Title II Work Incentives. Raymond Cebula, Esq.

Transcription

1 Title II Work Incentives Raymond Cebula, Esq. GG

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3 Title II Work Incentives Section GG Impact of Income on Social Security Disability Insurance Submitted By: Raymond Cebula, Esq. Cornell University 1043

4 Section GG National Social Security Disability Law Conference Module 3 Chapter 2 Impact of Income on Social Security Disability Insurance Intent of Congress to Outcomes of Beneficiaries Support Work The legislative history pertaining to both the SSI and Title II programs shows that Congress expressed a desire to provide every opportunity and encouragement to the blind and individuals with disabilities to return to gainful employment. While SSA has frequently promoted SSI and Title II as stepping stones or springboards to employment and greater economic self-sufficiency, reports on employment outcomes for beneficiaries indicate that few individuals have actually opted to return to work once disability benefits are awarded at levels necessary to leave the disability rolls. In an effort to encourage employment for beneficiaries, the federal government and the SSA have responded during the past 35 years with legislative and regulatory changes in the SSI and Title II disability programs. These changes, or work incentives, are aimed at reducing the risks and cost associated with the loss of benefit support and medical services as a result of returning to work. There are a number of work incentive provisions that are available to a Title II beneficiary who goes to work. The following sections will describe the treatment of income for a Title II working beneficiary. The Chapters in this module will describe in detail specific work incentives that can be used to support beneficiary employment objectives. Trial Work Period - Phase One Title II beneficiaries are entitled to a Trial Work Period (TWP) to test the ability to work. A trial work month is one in which the beneficiary performs work for pay (service month) and earns above a level determined by the Social Security Administration. 1044

5 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI In 2017, that level is $840 of gross earnings per month. Self-employed individuals use a TWP month when their net earnings from self-employment exceed the current TWP level or they engage in the business activity for 80 hours or more in a month. SSA defines services as activity in employment or self-employment that is performed or normally performed for remuneration or gain. If the beneficiary is paid in the form of commissions and it is impossible to determine a monthly amount, SSA will divide the commissions earned over a period of months by the months of employment. For example, if a realtor works solely for commissions and sells two houses over a period of ten months, the total amount of the commissions received is divided by 10 to determine the commissions earned per month. Tip Trial Work Earnings Level As evidenced in the table below, the trial work level will likely increase each year based on the national average wage index. Recent changes to the Social Security Act will allow this number to increase or remain the same. It will not decrease. The following table, also found at POMS DI , gives the monthly trial work period earnings' levels for the previous year: Year Gross Wages Self-employment Activity Year Gross Wages Self-employment Activity 2017 $ hours or more 2016 $ hours or more 2015 $ hours or more 2014 $ hours or more 2013 $ hours or more 2012 $ hours or more 2011 $ hours or more 2010 $ hours or more 2009 $ hours or more 2008 $ hours or more 2007 $ hours or more 2006 $ hours or more 2005 $ hours or more 1045

6 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI Year Gross Wages Self-employment Activity 2004 $ hours or more 2003 $ hours or more 2002 $ hours or more 2001 $ hours or more 1990 though 2000 $ hours or more $ hours or more Procedure Counting TWP Months SSA uses only gross wages for the month to determine if a TWP month has been used; OTHER WORK INCENTIVES DO NOT APPLY.. The Bipartisan Budget Act (BBA) of 2015 changed the when earned rule to a when paid rule. Recent POMS, at DI , states that (t)he legislation changes the way earnings from services are counted in Post-Entitlement Cases. In any title II disability cases, other than initial determinations, earnings will be presumed to have been earned in the month in which such earnings were paid unless it can be reasonabl(y) established, based on evidence readily available at the time of such determination, the earnings were earned in a different month than when paid. While this new statute, regulations, and POMS will allow SSA to treat income in the Title II program as when paid in post-entitlement situations, the fact that the beneficiary is able to rebut the presumption by producing wage stubs indicating pay periods will provide real time, immediately accessible information to allow income to be treated in a when earned manner. The Practitioner should provide assistance in breaking down wages to determine the best manner of proceeding in each case. If the math indicates that a trial work month or an SGA month will occur unless the presumption is rebutted, this will help produce evidence to the contrary. If the math shows that income when paid will make no difference in a specific instance, there is no need to take action. It IS important to look at each case individually and prepare and teach our beneficiaries how to analyze future income in order to allow them to move toward self-management and independence. The TWP begins the first month a beneficiary is entitled to a cash payment, following the five-month waiting period. The TWP cannot begin any earlier than the date the person filed an application for benefits, or the protective filing date if the onset of disability is prior to the date the individual filed for disability benefits. The TWP ends when the individual has nine TWP months that fall within a rolling 60-month period of time. The nine TWP months NEED NOT be consecutive. When 1046

7 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI nine TWP months have been documented, SSA will determine if all nine months have occurred within a 60-month period. The following table illustrates this process: Completed Trial Work Period Chart The following chart is purposefully a historical look-back at an individual s work history. It is often the case that the practitioner must deal with historical work efforts in order to determine the current status of work incentive usage. JAN JAN FEB FEB MAR MAR APR APR MAY MAY JUN JUN JUL JUL AUG AUG SEPT SEPT OCT OCT NOV NOV DEC DEC TWP 220TWP TWP 600TWP 600TWP 600TWP TWP 600TW TWP 600TWP TWP 585TWP TWP 600TWP TWP 625TWP TWP 625TW TWP 645TWP 660TWP 660TWP 660TWP 660TWP SSA identifies SSA identifies nine nine service service months, months, labeled labeled as TWP as TWP months, months, spanning spanning from from September September through through December December Since Since that period that period is more is more than than months, months, any month any month prior prior to January to January no longer no longer counts. counts. In this In case, this case, the month the month of September of September That That leaves leaves a balance a balance of eight of eight TWP TWP months months from from January January through through December December From From that point that point onward, onward, SSA will SSA apply will apply the rolling the rolling 60-month 60-month provision. provision. The next The next two months, two months, January January and February and February 2007, 2007, are not are TWP not TWP months months because because the earnings the earnings are below are below the TWP the TWP level. level. Looking Looking back back 60 months 60 months from from March March 2007, 2007, which which is the is next the next time this time beneficiary this beneficiary had earnings had earnings above above the TWP the TWP level, level, only only seven seven months months qualify qualify as TWP as TWP months. months. Two Two more more expired expired TWP TWP months, months, January January and February and February of 2002, of 2002, drop drop off. off. It is not It is until not until SSA rolls SSA rolls forward forward to May to May that they that find they nine find nine months months used used in in a 60-month a 60-month period, period, from from June June through through May May Therefore, Therefore, SSA will SSA deter- will determine mine that the that individual s the individual s TWP TWP ended ended May May The TWP The TWP should should be carefully be carefully tracked tracked using using a worksheet a worksheet similar similar to the to one the provided one provided in Exhibit in Exhibit 3.2a. 3.2a. It is extremely It is extremely important important that the that beneficiary the beneficiary knows knows when when the end the end of the of TWP the TWP is near is near because because a number a number of other of other work work incentives incentives can be can applied be applied to to earnings earnings once once it is complete. it is complete. Exhibit Exhibit 3.2b also 3.2b includes also includes an example an example of a completed of a completed chart. chart. 1047

