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Department of Health and Human Services Social Security Administration Office of Programs Office of Disability SSA Publication No. 64-030 June 1991 ICN 436900 Booklet title: "Big Red Book On Work Incentives--A Summary Guide to Social Security and Supplemental Security Income Work Incentives for People With Disabilities ----------------------------------------------------------------------- TABLE OF CONTENTS Introduction to Work Incentives for People With Disabilities.P.1 SSDI and SSI Program Information.............................P.3 Eligibility Requirements................................P.5 How We Figure Payment Amounts...........................P.6 Waiting Period .........................................P.7 Medicare Qualifying Period--SSDI Only...................P.8 Substantial Gainful Activity............................P.9 When We Review a Disability Case........................P.10 Overview of Work Incentives..................................P.11 SSDI and SSI Work Incentives.................................P.17 Impairment-Related Work Expenses........................P.19 Subsidies...............................................P.27 Continued Payment Under a Voc.Rehab.Program (Sect. 301).P.28 SSDI Work Incentives.........................................P.29 Trial Work Period.......................................P.31 Extended Period of Eligibility..........................P.33 Continuation of Medicare Coverage.......................P.36 Medicare for People With Disabilities Who Work..........P.38 SSI Work Incentives..........................................P.39 Earned Income Exclusion.................................P.41 Student Earned Income Exclusion.........................P.42 Blind Work Expenses.....................................P.43 Plan for Achieving Self-Support.........................P.45 Property Essential to Self Support......................P.47 Section 1619 Work Incentives............................P.48 Special SSI Pmnts.for People Who Work (Sect.1619a).P.48 Continued Medicaid Eligibility (Section 1619b).....P.48 Special Benefits for Sect.1619 Recipients Who Enter a Medicaid Facility ...............................P.50 Reinstating Eligibility Without a New Application..P.52 Glossary.....................................................P.52 Addresses of the Social Security Administration Regional Offices .............................................................P.55 _____________________________________________________________________ Page 1 (SSI, SSDI) INTRODUCTION TO WORK INCENTIVES FOR PEOPLE WITH DISABILITIES REASON FOR THIS BOOKLET One of the Social Security Administration's highest priorities is to help beneficiaries with disabilities achieve a better and more independent lifestyle by helping them take advantage of employment opportunities. President Bush has stated to people with disabilities: " . . . you belong in the economic mainstream. We need your talents in America's work force. Disabled Americans must become full partners in America's opportunity society." We at Social Security take these words very seriously and intend to do our part to remove the barriers which exist that prevent this goal from being achieved. The enactment of the Americans with Disabilities Act (ADA) is a major step in the continued progress toward full empowerment for people with disabilities. Our mission to encourage employment and productivity is in keeping with the mandate provided by the ADA and other significant legislation such as the Rehabilitation Act and the Development Disabilities Assistance and Bill of Rights Act. This booklet was prepared to assist professionals in the public and private sectors who work with people with disabilities. Your role as counselor, educator, representative or advocate provides you with communication opportunities not directly available to Social Security staff. By becoming familiar with the work incentive provisions in this booklet, you can help people with disabilities and their families make important decisions about employment. This booklet is a guide to help you understand our work incentives. It is not intended to be used in making determinations about eligibility or benefits in particular cases. A person who needs information on a particular case should contact the local Social Security of office. BACKGROUND The Social Security Administration directs two disability programs: * Social Security Disability Insurance (SSDI). * Supplemental Security Income (SSI). ----------------------------------------------------------------------- Page 2 (SSI, SSDI) These programs are similar in many respects but also have important differences, some of which are explained later in this booklet. PURPOSE OF WORK INCENTIVES The SSDI and SSI programs should not be viewed as exclusive and permanent sources of income to the person with disabilities. They should, in every case possible, be used as stepping stones to improving a person's economic condition. Work incentives are intended to give beneficiaries the support they need to move from benefit dependency to self sufficiency. The work incentives explained in this booklet are designed to help people with disabilities enter or reenter the work force by protecting their entitlement to cash payments and/or Medicaid or Medicare protection, until they can support themselves. ORGANIZATION OF THIS BOOKLET Because some people receive both SSDI and SSI payments and others receive only SSDI or SSI, the information in this booklet is grouped into the following five sections: * general SSDI and SSI program information; * an overview of SSDI and SSI work incentives; * work incentives that apply to both programs; * SSDI only work incentives; * SSI only work incentives; To help you identify and apply each work incentive, the top right-hand corner of the page explaining each incentive is labeled to show the program(s) to which the incentive applies. REPLACEMENT OF PREVIOUS PUBLICATION This booklet replaces and obsoletes all previous editions. ---------------------------------------------------------------------- Page 3 (Photo) Page 4 (Blank) (SSI, SSDI) ----------------------------------------------------------------------- Page 5 (SSI, SSDI) ELIGIBILITY REQUIREMENTS This section gives basic information about the SSDI and SSI programs so you can better understand how the work incentives apply. The specific provisions cited here are not work incentives. SSDI To be eligible for SSDI, a person must: * have worked and paid Social Security taxes (F.I.C.A.) for enough years to be covered under Social Security; some of the taxes must have been paid in recent years; * be considered medically disabled; * not be working or working but earning less than the substantial gainful activity level. SSI To be eligible for SSI based on a medical condition, a person must: * have little or no income or resources; (Refer to the Glossary for definitions of income and resources.) * be considered medically disabled; * initally not be working but earning less than the substantial gainful activity level. Once on the rolls, work activity does not affect a person's continuing eligibility. Work activity does not affect initial or continuing eligibility for a person who is blind. ----------------------------------------------------------------------- Page 6 (SSI, SSDI) HOW WE FIGURE PAYMENT AMOUNTS SSDI The SSDI payment amount is based on a worker's lifetime average earnings covered by Social Security. The payment amount may be reduced by workers' compensation