • If self-employed, modifications to create an
    accessible workspace

20
IRWE ExamplesMedical Expenses
  • Medications and other treatment to control or
    improve a condition to permit work.
  • Doctor visits for conditions related to
    disability.
  • Diagnostic procedures related to control,
    evaluation or treatment.

21
Other IRWE Examples
  • Medical supplies
  • Service animal expenses
  • Support animal expenses
  • Job coach expenses

22
Rex Could be an IRWE
23
SSI Example Effect of IRWES on Countable Wages
  • Carmen receives 637 in SSI disability in 2008.
  • She takes a job paying 885 in gross wages per
    month.
  • She pays 60 per month for chiropractic
    treatments and co-pays for medications she needs
    in order to function at work.

24
SSI Example Effect of IRWES on Countable Wages
  • 380 of Carmens wages are countable
  • 885 85 (65 20) 800
  • 800 - 60 (IRWEs) 740
  • 740 divided by 2 370 in countable earnings .
  • Her SSI benefit will be 267 (637 - 370
    267).

25
Blind Work Expenses
  • A blind SSI recipient who is working may deduct
    ordinary and necessary work-related expenses from
    countable earned income. Examples include guide
    expenses, taxes, lunch, transportation.
  • These deductions are in addition to other
    permitted earned income deductions
  • 20 CFR 416.1112(c)(8), POMS SI 00820.555

26
Work SSI and SSI BenefitsStudent Earned Income
Deduction
  • The student earned income deduction is for SSI
    recipients who
  • are under age 22, and
  • are regularly attending school.
  • 20 CFR 416.1112(c)(3).

27
Work SSI and SSI BenefitsStudent Earned Income
Deduction
  • Regularly attending school means
  • For grades 7-12, attending at least 12 hrs per
    week
  • For college or vocational program, attending at
    least 8 hrs per week.
  • 20 CFR 416.1861.

28
SSI Benefits and Work Student Earned Income
Deduction
  • In 2008, the student earned income deduction is
    1550 per month, up to a maximum of 6240 per
    year.
  • This amount is indexed to the yearly cost of
    living increase.
  • This deduction is in addition other permitted
    earned income deductions.

29
Federal Educational Assistance
  • All student financial assistance received under
    Title IV of the Higher Education Act of 1965, or
    under BIA Student Assistance Programs, is
    excluded from income and resources, regardless of
    use. Title IV programs include Pell Grants
    federal work study programs Upward Bound, and
    others specified in POMS SI 00830.455.

30
Other Educational Assistance
  • any portion of a grant, scholarship, or
    fellowship used for paying tuition, fees, or
    other necessary education expenses is not
    countable income. 20 CFR 416.1124(c)(3).
  • any grant scholarship, fellowship, or gift for
    the cost of tuition or fees does not count as a
    resource for nine months. 20 CFR 416.1210(u),
    416.1250.

31
What is a PASS?
  • An SSI work incentive provision that allows
    the exclusion of income and/or resources of an
    individual who is blind or disabled and who wants
    to save money in order to become self-supporting.

32
Elements of a PASS
  • Be in writing (SSA 545)
  • State a job goal or VR evaluation
  • Contain a reasonable and measurable timeframe
  • List expenses necessary to achieve the work goal

33
Who Can Benefit From a PASS?
  • SSI recipients who want to be self-supporting
  • Voc rehab participants
  • Recipients in school or training program
  • SSDI recipients who could get SSI by having a
    PASS
  • Recipients with reduced SSI due to other income

34
Occupational Goals where a PASS begins!
  • A job that will produce sufficient earnings to
  • Reduce dependency on SSI
  • Eliminate dependency on SSDI
  • Is feasible, considering ones disability and
    strengths and abilities

35
Job Goal Supported Employment
  • Reduced dependency through
  • Earning more money by working more hours
  • Earning the same money but with lower
    out-of-pocket costs (e.g., fewer hours of job
    coaching needed)

36
Funding a PASSFunds used to reach occupational
goal will not be used to compute SSI checks
  • Can exclude income, for example...
  • Wages
  • Social Security benefits
  • Pensions
  • Income from spouse or parent
  • Can exclude resources, for example
  • Savings bonds
  • Bank accounts, certificates of deposit
  • Retroactive benefit payments, settlements

37
SSI and Medicaid
  • Medicaid is a needsbased health coverage
    program.
  • Most states provide Medicaid to SSI recipients.
  • Check your state for state specific Medicaid
    rules.