8 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI Earnings from self-employment are treated differently. The TWP will begin when the self-employed individual; 1) has net earnings that are above the TWP level, or, 2) engages in the business activity more than 80 hours per month (40 hours per month prior to 2001). Be sure to have all work months (regardless of earnings level) at hand before beginning to chart a TWP. Without ALL work information from the date of disability onset, dramatic errors can occur. Track and mark ALL months before determining when the TWP begins and ends. The practitioner should advise the beneficiary to keep a record of monthly earnings or self-employment activity, and track the TWP. It is also important that the beneficiary report earnings to SSA by submitting pay stubs to the local Field Office, or by calling the toll-free number to report wages. Beneficiaries should get a receipt as proof that earnings were reported. SSA will input the earnings information into their system using ework, a computerized process by which they keep a database of beneficiary earnings. ework produces a receipt every time earnings are reported and provides an automated decision-making process. Tip TWP and Sheltered Workshops Earnings for work performed in a sheltered workshop under a training program constitutes "services" for TWP purposes if the earnings are above the TWP level. However, the practitioner should determine if the "training or therapy" exception might apply to this type of work. See DI Participants in a federally-sponsored volunteer program under the Domestic Volunteer Service Act may receive a stipend or allowance. This stipend, or the services performed by the volunteer, should not be included when determining if TWP months have been used. See DI & DI for a list of the programs that apply this provision and how it should be applied to each. Benefits are paid during the TWP, regardless of the level of earnings, unless there is medical recovery. The practitioner should advise the beneficiary to use the TWP as an opportunity to test stamina, to gradually increase work activity from part-time to fulltime, or to test interest in a particular job or career. 1048

9 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI Tip Dual Entitlement and Work Some beneficiaries may receive benefits from more than one work record. For example, a beneficiary may qualify for Title II benefits based on his own work, and subsequently receive Childhood Disability Benefits (CDB) when his parent retires. This individual is entitled to a separate TWP for each benefit. Therefore, a beneficiary could be in separate work incentive status if the dates of entitlement are different for each.. Substantial Gainful Activity Decision When an individual has nine TWP months that fall within a 60-month period of time, the TWP is complete. At this point, SSA will conduct a review of the beneficiary s work activity, called a Continuing Disability Review (work CDR). Unlike a medical CDR, the purpose of the work CDR is to determine if the individual is engaging in substantial gainful activity (SGA). SGA is one of the tests of continuing disability for Title II beneficiaries (the other being medical CDRs). The concept of earnings now changes to "countable earnings" rather than "gross earnings". Countable Income SSA may not count all of the beneficiary s monthly earnings when they are doing the SGA determination. They must consider only those earnings that represent the individual s own productivity. Sick and vacation pay is not counted because it is not pay derived from actual work activity. Bonus and incentive payments are typically counted, unless the individual can provide evidence that the payments are not related to his or her own productivity. In addition, since SSA receives documentation only of taxable income, if an individual is participating in a cafeteria plan, those earnings set aside pre-tax will be added to the IRS reported earnings. SSA will look for an equal exchange of labor for money to determine countable income. If the person s gross earnings suggest SGA, SSA will take into account other factors. These may include averaging earnings, Subsidy/Special Conditions, and Impairment Related Work Expenses (IRWEs). These work incentives are explained in the chapters that follow. Countable income is the net income remaining after any income exclusions and/or work incentives have been applied. The work incentives will be applied only if the result is countable income below the SGA level. If an individual is paid for work that was done in the past, as in the case of writers, artists, and real estate brokers, SSA will count the income when it was earned. For example, if a beneficiary spends six months in 2014 creating a painting that he sells in 1049

10 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI 2015 the income from the sale is averaged over six months and counted in Again, be aware of the BBB Act of 2015 changed the when earned nature of Title II and the implications for your individual beneficiaries. The SGA level for individuals whose disability is not due to blindness is different for those whose disability is blindness (per SSA s definition see POMS DI ). In 2017, the SGA level for non-blind beneficiaries is $ in countable earnings each month, while the blind SGA level is $1,950. SGA levels have changed over the past several years. Exhibit 3.2c provide the SGA levels for past years as does the chart found earlier in this chapter. It is important when counseling a beneficiary to apply the appropriate SGA level to each year of the beneficiary s work history. A decision of SGA implies that the individual is performing significant mental or physical duties, usually performed for pay or for profit, and is demonstrating the ability to work in spite of the disabling impairment. The work CDR is conducted by the Claims Representative (CR) and is based on monthly countable income. Countable income is the person s monthly gross income, offset by work incentives, exclusions and deductions. Countable income will be explained further in this section. To conduct the work CDR, the CR will contact the beneficiary. In some cases, the review will be handled by mail or telephone, but in most cases the beneficiary will be asked to meet with the CR in their local SSA office. Information from the individual and their employer(s) will be collected. The beneficiary is asked to complete a form called the Work Activity Report (SSA-821-BK). The practitioner may be asked to help the beneficiary fill out the form. In some cases, the CR will complete the form during a telephone or face-to-face interview with the beneficiary. An example of the SSA-821- BK can be found in POMS DI To gather information from the beneficiary s employer(s), SSA will mail the Employee Work Activity Questionnaire (SSA-3033-BK). The questions are designed to determine the existence of subsidy and/or unsuccessful work attempt. It may be necessary for the beneficiary, or their practitioner, to have a discussion with the employer regarding this form. Some employers are hesitant to give information about their employee that may be construed as negative, but need to understand that the nature and importance of these work incentives. An example of form SSA-3033-BK can be found in POMS DI