payments (including black lung payments), and/or public disability benefits (e.g. certain State and civil service disability benefits). It is not affected by other income resources. SSI The SSI payment amount is based on the amount of other income which the person receives, hos or her living arrangement, and the State in which he or she lives. The basic payment is known as the Federal Benefit Rate. The Federal Benefit Rate is adjusted each year to compensate for cost-of-living increases. Most States pay an additional amount known as a State supplement. The amount and qualifications for these supplements vary from State to State. To figure the SSI payment amount, we add the Federal Benefit Rate and the State supplement and then subtract the person's countable income. (See page 41.) Countable income includes income received by the person, or some income received by the person's spouse, or parent(s). Once a child turns age 18, the parents' income and resources are no longer considered in determining the child's eligibility or payment amount. Not all income that a person receives is counted. For example, any part of a schlorship or grant that is used to pay for tuition, books, fees or related educational expenses is not counted. The sections on work incentives explain some of the ways that income can be excluded. ----------------------------------------------------------------------- Page 7 (SSI, SSDI) WAITING PERIOD SSDI A worker who becomes disabled must wait 5 months after disability begins before receiving SSDI benefits. No new waiting period is required if a worker returns to the disability rolls within 5 years of leaving the rolls. (NOTE: Children, widows, and widowers are subject to different rules.) SSI No waiting period is required before receiving SSI benefits. ----------------------------------------------------------------------- Page 8 (SSDI) MEDICARE QUALIFYING PERIOD--SSDI ONLY WHAT IT IS It is a 24-month period after the 5-month waiting period during which a new beneficiary does not have Medicare coverage. A new beneficiary's Medicare coverage begins after he/she has received benefits for 24 months. During this qualifing period for Medicare, an SSDI beneficiary may be eligible for health insurance through a former employer. The beneficiary should contact the employer to find out about it. HOW MONTHS ARE COUNTED 1 month is counted for each month of SSDI entitlement after the 5-month waiting period. WHEN PREVIOUS PERIODS COUNT Months in previous periods of disability may be counted towards the 24- month Medicare qualifing period if the new disability begins within: * 60 months after the termination of workers with disabilities' benefits, or * 84 months after the termination of disabled widows' or widowers' benefits or child benefits. ----------------------------------------------------------------------- Page 9 (SSI, SSDI) SUBSTANTIAL GAINFUL ACTIVITY WHAT IT IS Substantial gainful activity is the performance of significant and productive physical or mental work for pay or profit. HOW MUCH IT IS The substantial gainful activity level is average countable earnings over $500 per month for non-blind beneficiaries and effective January 1, 1991, over $810 per month for SSDI beneficiaries who are blind. We will deduct from gross earnings the cost of items a persons needs in order to work and the value of support a person needs on the job due to the impairment before we decide if work is substantial gainful activity. HOW IT APPLIES SSDI It applies to SSDI in determining initial and continuing entitlement. SSI It applies to SSI only in determining the initial eligibility for SSI disability payments. It does not apply to SSI beneficiaries who are blind. ----------------------------------------------------------------------- Page 10 (SSI, SSDI) WHEN WE REVIEW A DISABILING CASE HOW OFTEN REVIEWS ARE DONE We review a disability case periodically to see if a person's condition has medically improved or if he/she can perform substantial gainful work. The timing of these reviews is described below: * When the original disabling condition is expected to improve, we review the case on or about the date the improvement is expected. * When medical improvement is possible, we review the case after 3 years. * When medical improvement is not expected, we review the case after 7 years. * When we receive information that the person may have returned to work or appears to have improved, we review the case at the time we receive the information. * When an SSI recipient becomes eligible for benefits under section 1619 or when there are changes in the 1619 status, we review the case at the time of eligibility or change, but not more often than once a year. If we find the person is no longer disabled because of medical improvement, we stop benefits unless he or she is in a vocational rehabilitation program. (See "Continued Payment to Individuals Under a Vocational Rehabilitation Program (Section 301)" on page 28.) ----------------------------------------------------------------------- Page 11 (photo) Page 12 (Blank) ----------------------------------------------------------------------- Page 13 (SSDI) OVERVIEW OF WORK INCENTIVES HOW THEY HELP PEOPLE Most people want to work. It is important for disability beneficiaries to understand that they can still receive benefits while they try to work. Anyone who represents or deals with working SSDI or SSI beneficiaries should encourage them to contact the Social Security Administration about work incentives and how they can affect their benefits. SSDI There are many work incentives that help people who would like to work. These incentives provide support over a period of years to allow the disability beneficiary to test the ability to work and gradually become self-supporting and independent. A person has at least 4 years to test the ability to work, including full cash payments during the first 12 months and a period in which cash benefits can be started again without a new application. The person continues to have Medicare coverage during this time. Once Medicare stops due to the work activity, he/she can elect to buy coverage as long as he/she remains disabled. If the person becomes disabled again within 5 years after the prior period of disability ends, he/she does not have to serve another 5-month waiting period to get benefits nor wait to again become entitled to Medicare. The SSDI work incentives are: * Imparment-Related Work Expenses * Trial Work Period * Extended Period of Eligibility * Continuation of Medicare Coverage * Medicare for People With Disabilities Who Work Each work incentive is discussed in detail later in this booklet. While the above information gives you an idea of some of the support offered to SSDI beneficiaries who want to work, it is important to view all of the work incentives as a total package to fully appreaciate the level of support offered to help people achieve their goal of greater economic independence. ----------------------------------------------------------------------- Page 14 (SSI) SSI Over 3 million Americans receive SSI because of a disability. many of these people would like to work but are afraid that if they do, they will lose their SSI checks and Medicaid coverage. The SSI work incentives offer these people ways to continue receiving their SSI checks and/or Medicaid coverage while they work. Some of the incentives can increase their net income to help cover special expenses they may have in order to work, to train for a job, or to set up their own business. Once