Vol. 9, No. 3 Summer 2001	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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Working With a Disability:
It Can Be Done!

Frequently Asked Questions About Social Security Work Incentives

By Laura J. Waterland, Staff Attorney, Disabilities Law Program

People with disabilities continue to be under-represented in the work force. Despite legislation designed to open employers’ doors for people with disabilities, such as the Americans with Disabilities Act, people with disabilities continue to post high unemployment rates.1

For many years, the Social Security Administration (SSA) has developed and promoted work incentive rules that encourage recipients of SSDI and SSI to access vocational rehabilitation services, to attempt work, and to maintain eligibility for cash benefits and medical insurance as earnings increase. 2 One new piece of legislation, the Ticket to Work and Work Incentives Improvement Act, or TWWIIA, seeks to enhance existing incentives as well as expand health insurance eligibility.

This article will briefly summarize how existing SSA, Medicaid and Medicare rules can ease the way into employment for people with disabilities. These rules are very complex, so please seek advice from SSA or from advocates to see how the rules might apply to your particular set of circumstances.

Q: How can I work and retain my SSDI and SSI cash benefits?

Both the Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) 3 programs have rules that allow a recipient to work and receive benefits, to maintain eligibility even though no cash benefits are being paid due to earnings, and to extend medical benefits when earnings disqualify a recipient from cash benefits.

Social Security Disability Income

SSDI rules encourage individuals to attempt to work by allowing a Trial Work Period (TWP) of nine months. Months in which the individual receives earnings of $530 4 or more count as a TWP month. The nine months must occur within a rolling 60-month period. During the TWP, the individual may earn any amount and continue to receive a full monthly benefit.

After the TWP, the Social Security Administration will conduct a review to see whether the work is “substantial gainful activity” (SGA). Earnings of $740.00 or more per month is the current standard for SGA. If SSA finds that SGA is occurring, then the recipient will get three more months of benefits, then cash benefits will stop. If the individual is found not to be engaging in SGA, then cash benefits will continue.

Certain SSDI rules allow individuals to adjust their earnings to arrive at the countable income amount used to evaluate SGA. Impairment-related work expenses (IRWE), and certain subsidies can be deducted from gross earnings before SGA is calculated. IRWE might include work-related costs for attendant services, transportation, assistive technology, medical expenses, and environmental modifications. These deductions can help to maintain cash benefit eligibility by reducing earned income used to calculate SGA.

Finally, once an individual has successfully completed a TWP, a 36-month Extended Period of Eligibility (EPE) will begin in the month following the ninth TWP month. During the EPE, individuals will receive a benefit check for any month in which countable earnings fall under SGA. The individual does not need to reapply for benefits during the EPE. After the EPE, an individual would have to reapply for benefits should it become necessary. Expedited reinstatement of eligibility can be requested within 60 months of benefit termination. During this expedited reinstatement process, an individual is eligible for up to six months of temporary benefits while SSA reviews the case, without risking an overpayment.

Social Security Income

The earned income rules for SSI are not as generous as for SSDI. Nevertheless, SSI recipients can work up to a point and still receive a check. In calculating income, SSA allows a $20.00 general income exclusion, and a $65.00 earned income exclusion. SSA then counts one-half of the remaining earned income. The remaining amount of earned and unearned income is combined to calculate total countable income. SSI payments are reduced by this amount. Once countable income is equal to the monthly benefit amount (currently $530.00 per month), cash benefits cease.

SSI rules allow certain deductions in calculating earned income. These include certain Student-Earned Income Exclusions. As in the SSDI program, SSI recipients are also allowed to deduct the cost of certain impairment-related work expenses (IRWE). SSI recipients can also develop a Plan for Achieving Self-Support (PASS), which allows them to set aside income and/or resources to be used to achieve work goals.

Q: But if I am working, doesn’t that mean by definition that I’m not disabled anymore?

The definition of disability for SSA has two components; medical disability (a medically determinable impairment likely to last at least 12 months or end in death) and vocational disability (the inability to do substantial gainful activity). To be eligible for SSDI or SSI, an applicant must satisfy both components of the disability test, as well as meet other non-disability program criteria.

Generally, SSA conducts continuing disability reviews (CDRs) every three years if medical improvement is possible or every five to seven years if it is not. SSA also conducts a CDR if SSA receives information that an individual has improved, such as a report of SGA-level earnings. Effective January 2002, TWWIIA prohibits a work-triggered CDR for SSDI recipients who have been receiving benefits for more than 24 months. SSA can continue to conduct CDRs according to its regular schedule. A CDR will also not occur during participation in a vocational rehabilitation program, including a ticket to work program under TWWIIA.

Q: How can I keep my health insurance once I start working and lose my benefits?

SSDI

SSDI recipients are eligible to receive Medicare, 5 Parts A (hospitalization) and B (supplemental medical insurance), although there is a 24-month waiting period from the date of SSDI eligibility in order to receive Medicare. 6 SSDI recipients who lose cash assistance due to work remain eligible for Medicare for 93 months. This 93-month eligibility period commences at the end of the TWP. The 24-month waiting period must still be satisfied and counts as part of the 93-month period, if they coincide. Individuals who are working at SGA but are not medically improved qualify for this extension of Medicare.

Individuals who have exhausted the 93-month Medicare eligibility period may “buy-in” to Medicare by paying premiums, so long as they remain “medically disabled.” The Qualified Disabled and Working Individuals (QWDI) program, administered by the Medicaid program, can help pay Part A Medicare premiums for individuals who have lost free Part A due to work.