11 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI Procedure Net Earnings from Self Employment (NESE) Because income from self-employment is reported differently, a self-employed person will be asked to complete a Work Activity Report designed specifically for self-employment activity. This form is the SSA-820-F4 and can be found in POMS DI Files for Social Security beneficiaries are not kept in the local offices. They are maintained in the Office of Disability Operations (ODO) in Baltimore, Maryland. When the nine-month TWP concludes, the ODO will forward the file to the local SSA office. This may take some time, and will be delayed even more if the beneficiary has not been consistently reporting wages, as SSA will not be aware that the TWP has ended. A delayed CDR could result in an overpayment of benefits. The role of the practitioner is to encourage the beneficiary to report wages and to contact the local office when they finish the TWP and ask that the work review be initiated. A good touchpoint (time to meet/contact your beneficiary) is in month seven of the TWP to begin to prepare for the review and the next phase of work incentives. Tip Medical CDR Returning to work may suggest that medical improvement has occurred. Unless the individual is protected from a medical CDR by participating in the Ticket to Work program, the Claims Representative may refer the case for a medical CDR. The impact of the Ticket to Work will be discussed later. If SSA finds that the beneficiary is engaging in SGA, their eligibility for cash benefits is ceased. However, benefits are paid during a three-month grace period that includes the cessation month the first month after completion of the trial work period that countable earnings are above SGA level and the following two months. After the grace period, if countable earnings continue to be above the SGA level, the beneficiary will continue to see benefits payments suspended. Benefits can only be suspended during a three-year period that follows the TWP, called the Extended Period of Eligibility (). Terminations of eligibility due to earned income are NOT ALLOWED during the, however a medical CDR that produces a finding of medical improvement during the can result in termination. Carefully examine any termination notice received during the to determine the reason for the termination. 1051

12 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI Policy-to-Practice Cessation versus Termination Remember, "cessation" is not the same as "termination." If SSA "ceases" the beneficiary's eligibility during the 36-month, benefits are "suspended" if countable earnings are above the SGA level. If cessation occurs after the is exhausted, benefits are terminated following the cessation month and a two-month grace period. The SGA level increases each year. The practitioner should watch for a SSA press release in October or November of each year to learn the new amount. Constantly monitoring is an excellent way to keep on top of changes. Extended Period of Eligibility - Phase Two The month immediately following the ninth TWP month is the beginning of a consecutive 36-month, Extended Period of Eligibility (). This period begins and continues to accrue whether or not the beneficiary is engaging in any work activity or SGA level work activity. The table below illustrates this. Note that in 2009 the beneficiary did stop working and therefore had no earnings, yet the continued. JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC TWP1 TWP2 TWP3 TWP4 TWP5 TWP TWP TWP TWP If the beneficiary has countable earnings above the SGA level once the 36 months have passed, their Social Security Disability status will be terminated

13 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI Policy-to-Practice Payments During During the, the beneficiary whose benefits are ceased due to SGA level earnings is eligible for automatic reinstatement of those benefits if countable earnings fall below the current SGA level. The beneficiary needs to contact the Claims Representative to report earnings, and the cash benefits will be reinstated until earnings again rise above the current SGA level. Income Averaging When conducting the work CDR to determine if there has been a benefit cessation month, the Claims Representative may average a beneficiary s monthly income when earnings or work activity varies from month to month above and below the SGA level. Earnings are to be averaged over the entire period of work requiring evaluation when: the person's pattern of work was (or is) continuous; and there is no significant change in work patterns or earnings; and there was no change in SGA earning levels during the period involved. If earnings are typically below the SGA level, but one or two months are above SGA, SSA may use income averaging to find that the beneficiary s earnings are not SGA. For example, some months have twenty workdays, while others have twenty-two. The earnings are calculated by multiplying the hourly wage by the number of hours worked per day, times the number of days worked in the month. If there are twentytwo workdays, the extra days may result in earnings above the SGA level. If average earnings are below SGA, the disability status will not be ceased and benefits will continue. It is also important to note that even though the average earnings do not indicate the performance of SGA, SSA may decide that the person has the ability to engage in SGA if other factors suggest that is the case. SSA will only average earnings that are fairly consistent over a period of time. POMS DI provides some examples of income averaging, and shows that fluctuations of $50.00 to $ per month in earnings with no significant change in work activity would qualify for averaging. Large fluctuations in earnings or significant changes in work activity, such as a job promotion or difference of several hundred dollars in earnings, would require separate periods of averaging. Remember that each income is only averaged for periods in which the SGA level is the same. Therefore, usually, income will not be averaged over more than a calendar year. If more than one job is involved, but there are similar earnings in similar jobs, earnings may be averaged over the entire period. It is only if the type of work activity has 1053