a person begins to receive SSI, work activity will not cause SSI to stop as long as the person is still disabled. Even if the person cannot receive SSI checks because of the amount of earnings, eligibility for Medicaid may continue indefinitely. In many cases, if a person loses his/her job or is unable to continue working, he/she can begin receiving checks again without filing a new application. The SSI work incentives are: * Impairment-Related Work Expenses * Earned Income Exclusion * Student Earned Income Exclusion * Blind WOrk Expenses * Plan for Achieving Self-Support (PASS) * Property Essential to Self-Support * Section 1619 Work Incentives Each provision is discussed in detail later in this booklet. These incentives offer persons who receive SSI because of disability an opportunity to overcome some of the barriers that may have kept them from working. ---------------------------------------------------------------------- Page 15 (SSI, SSDI) HELP FOR THE MEDICALLY RECOVERED PERSON SSDI and SSI The work incentive provisions do not apply once a person medically recovers. However, SSI has a provision (Section 301) which helps people who medically recover to gain a better chance for permanent independence and self-sufficiency. Under certain conditions, cash payments and health insurance coverage continue for people who have medically improved and are no longer disabled, as long as they are participating in an approved State vocational rehabilitation program. Benefits continue until the rehabilitation services are completed. Under a new law, beginning November 1, 1991, a person can be participating in any approved vocational rehabilitation program, not just a State program, to have benefits continue. ----------------------------------------------------------------------- Page 16 (Blank) Page 17 (Photo) Page 18 (Blank) ----------------------------------------------------------------------- Page 19 (SSI, SSDI) IMPAIRMENT-RELATED WORK EXPENSES WHAT THEY ARE The costs of certain impairment-related items and services that a person needs to work are deducted from earnings in figuring substantial gainful activity, even if these items and services are also needed for non-work activities. The deductions can be made if: * the cost of the item or service is paid by the person with the disability; and * the person has not been, nor will be, reimbursed for the expense. HOW THEY ARE DEDUCTED The amount a person pays towards the cost of the items and services is deducted from earnings. Only after these expenses are deducted is a determination made as to whether earnings represent substantial gainful activity. Impairment-related work expenses can reduce earnings below the substantial gainful activity level. HOW THEY APPLY TO SSI MONTHLY PAYMENTS Impairment-related work expenses are also excluded from earned income in figuring an SSI beneficiary's monthly payment amount. WHO DETERMINES WHETHER EXPENSES ARE DEDUCTED The Social Security Administration field office determines whether expenses may be deducted from earnings. In making this determination, the field office may: * request the beneficiary or the representative to verify the need for an impairment-related work expense. (This may be done by telephone or in writing.) * ask a beneficiary or a representative if: - the item/service is necessary to enable the person to perform his or her job; - the person is personally paying for this item/service; - some other source is paying for the item/service, how long that funding will continue. ----------------------------------------------------------------------- Page 20 (SSI, SSDI) WHEN EXPENSES ARE DEDUCTIBLE Impairment-related work expenses are deductible for both substantial gainful activity and SSI payment purposes when: * the expense enables a person to work. * the person, because of a severe physical or mental impairment, needs the item or service for which the expense is incurred in order to work. * the cost is paid by the person with a disability and is not rembursed by another source (e.g. Medicare, medicaid, private insurance). * the expense is "reasonable"--that is, it represents the standard charge for the item or service in the person's community. * the expense (for substantial gainful activity purposes is paid in a month in which the person with a disability is or was working. (Occasionally, an impairment-related work expense may be used before the first and after the last month of work activity.) * the expense (for SSI payment purposes) is paid in a month in which earned income is received or work is performed while the person used the impairment-related item or service. (In unusual situations, when the payment of an impairment-related work expense does not correspond to a work month, it may be possible to deduct it.) ----------------------------------------------------------------------- Page 21 (SSI, SSDI) EXAMPLES OF EXPENSES LIKELY AND NOT LIKELY TO BE DEDUCTIBLE DEDUCTIBLE 1. Attendant Care Services: a. Performed in the work setting. b. Performed in the process of assisting in preparing for work, the trip to and from work and after work (e.g., bathing, dressing, cooking, eating). c. Services which incidentally also benefit the family (e.g., cooking meal for individual also eaten by family). d. Services performed by a family member for a cash fee where the family member suffers an economic loss by reducing or terminating work in order to perform such services. NOT DEDUCTIBLE 1. Attendant Care Services: a. Performed on non-workdays or involving shopping or general homemaking (e.g., cleaning, laundry). b. Services performed for someone in the family other than the beneficiary (e.g., babysitting). c. Services performed by a family member for a cash fee where the family member suffers no economic loss. d. Services performed by a family member for payment "in kind" (e.g., room and board) whether or not the family member suffers economic loss. ----------------------------------------------------------------------- Page 22 (SSI, SSDI) DEDUCTIBLE 2. Transportation Costs: a. The cost of structural or operational modifications to a vehicle, which the person needs in order to drive to work or be driven to work, even if the vehicle is also used for non-work purposes. b. The cost of driver assistance or taxicabs where such special transportation is not generally required by unimpaired individuals in the community. c. Mileage expense for an approved vehicle at a rate determined by the Social Security Administration and limited to travel related to employment. 2. Transportation Costs: NOT DEDUCTIBLE a. The cost of a vehicle whether modified or not. b. The cost of modification to a vehicle not directly related to the impairment or critical to the operation of the vehicle (e.g., paint or decor preferences). c. The cost of travel related to obtaining medical items or services. ----------------------------------------------------------------------- Page 23 (SSI, SSDI) DEDUCTIBLE 3. Medical Devices Wheelchairs, hemodialysis equipment, pacemakers, respirators, traction equipment, braces (arm, leg, neck, back). 4. Work-Related Equipment and Assistants One-handed typewriters, typing aids (e.g., page turning devices), measuring instruments, reading aids for blind people, electronic visual aids, braille devices, telecommunications devices for people with hearing impairments and special work tools. Expenses for a person who serves as a reader for a visually impaired person, expenses for an interpreter for a deaf person, and expenses for a job coach. 