38
Keeping Medicaid While Working Loss of SSI
  • Will I lose Medicaid coverage if I make too much
    money to receive SSI benefits, even with all the
    deductions I can take?
  • Probably not you should be eligible for 1619b
    Medicaid and maybe for Medicaid Buy-in program.

39
Section 1619(a)
  • This provision allows disabled SSI recipients
    to work above the SGA level and continue to
    receive SSI.

40
1619b Medicaid
  • 1619b Medicaid provides continued Medicaid for
    SSI recipients with earnings too high to be
    eligible for an SSI cash payment.

41
Medicaid Threshold Rates for 2008
  • To qualify for 1619(b) a recipient must
  • Have been eligible for SSI for at least 1 prior
    month
  • Still be disabled
  • Still meet all other SSI eligibility rules,
    including the resource test
  • Need Medicaid in order to work and
  • Have gross earned income insufficient to replace
    SSI, Medicaid and any publically funded attendant
    care.

42
SSI Benefits and Work1619b Medicaid
  • Individuals can move seamlessly between SSI cash
    eligibility and 1619b Medicaid when the ability
    to work and wages fluctuate as long as they
    continue to meet the disability standard and
    remain assets eligible for SSI.

43
SSI Benefits and WorkMedicaid Buy-In
  • The Ticket to Work Act, P.L. 106-170 (1999)
    allowed states the option of expanding Medicaid
    coverage through a buy-in for disabled working
    individuals.
  • A majority of states have established Medicaid
    buy-in programs
  • See http//cms.hhs.gov/twwiia

44
SSI Benefits and WorkMedicaid Buy-In
  • Income and resource eligibility and out of pocket
    costs vary from state to state in Medicaid Buy-In
    programs.
  • These programs can be a good alternative to 1619b
    for some.
  • But, client must be counseled on the effects of
    cutting ties with the SSI program.

45
How Do I Avoid Problems withSSI When I Work?
  • Be ready
  • Understand the SSI income counting rules and
    their likely impact on your SSI benefit
  • Provide SSA with verifications for all income
    deductions for which you think you are eligible
  • Seek information from WIPA programs

46
How Do I Avoid Problems with SSI When I Work?
  • Report
  • Report to SSA anything that might affect your SSI
    eligibility, e.g., new job, change in pay, bonus,
    loss of job, etc.
  • Report within 10 days of the end of the month in
    which the change occurs ASAP is better.
  • Report in person at your local SSA office if at
    all possible.

47
How Do I Avoid Problems withSSI When I Work?
  • Keep records/copies
  • of everything you provide to SSA
  • of your notices
  • of when, where to whom you spoke provided
    records
  • of reports to SSA.

48
SSDI and Work
49
What is SSDI(Social Security Disability
Insurance)?
  • SSDI is a Social Security insurance program that
    pays a monthly cash benefit to people who are
  • Disabled same definition of disability as with
    SSI (for adults), AND
  • Insured worked and earned enough Social
    Security credits by paying FICA taxes. For most
    adults, this means working for about 5 of the
    last 10 years before becoming disabled.
  • SSDI has no income or asset limits.

50
Earning Credits to Become Insured for SSDI
  • You earn 1 credit for every 1050 earned (in
    2008). 4200 earned 4 credits.
  • You can earn a maximum of 4 credits/year.
  • Must pay FICA taxes. No credits for under the
    table work.
  • Special SSDI Rule for Young Adults
  • To be insured for SSDI, adults under 24 years old
    only need to earn 6 credits in the 3 years before
    they become disabled.

51
More About SSDI
  • The SSDI benefit amount depends on how much you
    earned. Average 978, but could be much lower
    or higher. Maximum is 2185/month n 2008.
  • Certain dependents of the wage earner may be
    eligible for benefits on SSDI recipients wage
    record.
  • SSDI recipients receive Medicare after 24 months
    of eligibility (Recipients with ALS do not have
    to wait 24 months.) SSDI recipients may also
    qualify for Medicaid, but need to apply for it.

