How Work Affects SSI and SSDI

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How Work Affects SSI and SSDI
Linda Landry Disability Law Center SSA Partners
Summit March 2008
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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?

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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

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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.

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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 month of receipt.

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SSI and Work Effect of Wages

• For SSI, gross monthly wages count when
  paid/received. 20 CFR 416.1111(a).
• To compute countable monthly wages, deduct 65
  plus ½ of the remainder from gross monthly wages.
  20 CFR 416.1112(c)(5) (7).
• SSI recipients may also deduct the 20 general
  income disregard from wages, if not used on
  unearned income. 20 CFR 416.1112(c)(4).
• A good estimate of countable wages is ½ of gross
  monthly wages.

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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?

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SSI and Work Effect of Wages Example 1

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

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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.

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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)

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SSI Benefits and WorkSelf Employment Income

• SSA starts with net self employment to calculate
  the amount of SSI the individual would otherwise
  be eligible to receive.
• 20 CFR 416.110(b), 416.1111(6).

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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

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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

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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.

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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

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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

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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

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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.

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Other IRWE Examples

• Medical supplies
• Service animal expenses
• Support animal expenses
• Job coach expenses

21
Rex Could be an IRWE
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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.

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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).

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SSI Benefits and WorkBWE Deductions

• Blind Work Expense (BWE) deductions are
  available to SSI recipients eligible on the basis
  of blindness.
• BWEs are in addition to other permitted earned
  income deductions.
• 20 CFR 416.1112(c)(8).

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SSI Benefits and WorkBWE Deductions

• Examples of BWEs (POMS SI 00820.555)
• service animal expenses
• transportation to and from work
• taxes
• attendant care services
• visual aids
• translation of materials into Braille
• lunches
• professional association dues.

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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).

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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.

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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.

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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.

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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.

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Plan to Achieve Self-Support (PASS)

• Set aside income and resources to use to achieve
  an occupational goal.
• Occupational goal must be feasible.
• PASS must be in writing and include budget (
  business plan if self-employment).
• If PASS is approved by SSA followed, income and
  resources in PASS dont count for SSI. 20 CFR
  416.1112(c)(9), 416.1210(f).

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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.

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Keeping MassHealth 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.

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SSI Benefits and Work1619b Medicaid

• 1619b Medicaid provides continued Medicaid for
  SSI recipients with earnings too high to be
  eligible for an SSI cash payment.
• These individuals can be deemed eligible for
  MassHealth - if they continue to meet all other
  SSI eligibility criteria, including the asset
  limit, AND if they meet the Medicaid Test.

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SSI Benefits and Work1619b Medicaid Test

• The individual must
• have been eligible for SSI for at least 1 prior
  month
• remain medically disabled
• need MassHealth in order to work and
• have insufficient income to replace Medicaid and
  SSI.

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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.

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SSI Benefits and Work1619b Medicaid

• The bad news is having to continue to meet the
  SSI asset test which can be hard while working.
  
• A state Medicaid buy-in program may be an
  alternative option.

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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

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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.

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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

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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.

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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.

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SSDI and Work
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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.

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Earning Credits to Become Insured for SSDI

• You earn 1 credit for every 1000 earned (in
  2007). 4000 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.

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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.

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How Does Work Affect SSDI ?
The rules for SSDI and work are completely
different than for SSI. Its like being on
another planet.
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SSDI Work Incentive Scheme
9 Month Trial Work Period
36 Month Extended Period Of Eligibility
The Cliff Benefit Termination if over SGA
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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?

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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

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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

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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?

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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?

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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

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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.

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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.

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EPE Example

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

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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.

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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.

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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.

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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).

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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

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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?

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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 income

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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.

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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).

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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).

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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.

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Extended MedicarePOMS DI 55001.B.2.

• Medicare continues during EPE even if not
  eligible for SSDI cash.
• If SSDI terminates after EPE due to SGA, Medicare
  continues for up to 93 months after the twp, if
  individuals remains medically eligible.
• Must pay Medicare Part B premiums quarterly if no
  SSDI to deduct from.

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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.

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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.

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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.

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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.