5. Prosthesis Artificial hip and artificial replacement of an arm, leg or other part of the body. NOT DEDUCTIBLE 3. Medical Devices Any device not used for a medical purpose. 4. Work-Related Equipment and Assistants Any work-related device not paid for by the person with a disability or, in the case of a self-employed individual, equipment previously deducted as a business expense. 5. Prosthesis Any prosthetic device that is primarily for cosmetic purposes. ----------------------------------------------------------------------- Page 24 (SSI, SSDI) DEDUCTIBLE 6. Residential Modifications: a. Individual Employed Outside Home Modifications to the exterior of the house which permit access to the street or to transportation (e.g., exterior ramps, exterior railings, pathways, etc.) b. Individual Self-Employed at Home Modifications made inside the home in order to create a work space to accommodate an impairment (e.g., enlargement of a doorway leading into an office or workroom, the modification of office space to accommodate problems in dexterity, etc.). NOT DEDUCTIBLE 6. Residential Modifications: a. Individual Employed Outside Home Modifications to the house primarily intended to facilitate functioning in the home environment (e.g., enlargement of interior door frames, lowering of kitchen appliances and bathroom facilities, interior railings, stairway chairlift, etc.). b. Individual Self-Employed at Home Any modification expenses previously deducted as a business expense in determining substantial gainful activity. ----------------------------------------------------------------------- Page 25 (SSI, SSDI) DEDUCTIBLE 7. Routine Drugs and Routine Medical Services Regularly prescribed medical treatment or therapy that is necessary to control a disabling condition (even if unsuccessful), such as anti-convulsant drugs or blood level monitoring, radiation treatment or chemotherapy, corrective surgery for spinal disorders, anti-depressant medication, etc. The physician's fee relating to these services is deductible. 8. Diagnostic Procedures Objective of procedure must be related to the control treatment or evaluation of a disabling condition (e.g., electroencephalograms, brain scans, etc.). NOT DEDUCTIBLE 7. Routine Drugs and Routine Medical Services Drugs and/or medical services used for only minor physical or mental problems (e.g., routine physical examinations, allergy treatment, dental examinations, optician services, etc.). 8. Diagnostic Procedures Procedures paid for by other sources (e.g., Vocational Rehabilitation agency, Medicaid) or not related to a disabling condition (e.g., allergy testing). ----------------------------------------------------------------------- Page 26 (SSI, SSDI) DEDUCTIBLE 9. Non-Medical Appliances and Devices In unusual circumstances, when devices or appliances are essential for the control of a disabling condition either at home or in the work setting (e.g., an electric air cleaner for an individual with severe respiratory disease), and this need is verified by a physician. 10. Other Items and Services a. Medical supplies of an expendable nature (e.g., incontinence pads, elastic stockings, catheters, etc.). b. The cost of a guide dog, including food, licenses, and veterinary services. NOT DEDUCTIBLE 9. Non-Medical Appliances and Devices Devices used at home or at the office which are not ordinarily for medical purposes (e.g., portable room heaters, air conditioners, humidifiers, dehumidifiers etc.) and for which the individual has no verified medical work-related need. 10. Other Items and Services An exercise bicycle or other device used for physical fitness unless verified as necessary by a physician. ----------------------------------------------------------------------- Page 27 (SSI, SSDI) SUBSIDIES WHAT IT IS A subsidy is support a person receives on the job which could result in more pay than the actual value of the services the person performs. We deduct the value of subsidies when we determine substantial gainful activity. Subsidies do not reduce countable income for SSI. HOW IT APPLIES Some workers with disabilities are not yet able to do a job as well as non-impaired workers without receiving some form of subsidy or work support. Examples of subsidies are: * giving the worker with a disability more supervision than other workers doing the same job for the same pay. * giving the worker with a disability fewer or simpler tasks to complete than other workers doing the same job for the same pay. Only earnings that represent the real value of the work performed are used to determine if work is at the substantial gainful activity level. If an employer has difficulty setting the real value of the work and/or the amount of the subsidy, SSA will help in making a determination of the value of the work. ----------------------------------------------------------------------- Page 28 (SSI, SSDI) CONTINUED PAYMENT UNDER A VOCATIONAL REHABILITATION PROGRAM (SECTION 301) TO WHOM IT APPLIES It applies to persons who are receiving SSDI or SSI benefits who improve medically and therefore are no longer considered disabled by SSA. WHAT IT DOES SSDI and SSI benefits will continue if, at the time disability ceases, the person is participating in an approved State vocational rehabilitation program whose services are likely to enable the person to work permanently. Due to a new law, effective November 1,1991, a person can be participating in any approved vocational rehabilitation program, not just a State program, to have benefits continue. HOW LONG BENEFITS CONTINUE Benefits continue until the rehabilitation services are completed, or until the person discontinues receiving services. WHO MAKES THE DECISION The Social Security Administration, with the aid of State vocational rehabilitation information, determines eligibility for continued payments based on the criterion that the person's participation in the vocational rehabilitation program will increase the likelihood of permanent independence and self-sufficiency. ---------------------------------------------------------------------- PAGE 29 (Photo) Page 30 (Blank) ----------------------------------------------------------------------- Page 31 TRIAL WORK PERIOD HOW IT HELPS PEOPLE Many people with disabilities would like to work but are afraid to try because of concern that their benefits might stop. The trial work period lets people test their ability to work or run a business for at least 9 months in spite of their disability, without affecting their disability benefits. They continue to get full benefits during the trial work period no matter how much they earn. WHEN IT BEGINS Entitlement to a trial work period begins with the month in which the worker with a disability becomes entitled to benefits or the month in which the application is filed, whichever is later. WHAT IS COUNTED AS A TRIAL WORK PERIOD MONTH Each month in which earnings are more than $200 (or over $200 in net earnings or more than 40 hours of work in a month for the self-employed) is counted as a month of the trial work period. When the beneficiary has accumulated 9 such months (not necessarily consecutively), the trial work period is completed. WHAT HAPPENS AFTER IT IS COMPLETED After the trial work period, the Social Security Administration reviews the work. Substantial gainful earnings during or after the trial work period normally indicate that the beneficiary is able to work in spite of a disabling impairment. (See page 9 for a discussion of substantial gainful activity.) * If the work is not substantial gainful activity, SSDI benefits continue. * If the work is substantial gainful activity, cash benefits continue for 3 more months (this is known as the "grace period"); then they stop. The person is now in the extended period of eligibility. ----------------------------------------------------------------------- Page 32 (SSDI) NOTES: Important new legislation provides 2 changes to the trial work period, effective January 1, 1992: 1. A person will not use up his/her trial work period unless the 9 trial work months are completed within a rolling 60-month period. 