14 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI changed significantly that different jobs would require different periods of averaging. Averaging cannot be used after a firm cessation month has been determined. See POMS DI for more on averaging of earnings. Tip SGA Consistency is Key Remember, a finding of SGA generally means that the beneficiary has a "consistent pattern of earnings" over SGA. Check with the local SSA office if you believe that income averaging would apply. Unsuccessful Work Attempt The Social Security Administration defines an Unsuccessful Work Attempt (UWA) as an effort to do substantial work in employment or self-employment that discontinues or reduces to the non-substantial Gainful Activity (SGA) level after a short time (no more than 6 months). A recent change in law and regulation eliminated the distinction between 1 3 month UWAs and 4 6 month UWAs. All of the special requirements for 4 6 month UWAs have been removed and every UWA claim for a work period from 1 6 months will be treated the same. POMS have yet to be developed by SSA, however new regulations have been released at 20 CFR SSA will ask the beneficiary to complete form SSA-821 (or the SSA-820 if the person was self-employed) to gather information about the work attempt, which asks if work stopped or was reduced because of the person s medical condition and asks for an explanation of the circumstances. Law & Policy Unsuccessful Work Attempt There is no limit to the number of times UWA may be applied, as long as there has not been a cessation and the criteria are met. The beneficiary must be out of work or have earnings reduced to below the SGA level for at least thirty days (period of separation), or be forced to change to a different type of work or employer (change in work environment) and, finally, these events must be caused by the disability. SSA will not count earnings during an unsuccessful work attempt when they make an 1054

15 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI SGA decision. This is true for the initial eligibility determination as well as the ongoing eligibility for Title II. In essence, UWA creates a situation that acts as though the earnings during this period of UWA never occurred. As a result, if a CR finds that a beneficiary is engaging in SGA but later learns that there is evidence that UWA applies, they may reopen that cessation decision and reverse it. The practitioner could play an important role in gathering the supporting documentation, notifying SSA that the work attempt qualifies as unsuccessful, and helping the beneficiary understand the outcome of the decision. Summary of Substantial Gainful Activity The determination of countable earnings is a complicated process and SSA has to consider many factors. Evaluation of self-employment is conducted differently and involves some work incentives that are unique, such as un-incurred business expense and unpaid help. The practitioner should seek assistance from a technical expert if a case involves a self-employment goal. Procedure Report, Report, Report In order to avoid overpayment or underpayments of Title II benefits, individuals must consistently and accurately report their monthly earnings to SSA, especially if their earnings fluctuated between SGA and non-sga levels from month to month. Moving from Policy to Practice Income Averaging and Unsuccessful Work Attempt are used to determine if the benefits should continue after the Trial Work Period. The Claims Representative at SSA will generally apply these work incentives if they are appropriate, but it may be necessary for the practitioner to advocate on behalf of the individual or educate the individual so that he or she can be an effective self-advocate. An example of Income Averaging involves Mary, a disabled Title II beneficiary who is paid on an hourly basis, earning $8.35 an hour and working 6 hours a day. For purposes of this exercise we will assume that Mary has no other work incentive and, as a result, gross wages equal countable wages for SGA purposes. Her TWP ended December In a month with 20 workdays her gross earnings are $1002, but most months have more than 20 work days. For example, January, March and April have 22 workdays, so in those months Mary earned $ , which is above the SGA limit for

16 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI February has 20 workdays ($1002 gross wages) and May has 21 workdays ($ gross wages). If SSA applies income averaging January through May, 2015, Mary s average wage is $ , which is below the SGA limit of $1090 for the calendar year Mary would not have a cessation during these months as averaging results in earnings below the SGA level. To illustrate a UWA: In June, July and August, Mary increased her hours to 8 each day at the request of her employer. Her gross income was $1, in June (22 workdays), $1, in July (23 workdays), and $1, in August (21 workdays). SSA will not average the earnings for these months as Mary is clearly earning above the SGA limit. SSA could determine that Mary is performing Substantial Gainful Activity and cease her benefits (making payment for her cessation month and two month grace period), but in September Mary tells her boss that the increased amount of work has exacerbated her disability and she has to cut back to 4 hours a day at the advice of her physician. Since Mary was only able to sustain SGA level earnings for three months, SSA will consider this an Unsuccessful Work Attempt and erase the September cessation of her benefits. Note the impact of the use of UWA despite wages at the SGA level. While Income Averaging was prevented as the change in wages exceeded the acceptable tolerance, UWA remained a viable option. Plotting and determining when the cessation and grace period will apply in any give Analysis Strategies Regardless of the type of benefit, careful monitoring and tracking of the Title II work incentives is imperative. Difficult concepts such as the rolling 60-month Trial Work Period provision may confuse the beneficiary. The practitioner should give only the information necessary for the individual to make an informed decision and take the appropriate steps. Beneficiaries will be at different stages in their employment planning. The practitioner may need to revisit some of the work incentives as the individual progresses toward employment. By charting the TWP and the, the practitioner will be more likely to note the possibility that Income Averaging is applicable, or that the beneficiary s earnings indicate one or more Unsuccessful Work Attempts. In order to create a chart, the practitioner must have accurate data on the person s earnings over a number of years. Many people do not keep pay stubs, so it may be necessary to help the individual contact past employers to request earnings records. The pay stubs should be analyzed to determine the actual hours worked in the month (if the individual was paid hourly) disregarding sick or vacation leave, as SSA counts the hours that the person was actually performing work and services for an employer. 1056

17 Title II Work Incentives Section GG MODULE 3 CHAPTER 2 Impact of Income on SSDI As is evidenced by Mary s situation described above, it is important not to analyze a person s work too quickly and jump to conclusions about the status of their benefits. Both SSA and the practitioner should let a sufficient amount of time pass to allow for the possibility of an Unsuccessful Work Attempt. If Income Averaging and Unsuccessful Work Attempt do not apply, and the person s countable earnings are consistently at or above the substantial gainful activity level, monthly benefits will be ceased, suspended and eventually terminated. The practitioner must be clear on the difference between these three terms: 1. Ceased Benefits not paid due to SGA level earnings, yet beneficiary remains in eligibility status. 2. Suspended After cessation non-payment is considered a suspension of payments. The individual continues to be in eligibility status but receiving no cash. 3. Terminated A terminate will break the relationship between SSA and the beneficiary. Once again, plotting and determining when the cessation and grace period will apply in any given case is a difficult but very necessary skill that the practitioner MUST master. Action Planning If the individual reports past work with earnings above the applicable TWP level but the BPQY does not indicate that Trial Work months have been used, the practitioner should get earnings data from the beneficiary and chart the TWP and using the sample chart available in Exhibit 3.2a. Review this chart with the beneficiary. If earnings records were obtained from past employers, this information can be shared with SSA, which will expedite the work CDR. The practitioner can assist the beneficiary with the paperwork required by SSA to conduct the work CDR, ensuring that the information is provided and the status of the person s TWP and is known. If done in a timely manner, the beneficiary will not receive benefits he is not entitled to because SSA will suspend the benefit checks for the appropriate months. The beneficiary must be strongly encouraged to report work/earnings at the appropriate times, so that SSA is aware of the need to initiate a work CDR. For beneficiaries who have not yet performed work after becoming entitled to SSDI, the practitioner could develop a TWP/ chart using a projected start date and earnings if known. The beneficiary should be encouraged to return to the practitioner for an updated chart when actual work begins or projections of earnings in particular months to see actual earnings, higher or lower than those projected amounts. 1057