52
How Does Work Affect SSDI ?
The rules for SSDI and work are completely
different than for SSI. Its like being on
another planet.
53
SSDI Work Incentive Scheme
9 Month Trial Work Period
36 Month Extended Period Of Eligibility
The Cliff Benefit Termination if over SGA
54
What I Need to Know
  • Have I completed my 9-month Trial Work Period?
    When?
  • If yes, when does/did my 3-year Extended Period
    of Eligibility end?
  • Are my countable earnings above the Substantial
    Gainful Activity level?

55
Trial Work Period20 CFR 404.1592
  • 9 service months in any 60-month period
  • Keep your benefits no matter how much you earn as
    long as you remain medically disabled
  • 1 Trial Work Period per period of disability

56
Trial Work Period
  • You only use a trial work month if you perform
    services, meaning
  • Earn more than 670 gross wages per month in 2008
    (this amount changes every year)
  • If self-employed, earn more than 670/month gross
    or work more than 80 hours/month
  • Not just training or therapy
  • No deductions for IRWEs no averaging earnings
    during TWP

57
Trial Work Period Example 1
  • Victor went back to work for the first time after
    getting on SSDI. His gross earnings were
  • 400 in January 2008
  • 680 in February 2008
  • 1000 in May 2008
  • 500 in June 2008
  • How many trial work months did he use?
  • Should he get his SSDI for these months?

58
Trial Work Period Example 2
  • Marias gross earnings went over the trial work
    month services limit in the following months
  • 1. June 2001
  • 2. January 2002
  • 3. February 2002
  • 4. March 2002
  • 5. April 2002
  • 6. May 2002
  • 7. June 2002
  • 8. August 2007
  • 9. September 2007
  • 10. October 2007
  • 11. November 2007
  • What month of her TWP is she in as of November
    2007?

59
Example 2 The Answer
  • TWP 1 - June 2001
  • TWP 2 - January 2002
  • TWP 3 - February 2002
  • TWP 4 - March 2002
  • TWP 5 - April 2002
  • TWP 6 - May 2002
  • TWP 7 - June 2002
  • TWP 1 - August 2007 (60-mo. Lookback to Aug.
    2002)
  • TWP 2 September 2007
  • TWP 3 - October 2007
  • TWP 4 - November 2007

60
The Extended Period of Eligibility An All or
Nothing Deal
  • 36 months starting month after the 9th trial work
    month.
  • Get SSDI in months where countable earnings are
    the SGA level, as long as remain medically
    disabled.
  • Get no SSDI in months earnings are at or over SGA
    level.
  • 20 CFR 404.1592a.

61
Cessation and Grace Period
  • 1st month of SGA after the Trial Work Period is
    called the cessation month.
  • Despite SGA, SSDI benefits are payable for the
    cessation month and the following 2 months.

62
EPE Example
  • The 9th month of Victors Trial Work Period was
    December 2005. When does his EPE run?
  • Answer January 2006 through December 2008.

63
Is it SGA?
  • Work must be substantial and gainful.
  • In 2008, work presumed to be SGA if gross
    countable earnings are 940/month or higher
    (1550/month or higher if SSDI for blindness).
  • Three additional SGA tests for self-employed,
    based on worth of work.

64
How to Count Earnings for SSDI
  • Earnings count when they are earned, not when
    paycheck is received, unlike SSI.
  • Count gross earnings unless self-employed.
  • Only pay for work activity counts
  • Not pay for sick or vacation time
  • Only bonus pay if based on productivity
  • Earnings put into pre-tax Cafeteria and
    retirement plans count
  • POMS DI 10505.010.

65
Is It SGA? Deductions Available Throughout the
EPE
  • IRWEs (slides 14 20)
  • Subsidies. 20 CFR 404.1574(a)
  • Employer pays more than actual value of services
    performed ( amount or reduction)
  • Special Conditions. 20 CFR 404.1573
  • E.g., close and continuous supervision work done
    by job coach frequent rest periods
  • Unincurred Business Expenses (self-employment
    only) e.g., free help. 20 CFR 404.1575.