2. A person will get a new trial work period every time he/she becomes reentitled to a new period of disability by filing a new application. ----------------------------------------------------------------------- Page 33 (SSDI) EXTENDED PERIOD OF ELIGIBILITY WHAT IT DOES The extended period of eligibility is a consecutive 36-month period during which cash benefits will be reinstated for any month the person does not work at the substantial gainful activity level. Benefit checks can be started again without a new application, disability determination or waiting period. This reinstatement of benefits saves critical time for the beneficiary and replaces the loss of earnings. WHEN IT BEGINS The extended period of eligibility begins the month following the end of the trial work period. NOTE: Benefits can be reinstated within the 36-month period. However, benefits may be paid for an even longer period of time if a person is unable to perform substantial gainful activity. HOW IT HELPS PEOPLE The extended period of eligibility reassures the beneficiary that disability benefits can be paid after the trial work period if he/she is unable to perform substantial gainful activity anytime during the 36 months. EXAMPLES EXAMPLE 1 Mr. Ray has been working at the local toy factory despite his arthritis. His 9th month of trial work was December 1987. The field office evaluated his work and found that he was performing substantial gainful activity; eligibility for disability payments ceased in January 1988. He continued to earn above the substantial gainful activity level through April 1988. (During this period, the Disability Determination Service made a medical severity determination and decided that Mr. Ray's impairment was still disabling.) ----------------------------------------------------------------------- Page 34 (SSDI) After Easter, orders dropped off and Mr. Ray was laid off. The field office found that he did not perform substantial gainful activity in May 1988 through August 1988 (inclusive). With the development of the Turnip Patch Doll, orders picked up, and Mr. Ray went back to full-time work. He performed substantial gainful activity from September 1988 through December 1988 (inclusive). Mr. Ray's arthritis got worse, and from January 1989 through April 1989 (inclusive) he worked part-time, not performing substantial gainful activity. In May 1989, feeling better, he went back to full-time work. His earnings have been above the substantial gainful activity level ever since. QUESTION: What was the first month of his extended period of eligibility? ANSWER: January 1988 (the first month immediately following the completion of the 9th month of trial work). QUESTION: If Mr. Ray's earnings continue to be above the substantial gainful activity level, what will be the last month of his extended period of eligibility? ANSWER: December 1990 (the month before the first month of substantial gainful activity after the 36th month). QUESTION: What were the extended period of eligibility months for which he could potentially be paid? ANSWER: January 1988, February 1988, March 1988 (the grace period), May 1988 through August 1988, and January 1989 through April 1989 (non-substantial gainful activity months). EXAMPLE 2 Mrs. Bell began receiving SSDI benefits in January 1982. She returned to work in April 1986. Her trial work period ended in December 1986. In January 1987 the field office evaluated her work and determined it not to be substantial gainful activity and disability payments continued. ----------------------------------------------------------------------- Page 35 (SSDI) Mrs. Bell continued to work at the non-substantial gainful activity level until August 31, 1990. She then obtained a new position in which she earned above the substantial gainful activity level. In October 1990, the field office made a determination that based on her work activity she no longer was eligible for disability payments as of September 1990. QUESTION: What was the first month of her extended period of eligibility? ANSWER: January 1987 (the first month immediately following the completion of the 9th trial work service month). QUESTION: What is the last month of her extended period of eligibility? ANSWER: November 1990 (the second month following the month in which the person's eligibility for disability payments ceases because of work activity). QUESTION: What are the extended period of eligibility months for which she could potentially be paid? ANSWER: January 1987 through November 1990; i.e., all non-substantial gainful activity months during the extended period of eligibility as well as the month of cessation and the following 2 months (grace period). The extended period of eligibility would terminate effective December 1990. ----------------------------------------------------------------------- Page 36 (SSDI) CONTINUATION OF MEDICARE COVERAGE WHAT IT DOES SSDI Beneficiaries can receive at least 39 months of hospital and medical insurance after the trial work period. This provision allows health insurance to continue when a person goes to work and is engaging in substantial gainful activity. HOW IT HELPS PEOPLE Although cash benefits may cease due to work, the beneficiary has the assurance of continued health insurance. EXAMPLES EXAMPLE 1 John Smith had been entitled to Medicare since May 1987, his 25th month of disability insurance entitlement. Although he continued to have a severe impairment, he completed a trial work period on September 30, 1988 (9th month in which he earned over $200 a month). If he continues working over the substantial gainful activity level ($500 a month) throughout the extended period of eligibility (the 36-month period after the trial work period ends), his entitlement will continue through September 30, 1991. His Medicare will continue through December 31, 1991 (39 months after the trial work period ends), unless he medically recovers prior to that time. 5/85 86 5/87 9/88 10/88 89 90 9/91 12/91 ---------------------------------------------------------------------- | | | | | | | | | | | | | | | | | | | | | Begin End | | Eligible | EPE EPE | | for Medicare| | Begin | End Free Receiving Complete Medicare Disability TWP Coverage; Benefits Can Elect To Purchase ----------------------------------------------------------------------- Page 37 (SSDI) EXAMPLE 2 Mary Jackson was entitled to disabled widows benefits beginning June 1986. She completed a trial work period February 1988. If she continues to engage in substantial gainful activity, her extended period of eligibility will end February 1991 (36 months after the trial work period ended). Although she had only served 21 months of her Medicare waiting period (24 months are requlred) by the time she completed her trial work period, her disabled widow's benefit entitlement will continue for 36 months during her extended period of eligibility. The months in the extended period of eligibility will continue to count toward her Medicare qualifying perlod. Thus, her Medicare coverage will begin June 1988, the fourth month of her extended period of eligibility. If her medical condition remains disabling, Mrs. Jackson's Medicare entitlement will end in May 1991, 3 months after her extended period of eligibility ends. As can be seen from the time line below, Mrs. Jackson received her Medicare benefits due to the extended period of eligibility work incentive. Mrs. Jackson continues to receive the support she needs in her work attempt. 