18 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 2 Impact of Income on SSDI If the beneficiary is educated about the work incentives and knows when to anticipate contact from the SSA, as well as changes in benefit status, he or she will be more likely to continue to work successfully. 1058

19 Title II Work Incentives Section GG Module 3 Chapter 3 Subsidy and Special Conditions Overview To determine SGA, SSA can only use earnings that represent the real value of the work performed. Individuals who require extra support from their employer, or someone other than the employer, may receive pay that is more than the actual value of their work. SSA may consider this support a form of subsidy or allow it as a special condition. The determination as to whether the support is considered a subsidy, or a special condition, is critical as the valuation of each support differs significantly. The following is a list of circumstances in which SSA will suspect a subsidy: 1. The beneficiary is in sheltered employment provided for individuals with disabilities in a protected environment; 2. The beneficiary has a mental impairment, or a disability that started in childhood; 3. There appears to be a discrepancy between the amount of pay the person receives and the value of the services he/she provides for the employer; 4. Individuals close to the situation state that the beneficiary does not fully earn his/ her pay (e.g., he/she receives unusual help from others in doing the work); 5. The beneficiary's impairment is of a nature and severity that suggests he/she would require help from others to do the work; 6. The beneficiary is involved in a government-sponsored job training and employment program, such as those provided by state and local agencies; 7. The person is in the military service. 1059

20 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 3 Subsidy and Special Conditions Tip Subsidy Red Flags While these circumstances may not all give rise to subsidies or special conditions, the practitioner should always explore the potential for subsidies and special conditions. It is not good practice to rely upon SSA workers to "discover" these work incentives. Subsidy A subsidy is support provided by the employer and represents a direct cost to the employer. Some examples of employer subsidies include extra supervision, lower productivity compared to unimpaired workers performing the same or similar work, allowing extra breaks or a flexible schedule, or removing some job tasks that are impossible for the employee to perform given their impairment. Employer subsidies are either specific or non-specific. In specific subsidies, employers designate a specific dollar amount after calculating the reasonable value of the worker's services. In non-specific subsidies, employers are unable to designate a specific dollar amount, so SSA determines the value of the subsidy by comparing the work of the individual in terms of time, skills, and responsibilities with that of non-disabled employees doing similar work and estimating according to the prevailing pay scale of the work. An example of a specific subsidy is an employee whose productivity is 80% compared to a non-disabled employee performing the same work, but they are paid the same hourly wage. The value of the subsidy is equal to 20% of that hourly wage, multiplied by the number of hours the employees work in the month. The dollar amount of the subsidy is deducted from the gross wages for the month, and the result is the person's countable earnings. Tip Employer Documentation of Subsidy When the employer documents a subsidy and places a dollar value on the subsidy, SSA will generally accept the valuation and apply it to the beneficiary's claim. A non-specific subsidy requires that SSA determine the dollar value of the subsidy. To gather the information necessary to determine if a subsidy exists, SSA asks the employer to complete the SSA-3033-BK form, referenced earlier in this section. The questions on the form are designed to determine the existence of a subsidy. For example, the form asks: Does the employee complete all the usual duties required for his/her position? Is the employee able to complete all of the job duties without special assistance? On average, does the employee complete his/her work in the same amount of time as employees in similar positions? The answers to these questions will allow SSA to determine the value of the subsidy. 1060

21 Title II Work Incentives Section GG MODULE 3 CHAPTER 3 Subsidy and Special Conditions Tip Talk to Employer It is best practice for the beneficiary or the practitioner to have a discussion with the employer regarding the SSA-3033-BK Form. Some employers are hesitant to give information about their employee that may be considered negative, and it will help if they understand the nature and importance of these work incentives. It is always best for the employer to place a value on the subsidy and avoid non-specific subsidies that require actual value to be determined by SSA.. Military Service Members A person in a military service who is being treated at a military hospital or a therapy program for a severe impairment usually continues to receive full pay. Therefore, SSA will not likely evaluate any work activity based on the amount of pay received when making the SGA decision. Instead, they may compare the activity with similar work in the civilian workforce and determine its "reasonable worth." POMS DI (D). Policy-to-Practice Military Considerations For example, severely impaired service members may be placed on limited duty status and put to work in a hospital, office, mail room, laboratory, etc. The fact that a therapy program or limited duty status is involved suggests that subsidies may exist (see POMS DI ). SSA will consider the real value of the work effort within the military setting and then equate its value to similar work in a nonmilitary setting in order to make an SGA determination. Collecting as much information as possible to put before SSA will aid in arriving at the best value determination. 1061