SSI

SSI recipients do not have a waiting period before becoming eligible for Medicaid. However, the SSI program does not have a three year EPE or the lengthy extension of benefits for people who lose benefits due to earnings found in the SSDI and Medicare programs.

If you have been ineligible for SSI for 12 months or less, for a non-medical reason such as earned income, you may be able to seek reinstatement of SSI and/or Medicaid without a new application. Should you lose your SSI due to work, you may be eligible for continuing Medicaid benefits under Section 1619(b). To qualify under § 1619(b), you must have been eligible for SSI cash benefits for at least one month, be disabled, meet other eligibility rules, such as resource limits, need Medicaid in order to work, and have gross earned income insufficient to replace SSI, Medicaid and any publicly-funded attendant care. Section 1619(b) recipients are entitled to automatic reinstatement of SSI if earnings fall below allowable levels.

TWWIIA 7 expanded the State’s ability to extend Medicaid coverage to lower income people with disabilities. States now can opt 8 to create a buy-in program for Medicaid and to extend Medicaid coverage for those with incomes up to 250% of the Federal Poverty Level who meet the SSI definition of disabled and would be eligible for benefits if not for earnings. States can also extend Medicaid to individuals whose condition has improved to the point that they have lost SSI or SSDI but they continue to have a severe, medically determinable impairment.

Q: I need some training before I try to work. How do I get these services?

Vocational rehabilitation (VR) has always been an important element in SSA’s strategy to encourage people with disabilities to work. TWWIIA increased choice in available VR services by creating a Ticket Program. SSDI and SSI recipients will receive a ticket that they can use to obtain employment-related services, VR services, or other support services, such as assistive technology. The recipient can assign the ticket to any SSA-approved Employment Network. The Network then devises an individualized plan in coordination with the recipient. Recipients need not use the ticket, and can opt for traditional vocational rehabilitation services through the state VR agency.

Delaware is in the first phase-in of the Ticket to Work Program. Maximus is serving as national Program Manager for the Ticket Program, under contract to SSA. Their toll free numbers are 866-968-7842 and 866-833-2967 (TTY).

TWWIIA also includes funding for advocacy services for beneficiaries. The Disabilities Law Program (DLP) of Community Legal Aid Society is the designated protection and advocacy system in Delaware, and can assist with information, advice, referral and other services to individuals accessing services under TWWIIA. Please call the Disabilities Law Program at 302-575-0690, 302-575-0696 (TTY). The DLP is also the protection and advocacy system for individuals with mental illness, developmental disabilities, and physical disabilities.

SSA work incentive rules can be used creatively to make the transition to work easier for many people with disabilities, especially SSDI recipients. To reiterate, careful consideration must be given to each individual’s circumstances in crafting an employment plan that maximizes the benefit of these rules. In Delaware, United Cerebral Palsy of Delaware has contracted with SSA to provide statewide benefits planning services. The MEANS Program (Making Employment A New Success) offers a tailored analysis of the impact work can have on the range of public benefits, including, SSI, SSDI, food stamps and subsidized housing, so that an individual can make an informed choice about entering the workplace. The MEANS Program’s toll-free number is 1-800-640-9336.

Notes

1 According to data from a 1998 National Organization On Disabilities/Harris Poll of Americans with Disabilities, the unemployment rate for people with disabilities is around 70%, while the rate for the total non-disabled population is around 18%
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2 Of course, cost savings through reduction of the rolls is an important motivation in SSA work incentives; however, policy makers will tell you that working has the potential to dramatically increase the standard of living of recipients and their dependents.
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3 SSDI is an insurance-based disability scheme for individuals with a significant work history who become disabled. SSDI recipients are eligible for Medicare after a 24-month waiting period. SSI is a needs-based program for elderly and disabled individuals who have not worked a sufficient number of quarters to be eligible for SSDI. SSI recipients receive Medicaid. Individuals can be eligible for both programs, depending on the SSDI payment amount.
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4 This earnings figure recently jumped to $530 from $200 per month. This figure is now linked to the national average wage index.
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5 Medicare recipients must pay a premium for Part B. However, several programs (QMB, SLMB, QI-1 and QI-2) administered by the State Medicaid office can pay Medicare premiums for lower-income SSDI recipients.
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6 Additionally, there is a five-month waiting period for receipt of cash benefits from the date of eligibility. During that time, individuals may be eligible for SSI benefits and consequently Medicaid. Delaware recently created a Medicaid eligibility category for former SSI recipients who lose SSI due to receipt of SSDI cash benefits, but are not yet eligible for Medicare and are not eligible for Medicaid under another program. Low income SSDI recipients may be eligible for Medicaid under the Low Income Adults Program until Medicare is available.
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7 While many employers offer health insurance to employees, people with disabilities, who frequently have chronic health issues, can be severely affected by pre-existing condition exclusions. The Health Insurance Portability and Accountability Act of 1996 (HIPAA), 26 U.S.C. Subtitle K, Chapter 100 is an insurance reform law that in part encourages people to maintain insurance and seeks to remove insurance as a factor in a decision either to take a job or change jobs. While HIPAA’s rules are extremely complicated, the law allows people to establish credits for months that they are covered by insurance. These credits are portable from job to job, so long as there are no significant lapses in coverage. Insurers can impose no more that one 12-month pre-existing condition exclusion on an individual. Once an individual has twelve “creditable months” of coverage, an individual should not be subject to a pre-existing exclusion. Insured months under a public insurance program can count as “creditable” insurance.
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8 Delaware has not yet taken advantage of these options to extend Medicaid coverage to the working people with disabilities.
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