6/86 2/88 3/88 5/88 6/88 2/91 5/91 ----------------------------------------------------------------------- | | | | | | | | | | | | | | | | | | | | | Entitled to Complete Begin EPE | | | | Disabled TWP | | End EPE | Widow's Receive Last | | Benefits Benefit Check| End free | Medicare; Become Can Elect to Eligible Purchase For Medicare ----------------------------------------------------------------------- Page 38 (SSDI) MEDICARE FOR PEOPLE WITH DISABILITIES WHO WORK WHAT IT DOES It allows certain people who have returned to work to purchase continued Medicare coverage after premium-free Medicare ends due to work. WHO CAN APPLY Anyone who: * is not yet 65; and * has a disabling impairment; and * whose Medicare stopped due to work. * Premium Hospital Insurance (HI Part A) can be purchased at the same monthly cost which uninsured eligible retired beneficiaries pay. * Premium Supplemental Medical Insurance (SMI Part B) can be purchased at the same monthly cost which uninsured eligible retired beneficiaries pay. * Hospital Insurance can be purchased separately without Supplemental Medical Insurance, but Supplemental Medical Insurance can only be purchased if Hospital Insurance is also purchased. THE ENROLLMENT PERIOD An individual may enroll: * during his or her initial enrollment period; * during the annual general enrollment period (January 1-March 1 of each year), or * during a special enrollment period if covered under an employer group health plan. WHEN THE STATE PAYS PREMIUMS States are required to pay Hospital Insurance premiums for qualified working individuals with disabilities. Qualified individuals are those who: * are eligible to enroll in premium Hospital Insurance for people with disabilities who work; * meet certain income and resource standards; and * are ineligible for Medicare on any other basis. ----------------------------------------------------------------------- Page 39 (Photo) Page 40 (Blank) ----------------------------------------------------------------------- Page 41 (SSI) SSI EARNED INCOME EXCLUSION WHAT IT DOES This provision allows most of a person's earned income, including pay received in a sheltered workshop or work activities center, to be excluded when figuring the SSI payment amount. The Social Security Administration excludes the first $65 of earnings in a month plus one-half of the remainder. This means that less than one-half of a person's earnings are counted when figuring his/her SSI payment amount. This exclusion is applied in addition to the $20 general income exclusion. The following examples show how the earned income exclusion is advantageous to the beneficiary. In Example 1, the person receives $161 SSDI each month; in Example 2, the person receives wages of $161 per month. Example 1 $161 (SSDI) -20 (General income exclusion) ----- $141 (Countable income) $407 (1991 Federal Benefit Rate) -141 (Countable income) ----- $266 (SSIpayment) Available Income $161 (SSDI) +266 (SSI) ----- $427 (Total income) Example 2 $161 (Earned income) -20 (General income exclusion) ----- $141 -65 ($65 earned income exclusion) ----- $ 76 (divided by) 2 (1/2 remaining earnings) ----- $ 38 (Countable income) $407 (1991 Federal Benefit Rate) -38 (Countable income) ----- $369 (SSI payment) Available Income $161 (Earned income) +369 (SSI) ----- $530 (Total income) ----------------------------------------------------------------------- Page 42 (SSI) SSI STUDENT EARNED INCOME EXCLUSION WHAT IT DOES It allows a person who is under age 22 and regularly attending school to exclude up to $400 of earned income per month. The maximum annual exclusion is $1,620. DEFINITION OF "REGULARLY ATTENDING SCHOOL" "Regularly attending school" means that the person takes one or more courses of study and attends classes: * in a college or university for at least 8 hours a week; or * in grades 7-12 for at least 12 hours a week; or * in a training course to prepare for employment for at least 12 hours a week (15 hours a week if the course involves shop practice); or * for less time than indicated above for reasons beyond the student's control, such as illness. A person who is homebound because of a disability may be "regularly attending school" by: * studying a course or courses given by a school (grades 7-12), college, university, or * having a home visitor or tutor who directs the study. HOW IT IS APPLIED The student earned income exclusion is applied before the general income exclusion or the earned income exclusion. ----------------------------------------------------------------------- Page 43 (SSI) SSI BLIND WORK EXPENSES Any earned income which a blind person uses to meet expenses needed to earn that income is not counted in determining SSI eligibility and the payment amount if the person is: * under age 65, or * age 65 or older and received SSI payments due to blindness (or received payments under a former State plan for aid to the blind) for the month before he or she attained age 65. NOTE: The expense does not need to be related to the person's blindness. EXAMPLES OF BLIND WORK EXPENSES Some examples of blind work expenses are: * 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 NOTE: the above list is not all-inclusive. ----------------------------------------------------------------------- Page 44 (SSI) HOW BLIND WORK EXPENSES ARE USED TO FIGURE SSI PAYMENTS Blind work expenses are used to reduce the amount of earnings which are counted when figuring the SSI payment amount. The following example shows how the blind work expense exclusion affects a person's SSI payments. This example uses the same circumstances as Example 2 on page 41 except that this person also has blind work expenses of $ 40 per month. $161 (Earned income) -20 (General income exclusion) ----- $141 -65 Earned income exclusion ----- $ 76 (divided by) 2 (1/2 of remaining earned income) ----- $ 38 -40 (Blind work expenses) ----- $ 0 (Countable income) $407 (1991 Federal benefit rate) -0 (Countable income) ----- $407 (SSI payment) Available income $161 Earned income +407 SSI ----- $568 Total income ----------------------------------------------------------------------- Page 45 (SSI) PLAN FOR ACHIEVING SELF-SUPPORT A plan for achieving self-support (known as PASS) allows a person with a disability to set aside income and/or resources for a specified period of time for a work goal. For example, a person could set aside money for an education, vocational training, or starting a business. The plan can help a person establish or maintain SSI eligibility and can also increase the person's SSI payment amount. A PASS does not affect a substantial gainful activity determination for initial eligibility decisions. Income and resources that are set aside are excluded only under the SSI income and resources tests. WHO CAN HAVE A PLAN Any person who is blind or disabled who receives SSI or could qualify for SSI can have a plan. It is important to keep in mind that as earnings go up, the person who does not need a plan now may need one next month to remain eligible or to increase the SSI payment amount. REQUIREMENTS * be designed especially for the person * be in writing * have a specific work goal which the person is capable of performing * have a specific timeframe for reaching the goal (no longer than 48 months) * show what money and other resources received will be used to reach the goal * show how the money and resources will be used * show how the money set aside will be kept identifiable from other funds * be approved by the Social Security Administration * be reviewed periodically to assure compliance ----------------------------------------------------------------------- Page 46 (SSI) WHO MAY HELP SET UP A PLAN Anyone may help the person with the plan, e.g., vocational counselors, social workers, or employers. The Social Security Administration evaluates the plan and determines its acceptability. The Social Security Administration also helps people put their plans in writing. HOW A PLAN IS USED TO FIGURE SSI ELIGIBILITY AND/OR PAYMENT AMOUNT Resources set aside under a plan are not counted towards the $2,000 resource limit. If income is set aside under a plan, it is excluded in the same way as blind work expenses, i.e., after all other applicable exclusions are applied (See the example on page 44.) ----------------------------------------------------------------------- Page 47 (SSI) SSI PROPERTY ESSENTIAL TO SELF-SUPPORT WHAT IT DOES This provision allows a person to exclude certain resources which are essential to the person's means of self-support. HOW IT WORKS Property which is used in a trade or business or used by a person for work as an employee is totally excluded as of May 1, 1990. For example, the value of tools or equipment which a person needs for work is totally excluded. For periods prior to May 1,1990, the total exclusion only applied to property which was required by an employer. Up to $6,000 of equity value of non-business property which is used to produce goods or services essential to daily activities is excluded (e.g., land used to produce vegetables or livestock solely for consumption by the person's own household). Also, up to $6,000 of equity value of non-business income-producing property is excluded provided that the property yields an annual rate of return of at least 6 percent. This $6,000/6 percent rule also applies to property used in a trade or business for periods prior to May 1, 1990. ----------------------------------------------------------------------- Page 48 SSI SECTION 1619 WORK INCENTIVES SPECIAL SSI PAYMENTS FOR PEOPLE WHO WORK (Section 1619(a)) WHAT IT DOES This incentive allows SSI beneficiaries to receive SSI cash payments even when earned income (gross wages and/or net earnings from self-employment) exceeds the substantial gainful activity level. NOTE: It does not apply to SSI beneficiaries who are blind because the substantial gainful activity requirement has never applied to them. REQUIREMENTS TO QUALIFY To qualify for this incentive, the person must: * be eligible for an SSI payment for at least one month before he/she begins working at the substantial gainful activity level; * still be disabled (i.e., have the same disability as when he/she applied for SSI); and * Meet all other eligibility rules, including income and resource tests. HOW IT APPLIES People who have earnings above the substantial gainful activity level can continue to receive SSI cash payments as long as they are still disabled and meet all other eligibility requirements. The person's payment amount will be calculated in the same way as for someone who is not working at the substantial gainful activity level. (See earned income exclusion example on page 41.) The person will remain eligible for Medicaid. CONTINUED MEDICAID ELIGIBILITY (SECTION 1619 (b)) WHAT IT DOES This incentive continues Medicaid coverage for most working SSI beneficiaries under age 65 when their earnings become too high to allow an SSI cash payment. NOTE: Effective May 1, 1991, a person age 65 or over who is blind or disabled may qualify for continued Medicaid coverage under section 1619 (b). ----------------------------------------------------------------------- Page 49 (SSI) REQUIREMENTS TO QUALIFY To qualify for this incentive, a person must: * have been eligible for an SSI cash payment for at least one month; * still meet the disability requirement; * still meet all other non-disability requirements; * need Medicaid in order to work; and * have gross earned income which is insufficient to replace SSI, Medicaid and any publicly funded attendant care. The Social Security Administration uses a threshold to measure whether a person's earnings are high enough to replace his/her SSI and Medicaid benefits. WHAT IS THE THRESHOLD? The threshold amount is based on: * the amount of earnings which would cause SSI cash payments to stop in the person's State, plus * the annual per capita Medicaid expenditure for the State. If the person's gross earnings are higher than the threshold amount for his/her State, SSA can figure an individual threshold if the person has: * impairment related work expenses (see pages 19-26); * blind work expenses (see pages 43-44); * a plan to achieve self-support (see pages 45-46); * publicly funded attendant or personal care; or * medical expenses above the State per capita amount. ----------------------------------------------------------------------- Page 50 (SSI) CONTINUED MEDICAID ELIGIBILITY IN CERTAIN STATES The following States use their own definitions of eligibility for Medicaid purposes which differ from SSI eligibility criteria: Connecticut Missouri Ohio Hawaii Nebraska Oklahoma Illinois New Hampshire Virginia Indiana North Carolina Minnesota North Dakota People in these States will continue to be eligible for Medicaid under the section 1619 (b) incentive as long as they were eligible for Medicaid in the month before they became eligible for section 1619. SPECIAL BENEFITS FOR SECTION 1619 RECIPIENTS WHO ENTER A MEDICAID FACILITY WHAT IT DOES This provision allows an individual who is eligible under section 1619 to receive an SSI cash benefit for up to 2 months while in a Medicaid facility or public medical or psychiatric facility. MEDICAID FACILITY Usually when an SSI recipient enters a Medicaid facility (i.e., a facility where Medicaid pays more than 50 percent of the cost of care), the SSI payment is limited to $30 per month minus any countable income. However, if the person is eligible under section 1619, the benefit will be figured using the full Federal Benefit Rate (see page 41) for up to 2 months. PUBLIC MEDICAL OR PSYCHIATRIC FACILITY Usually when an SSI recipient centers a public medical or psychiatric facility, he/she is not eligible to receive an SSI payment while in the facility. However, if the individual is eligible under section 1619, SSI cash benefits continue for up to 2 months. For this provision to apply, the facility must enter into an agreement with the Social Security Administration allowing the person to keep all of the SSI payment. ----------------------------------------------------------------------- Page 51 (SSI) REINSTATING ELIGIBILITY WITHOUT A NEW APPLICATION WHAT IT DOES This provision enables people to regain eligibility for SSI cash payments or continued Medicaid coverage after a period of ineligibility without filing a new application. CASH PAYMENTS A person who is eligible for continued Medicaid coverage under section 1619 (b) can begin receiving SSI cash payments at any time earnings drop below the break-even point. (See Glossary for a definition of break-even point.) MEDICAID COVERAGE A