22 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 3 Subsidy and Special Conditions Policy-to-Practice Calculating Subsidy If a beneficiary works 30 hours a week and earns $9.00 an hour, but has a job coach, who is paid by the employer, with him 10 hours every week, the value of the job coach subsidy ($25.00 per hour) is approximately $ (10 hours X $25.00/hour = $ X 4.33 weeks in the month = $1,083.25). This will result in countable earnings of $85.85, rather than the $ actually received by the working beneficiary. Special Conditions Special conditions are items or support provided by someone other than the employer or employee, such as the State VR Agency or employment support provider agency (e.g. Goodwill). On-the-job assistance provided by a job coach may be provided by the VR agency or long-term support agency. Because the job coach performs part or all of the person's job duties, or provides close supervision necessary for the person to consistently perform the job, the beneficiary is not actually earning all of the wages paid. SSA counts only the wages "earned" by the individual, so the value of the job coach "special condition" is deducted from the person's gross wages at the time the SGA determination is completed. However, SSA does not use the job coach's salary or hourly wage to calculate the value of the support. As a third party is paying for the support service (rather than the employer or employee), SSA will calculate the amount by multiplying the number of hours the job coach spends with the beneficiary multiplied by the beneficiary s hourly wage. 1062

23 Title II Work Incentives Section GG MODULE 3 CHAPTER 3 Subsidy and Special Conditions Policy-to-Practice Calculating Special Condition For example, if a beneficiary works 30 hours a week and earns $9.00 an hour, but has a job coach, paid for by Goodwill, with him 10 hours every week, the value of the job coach subsidy is approximately $ (10 hours X $9.00/hour = $90.00 X 4.33 weeks in the month = $389.70). Notice how this valuation significantly differs from the subsidy example above. The key to this difference is WHO is paying for the job coach. Tip Special Condition Notify SSA The beneficiary or practitioner should notify SSA that a special condition is in place before the SGA determination is complete. The more information the Claims Representative has prior to conducting the work CDR, the more accurate the decision. The practitioner will want to work with the employer, the beneficiary and the organization providing the job coach support to document the information and pass it on to the local SSA office. Case Study Calculating Effect of Specific Subsidy Bill has finished his TWP and is being reviewed for SGA. He works 35 hours per week and receives 15 hours a month of supported employment services/ support provided by his State Vocational Rehabilitation Agency. He earns $7.80 per hour ($1, per month) in his current job. Calculate the special condition value of this support. What is the effect, if any, on the SGA determination? STEP ONE Hours of job coach intervention (on-site) per month or number of hours of additional supervision given Multiply by hourly wage of x $ worker = $ Equals monthly subsidy STEP TWO $ Monthly Gross Earnings --- $ Minus Monthly Subsidy = $ Equals Monthly Gross Wages Counted Toward SGA 1063

24 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 3 Subsidy and Special Conditions Determining Subsidy / Special Condition To aid SSA in making subsidy and special condition determinations, provide the following information. How are the total earnings computed? What is the typical hourly rate for this position? Is the pay reduced proportionately when the individual is absent from work? Does individual receive any unusual assistance or supervision? If yes, describe. Who is paying for the service provided to support the work effort? If the pay is not set according to normal business practices, what consideration is given to the following: Number of years of position service with the employer; Previous earnings; Friendship or relationship to employer; Other factors unrelated to the performance of the worker; Does the employer consider the work to be worth substantially less than the amount paid? If so, what are the reasons for this view? If the individual is still on the payroll despite unsatisfactory work, what are the employer's reasons for retaining them? Or; If the individual is no longer employed, what led to the termination of employment? Moving from Policy to Practice Subsidy and Special Conditions are underutilized work incentives, perhaps because of the concept behind them. It is difficult for some employers to suggest that the real value of the work someone is doing is less than the wages earned. In addition, SSA may not be informed of the extra support provided by an employer, or that the worker is given more flexibility than other employees because the beneficiary is hesitant to mention it and the employer does not want to make negative statements about an employee. Other employers may simply take an altruistic view and may not think they are subsidizing an employee. 1064

25 Title II Work Incentives Section GG MODULE 3 CHAPTER 3 Subsidy and Special Conditions Analysis Strategies The practitioner should carefully explore the possibility of subsidy and special con- dition with the beneficiary. Reassure the individual that recognizing a subsidy or special condition does not necessarily reflect poorly on their status as an employee. The presence of a subsidy and/or special condition may be temporary, allowing the individual time to become proficient at the job and therefore require less support. Ex- plain that many non-disabled workers are unable to perform ALL aspects of their job, and employers have learned to be flexible in order to accommodate them. If the employer and the beneficiary are educated about subsidy and special condition, they will be better equipped to provide the SSA with the information they need to make a determination in favor of the beneficiary. Action Planning This is one area in which the practitioner may need to have contact with the employ- er, with permission from the beneficiary. An employer subsidy may not be obvious and the practitioner will need to conduct an interview with the individual's immedi- ate supervisor. If someone other than the employer provides a special condition, that information should be documented and submitted to the SSA. Exhibit 3.3 provides a sample of a Subsidy/Special Conditions checklist that may be of assistance when exploring the possibilities of subsidy or special conditions. Finally, the practitioner should work with SSA when a subsidy and/or special condi- tion exists in order to assist in determining the maximum usable value of that subsi- dy/special condition. By providing information explaining the need and use of subsi- dies, etc., SSA will have a better understanding and this may help boost the value that can be used to reduce gross income to countable income. 1065

26 Section GG National Social Security Disability Law Conference Module 3 Chapter 4 Impairment-Related Work Expense Overview Another work incentive that helps reduce gross earnings to countable income is Impairment Related Work Expense (IRWE). An IRWE is an expense for an item or service that enables the individual to work, is necessary because of a physical or mental impairment, and is paid for out of pocket by the beneficiary. The cost of an IRWE is deducted from gross earnings, thereby reducing the countable income when determining SGA. An IRWE must be approved by the Claims Representative, and they are allowable only if the following criteria are met: Expenses must be directly related to the impairment(s) of record; Individuals, due to physical or mental impairment(s), must need the items or services in order to work; Costs must be paid by the individuals and not be reimbursable from other sources; Expenses must be paid in a month in which the individuals are working, (or were working if the IRWE is applied retroactively), however some exceptions to this rule apply; and Expenses must be reasonable (represent the typical cost for items or services in the person's community). 1066