66
Is it SGA? Not if its an Unsuccessful Work
Attempt (UWA
  • UWA. 20 CFR 404.1574(c)
  • Yes - If work ended or reduced below SGA within
    3 months due to the impairment or removal of
    special conditions related to the impairment.
  • Maybe If work ended or went below SGA after 3
    months and before 6 months. Look at absences,
    work performance, special conditions, etc.
  • No If work lasted more than 6 months.
  • UWA does not apply after first month of SGA after
    end of trial work period (cessation).

67
Is it SGA? Averaging Earnings
  • Average over entire work period unless
  • Significant change in work patterns or earnings,
    or
  • Change in SGA level (e.g., yearly COLA)
  • No averaging earnings after first month of SGA
    after end of trial work period (cessation).
  • 20 CFR 404.1574a, 404.1592a

68
SGA Example
  • Elsa is in her EPE. Her gross earnings in
    January 2008 were 1000.
  • In January 2008 she paid for the following
    impairment related work expenses
  • 25 for prescriptions
  • 75 for therapy
  • 50 for her support dog Max
  • Are her countable earnings over SGA for January?

69
The Answer
  • No. Its not SGA (940 or more in gross in
    earnings in 2008).
  • IRWEs 25 75 50 150
  • Gross income 1000 150 IRWEs
  • 850 countable earnings for SGA purposes

70
After the EPE The Cliff20 CFR 404.1592a
  • SSDI eligibility ends with the first SGA after
    the end of the EPE.
  • IRWEs, subsidies and special conditions
    deductions apply after the EPE.
  • Averaging and Unsuccessful Work Attempt do not
    apply after the EPE, if SGA during EPE .
  • If SSDI terminated due to SGA after EPE, no right
    to continuing benefits during appeal, unlike
    medical Continuing Disability Review.

71
SGA and SSDI on the Basis of Blindness
  • Under age 55, SGA applies the same as for those
    eligible on the basis of disability.
  • The only difference is that the presumed SGA
    standard is higher -1550 in gross monthly wages
    in 2008.
  • 20 CFR 404.1586(a)(3).

72
SGA and SSDI on the Basis of Blindness
  • At 55 and older, SGA does not result in loss of
    SSDI, unless the work shows the ability to use
    skills and abilities comparable to those in
    gainful activity done with some regularity and
    over a substantial period of time prior to age 55
    or becoming blind, whichever is later. 20 CFR
    404.1586(a)(4).

73
Expedited Reinstatement20 CFR 404.1592b, 416.999
  • New Application OR
  • Expedited Reinstatement of Benefits (SSDI and
    SSI)
  • If benefits terminated due to earnings
  • Unable to perform SGA in month of application
  • Disabled due to the same or related impairments
    as those for which previously on benefits and
  • Request reinstatement within 60 months from date
    of termination.
  • Up to 6 months of provisional benefits
    available while eligibility is decided.

74
Extended MedicarePOMS DI 55001.001
  • Medicare continues during EPE even if not
    eligible for SSDI cash.
  • If SSDI terminates after EPE due to SGA, Medicare
    continues for up to 54 additional months, if
    remain medically disabled.
  • Must pay Medicare Part B premiums quarterly if no
    SSDI to deduct from.

75
How To Avoid Problems withSSDI When Working
  • Be Ready
  • Understand the Trial Work Period, the EPE, SGA,
    and how Social Security counts earnings for SSDI.
  • Keep records of the amount earned each month, and
    of deductions such as IRWEs and subsidies.
  • Know if youve finished your trial work period
    where you are in your EPE if your EPE has ended.
  • Seek information from a WIPA program.

76
How Do To Avoid Problems withSSDI When Working
  • Report. Report. Report.
  • Report to SSA when you go back to work, your
    earnings, and changes in jobs or earnings.
  • Report within 10 days of the end of the month in
    which the change occurs. The sooner the better.
  • Report in person at your local SSA office if at
    all possible, and get and keep a receipt.

77
How Do To Avoid Problems withSSDI When Working
  • Verify and Record
  • Provide SSA with verification of all earnings and
    all income deductions you think you are eligible
    for.
  • Keeps copies of everything you give to SSA and a
    keep a record of when, where to whom you gave
    it.

78
Questions About SSDI and Work?
  • Consult with WIPA program staff.
  • Visit SSAs website at www.socialsecurity.gov
  • Read Social Securitys Red Book on Work
    Incentives. http//www.ssa.gov/redbook/eng/main.ht
    m
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