person who is ineligible for continued Medicaid coverage because earnings exceed the threshold can regain eligibility for Medicaid coverage if earnings drop below the threshold within 12 months. ----------------------------------------------------------------------- Page 52 GLOSSARY BLIND WORK EXPENSES (SSI) Provides that any earned income of a person who is blind which is used to meet expenses resonably attributable to earning the income is not counted in determining SSI eligibility and the payment amount. BREAK EVEN POINT (SSI) The dollar amount at which total income precludes SSI payment. As countable income increases, SSI payments decrease until the person is no longer eligible for any SSI payment. A person's break-even point varies with his/her earned/unearned income mix, applicable income exclusions, and State supplement eligibility, if any. CONTINUING DISABILITY REVIEW (SSDI and SSI) The process of obtaining complete corrent information about the person's condition and any work activity to determine if the Social Security Administration should continue disability payments. COUNTABLE INCOME (SSI) The amount of money remaining after certain exclusions are deducted from the total income--used in determining SSI eligibility and payment amounts. DEEMING (SSI) The The process of considering the income and resources of a parent or spouse to be the income and resources of the person who is applying for or receiving SSI benefits. EXTENDED PERIOD OF ELIGIBILITY (SSDI) Permits the renstatement of SSDI benefits, without a new application, disability determination, or waiting period, to those people whose cash benefits were previously ceased because of substantial gainful activity; if they discontinue substantial gainful activity within 36 months following the trial work period. They must still meet the disability requirements. ----------------------------------------------------------------------- Page 53 (GLOSSARY CONTINUED) IMPAIRMENT RELATED WORK EXPENSES (SSDI and SSI) Applies to all SSDI and those SSI beneficiaries who are not blind. Provides that the cost to the person with a disability of certain items and services needed to work, (e.g., attendant care services, medical devices, etc.) can be deducted from earnings in determining if the person is engaging in substantial gainful activity. The items and services may also be needed for normal daily activities. These same impairment-related work expenses can be deducted, under certain circumstances, from earned income to determine an SSI beneficiary's countable earned income. INCOME (SSI) SSI income is: earned income--money received from wages or self- employment earnings; unearned income--money received from other sources such as Social Security, Veteran's benefits pensions; in-kind income-- free food, clothing or shelter; deemed income--the protion of the income of a spouse or parent of sponsor of an alien which is used in computing the SSI payment amount. (In-kind and deemed income are types of unearned income.) MEDICAID (Medi-Cal in California) (SSI) Medical coverage provided to a person by the State title XIX program. MEDICAL IMPROVEMENT EXPECTED (SSI and SSDI) When a disability determination is made and it is determined that the disabling impairment may improve, the case is diaried for a future medical review (medical rexamination). MEDICARE Two-part insurance program for eligible disabled and retired people: * Hospital Insurance under Medicare (HI Part A); * Supplementary Medical Insurance under Medicare (SMI Part B). MEDICARE FOR PEOPLE WITH DISABILITIES WHO WORK (SSDI) Allows certain people with disabilities who have returned to work to purchase continued Medicare coverage after premium-free Medicare ends due to work activity. The amount of the monthly premium will be the same as the premium amount charged uninsured people for Medicare hospital insurance, and for medical insurance. States are required to pay hospital insurance premiums for qualified working individuals with disabilities. ----------------------------------------------------------------------- Page 54 (GLOSSARY CONTINUED) PLAN FOR ACHIEVING SELF SUPPORT (SSI) Applies only to the Supplemental Security Income program. Under a plan, a person is permitted to set aside income, and/or resources over a resonable period of time in order to obtain occupational training or education, purchase occupational equipment, establish a business, etc., thereby enabling the person to become financially self-supporting. The income and resources set aside under a plan are excluded from the SSI income and resources tests. PROPERTY ESSENTIAL TO SELF SUPPORT Applies only to Supplemental Security Income Program. This provision allows full or partial exclusion of certain property necessary for self-support. RESOURCES Resources can be anything a person owns, such as a bank account, stocks, real property, personal property. SUBSTANTIAL GAINFUL ACTIVITY (SSI and SSDI) Performance of signigicant duties over a resonable period of time in work for pay or profit (generally earnings averaging more than $500 per month for non-blind (both SSDI and SSI) and more than $810 per month for those who are blind (SSDI only) in 1991). SSDI Used to denote title II Social Security Disability Insurance. SSI Used to denote title XVI Suplemental Security Income TRIAL WORK PERIOD (SSDI) Begins with the month of entitlement; however, it cannot begin earlier than the month the application is filed. It ends after 9 months (not necessairly consecutive) of work over $200 per month (or, over $200 net earnings or over over 40 hours of work per month if self-employed) by an SSDI beneficiary. The trial work period gives a beneficiary the opportunity to test work ability. A determination of the ability to perform substantial gainful activity is not made until after the trial work period is completed. ----------------------------------------------------------------------- Page 55 ADDRESSES OF THE SOCIAL SECURITY ADMINISTRATION REGIONAL OFFICES BOSTON REGION I NEW YORK REGION II Regional Commissioner, SSA Regional Commissioner, SSA Attn: Disability Programs Branch Attn: Disability Programs Branch Room 1100 Room 40-102 John F. Kennedy Federal Building Federal Building Cambridge Street 26 Federal Plaza Boston, Massachusetts 02203 New York, New York 10278 PHILADELPHIA REGION III ATLANTA REGION IV Regional Commissioner, SSA Regional Commissioner, SSA Attn: Disability Programs Branch Attn: Disability Programs Branch P.O. Box 8788 101 Marietta Tower 3535 Market Street Suite 1902 Philadelphia, Pennsylvania 19104 Atlanta, Georgia 30323 CHICAGO REGION V DALLAS REGION VI Regional Commissioner, SSA Regional Commissioner, SSA Attn: Disability Programs Branch Attn: Disability Programs Branch 10th Floor Room 1440 105 Adams Street 1200 Main Tower Building Chicago, Illinois 60603 Dallas, Texas 75202 KANSAS CITY REGION VII DENVER REGION VIII Regional Commissioner, SSA Regional Commissioner, SSA Attn: Disability Programs Branch Attn: Disability Programs Branch Room 436, Federal Office Building Room 1194, Federal Office Building 601 East 12th Street 1961 Stout Street Kansas City, Missouri 64106 Denver, Colorado 80294 SAN FRANCISCO REGION IX SEATTLE REGION X Regional Commissioner, SSA Regional Commissioner, SSA Attn: Disability Programs Branch Attn: Disability Programs Branch 75 Hawthorne Street 2001 Sixth Avenue M/S RX-50 San Francisco, California 94105 Seattle, Washington 98121 U.S. Government Printing Office : 1991--299-407/50015 -----------------------------------------------------------------------