27 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense Tip Impairment of Record In order to claim an IRWE, the impairment must be "of record". As a result, it may be necessary to report new or changed impairments to SSA by collecting relevant medical and treatment information to claim all possible IRWE The SSA list of allowable expenditures under IRWE is extensive and includes costs of adaptive equipment or specialized devices, attendant care, and special transportation costs, as well as the cost of job coach services. However, the list is not all-inclusive.. Tip Think Creatively Practitioners should keep an open mind when thinking about IRWEs, and should encourage beneficiaries to think creatively. Don't assume that an item or expense will not be approved as an IRWE. It is SSA s job to make this determination; not the practitioners. Law & Policy IRWE POMS IRWE POMS -- Detailed information on IRWEs can be found in POMS section DI The POMS provides a significant amount of guidance for the Claims Representative, and is a rich source of information for the practitioner. Two are of particular importance; POMS DI "Definitions," and POMS DI "Determining When IRWEs are Deductible and How They Are Distributed." Policy-to-Practice Determining an IRWE Ask these three questions when determining if an expense is an IRWE: Does the expense relate to an impairment? Does the expense allow the beneficiary to work? Does the beneficiary pay for the expense? If you answer "yes" to all three questions, prepare documentation to submit the expense to SSA. Documentation of costs, reasons for use and payment related to each IRWE is submitted to the Claims Representative. Generally, the amount of IRWE deducted is the total amount the person paid for the item or services, with the exception of attendant care services and vehicle operating expenses, which are explained below. IRWE payments may be any of the following: 1067

28 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 4 Impairment-Related Work Expense Recurring monthly expenses - including payments made on an installment plan and any interest or other normal charges related to the purchase; Recurring non-monthly expenses - payments made less often than monthly (e.g. quarterly). The amount may be deducted entirely in the month the payment is made or prorated over the months in the payment period. The beneficiary makes the decision; Non-recurring - a one-time expense may be prorated over a 12-month period of time if not deducted in the month the item or service was paid for in full. The expense does not have to be large for SSA to prorate; even a $300 expense prorated over a 12-month period can reduce the countable income below the SGA level if the person's earnings are just a few dollars above SGA. Down payments on an impairment-related item or service may be deducted entirely in one month, or allocated over a 12-consecutive month period, whichever the person chooses. In some cases, SSA may allow an IRWE payment for a durable item, which is an item that can be used repeatedly (medical devices, prosthesis, work-related equipment, vehicle modifications are a few examples), that the person paid for BEFORE work started, as long as the disability existed when the payment was made. The item must have been purchased within the twelve months prior to the start of work, was paid in cash or other forms of money rather than in-kind, and is necessary for the person to work. Deductions for the IRWE will begin when the work activity begins and when necessary to bring countable income below SGA. Sample Deductible and Non-Deductible Expenses Supported Employment Services Payments made by beneficiaries to purchase supported employment services necessary to obtain and/or maintain competitive employment may be allowable deductible expenses. Individuals with disabilities who are considering using the IRWE option may want to consider that the expenses incurred during the initial support phases of supported employment are usually higher than can be comfortably afforded within the monthly income amount individuals receive in earnings or benefit payments. Therefore, it may be advisable to use the IRWE option as a funding source for the follow-up phases. It may be more beneficial to use a subsidy, special condition or 1068

29 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense Plan to Achieve Self-Support in the initial support phases. For example, use other funding sources (i.e., VR services, MH/ID, DD services, etc.) with funds appropriated for the purpose of employment support services. Attendant Care Services Attendant services are defined as assistance that a person needs that meet the following definitions: The services are performed in the work setting; The services assist the person with traveling to and from work; Services provided in the person's home must relate to preparing for work or assistance immediately upon arriving home from work, e.g. bathing, dressing, cooking, eating, and administering medications. Generally, the services require no more than two hours in the morning or evening, unless it can be verified that additional hours are necessary. Services may benefit other members of beneficiary's family (i.e., cooking meals for the individual that are also eaten by other family members); and/or Paid services performed by family members are deductible only if it is established that the family members suffer economic loss by giving up another job or reducing hours at work in order to perform the attendant care services AND the family member is paid in cash (or other forms of money) and not in-kind (e.g. room and board). Services of this type performed on non-work days or involving non-work activities and services performed for other family members are not deductible as an IRWE. Transportation Costs Modified Vehicles: Individuals may pay out of pocket for structural or operational modifications to a vehicle, including the cost to purchase, install, maintain and repair items. These costs are generally allowable as long as they are directly related to the impairment. For example, a person who does not have the use of his legs may have hand controls installed in a car, or a lift installed in a van. Other examples of structural or operational modifications include lowering the floor or raising the roof of a van to accommodate a wheelchair, a wheelchair lifter, or a rack/carrier for a power scooter. In addition to the cost of modifying a vehicle, the costs of operating a modified vehicle, directly related to work, are also deductible as an IRWE. Travel to and from a place of employment is also deductible. In the past, SSA determined the 1069

30 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 4 Impairment-Related Work Expense cost of operating a vehicle by using the mileage rate associated with each class of vehicle (car, truck or van), using data compiled by the Federal Highway Administration (FHA). However, since the FHA has not published this data since 1992, SSA has phased out the use of vehicle class mileage rates and replaced them with the standard mileage rate permitted by IRS for non-governmental business use. A rate chart can be found later in this chapter. The deductible amount is calculated by multiplying the daily mileage to and from work by the appropriate mileage rate to determine the daily mileage cost, which is then multiplied by number of days worked per month to get the monthly amount. Unmodified Vehicles: If an individual is able to use available public transportation, the expense is not deductible as an IRWE. However, if the impairment prevents the person from taking public transportation, the cost to operate an unmodified vehicle that is driven to and from work can be deducted at a per mile rate. Policy-to-Practice Transportation IRWE A person with cerebral palsy and fibromyalgia who is unable to walk to and from a bus stop, but can drive a car without any modifications may be allowed an IRWE in the following circumstances: When the person cannot use public transportation because of a physical or mental limitation resulting from the impairment(s), or if public transportation is not available and the person cannot drive him or herself in an unmodified vehicle, SSA will allow the cost of a trip to and from work by taxicab or the cost of paying another person to drive the person to and from work. If the person with a disability is driven to and from work in his or her own vehicle, the vehicle operating costs (at a per mile rate) are deductible in addition to any reasonable amount paid to the driver. If the driver is a family member, the individual must provide evidence of payment to the family member and documentation that the family member suffers economic loss, the same requirement as when a family member is paid for attendant services. SSA Approved Mileage Allowances POMS DI

31 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense Use the IRS standard mileage rate in determining the mileage expense for IRWE purposes. Be sure to use the mileage rate in effect for the time period that the vehicle was actually used for travel. IRS Standard Mileage Rate Year Cents Per Mile st half, nd half /01/05 to 12/31/05 (temporary increase) Medical Equipment / Devices Medical devices are used repeatedly and primarily serve a medical purpose. Examples include: wheelchairs; dialysis equipment; pacemakers; respirators; Nebulizers; suction equipment; braces. 1071

32 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 4 Impairment-Related Work Expense Medical devices also include prostheses, which are devices that replace internal body organs or external body parts such as artificial replacements of arms, legs, etc., and are considered to be restorative rather than cosmetic. Work-Related Equipment & Assistants Also deductible are impairment-related equipment that a person needs to perform his or her job or to travel from home to work. The following is a partial list of such items: Typing aids (i.e., one-handed typewriters); Training in the use of work-related equipment; Special work tools; Telecommunication devices; Interpreter services for individuals with hearing impairments; Visual aids for individuals with visual impairments (i.e., Braille devices, reader services, electronic enhancers); and/or Job coaching fees. Residential Modifications This category requires careful review, as the expense may not appear to be allowable as an IRWE but in fact can be regarded as part of the total process of getting to and from work. For example, exterior modifications to a home may be allowable as an IRWE expense if the work permits access to transportation or to the street, e.g. ramps, railings, etc. Policy-to-Practice Residential Modifications Due to quadriplegia, Dan uses the city paratransit system to get to work. However, he was unable to open his front door independently to get outside, and the paratransit driver was not allowed to leave the van to come to the door. Since Dan did not leave for work until an hour after his attendant finished work, he paid for an electronic door opener to be installed on his front door. Obviously, if an individual is employed in the home, modifications made to create working space within the home (i.e., widening the doorway into office, or installing a wheelchair lift) are deductible as an IRWE unless the individual deducts the cost as a business expense. 1072

33 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense Modifications can be costly. If payment is made at one time, SSA can prorate the cost over a period of up to twelve months. This will give the beneficiary IRWE deductions over a number of months, versus a one-time deduction. Routine Drugs / Medical Services Costs of visits to doctor's offices for obtaining regularly prescribed medical treatment/ therapy are deductible because they control the disabling condition. In addition, costs of regularly prescribed medical treatment/therapy, which is necessary to control the disabling condition, are also deductible even though they are necessary whether or not the person works. (i.e., anticonvulsant drugs, blood level monitoring, antidepressant drugs, and chemotherapy). Remember that over the counter items may be counted as IRWEs!! Tip Not Reimbursable Remember, if the drug or medical service is paid for by Medicaid, Medicare, insurance or even a family member, the cost cannot be deducted as an IRWE, however, any out of pocket co-pays can be deducted. Payments for diagnostic procedures such as brain scans or other tests are deductible only if the objective of the procedures is related to the control of the disabling condition to enable the person to work, and the person pays, or makes a co-pay, for such procedures. Non-medical Appliances and Devices Appliances or devices prescribed by physicians as essential for controlling the disabling conditions at home or work (i.e., electronic air cleaner for individuals with severe respiratory conditions) are allowable as an IRWE. Payment for medical supplies and services are deductible if the supplies and services are related to the control of the disabling condition to enable the person with a disability to work and the person pays for them. Included are physical therapy and medical supplies of an expendable nature, such as incontinence pads, catheters, bandages, elastic stockings, face masks, irrigating kits, and disposable sheets and bags. Service/Companion Animals Expenses related to owning and caring for a guide, service or companion animal are deductible as an IRWE if the animal enables the person to overcome functional limitations in order to work. Deductible expenses include the costs of purchasing the animal, training, food, licenses, and veterinary items and services, and transportation to a training class or to the veterinary clinic. 1073

34 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 4 Impairment-Related Work Expense Services Received in or Through a Community-Based Residential Program Residential services such as group home foster care or supported apartment provided to someone with a physical, mental or emotional disability may be defined as an IRWE as long as the expense meets all of the criteria. Professional staff providing the service should be able to provide verification of the service, the relationship to the person's ability to work, and payment for the service. If the services are paid for via a combination of sources, including a contribution from the person using the service, it will be necessary to determine how much the person actually pays for deductible services. For example, it will be necessary to examine how the residential program divides its services, e.g. room, board, staff support, and what portion of the service fees are paid by the beneficiary. It will then be necessary to identify what percentage of the total fee can be defined as work-related and deducted as an IRWE. Policy-to-Practice Residential Support Services Typically, the person with the disability does not pay the entire fee for residential services and supports. If State, Federal or other public/private funds are involved, SSA will need to determine the existence of a contract or agreement between the individual and the residential program, or if a law prescribes the manner in which services are funded. See POMS DI for more on this topic. Computation The following example illustrates how IRWEs are used to reduce countable income. In the case of Title II, 100 percent of the cost of IRWEs is simply deducted from the reported gross monthly wages. 1074

35 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense Example Using IRWE to Reduce Countable Income Mark has cognitive limitations and rheumatoid arthritis and is receiving $650 per month CDB benefits. He starts working with gross monthly earnings of $1,400. Without an IRWE, Mark's gross wages of $1,400, because they are greater than the SGA, will ultimately result in suspension, and eventual termination, of his Social Security benefits following completion of his TWP. STEP ONE Example: IRWE Calculations --- Impact on Social Security Benefits IRWEs: Physical Therapy Co-Pays $80, Gym Membership $85, Medication Co-pays $40, Medical Transportation $60 = Total monthly IRWE expense of $265. $ 1, Gross Monthly Earnings Minus IRWE --- $ = $ 1, Equals Total Countable Income STEP TWO $ 1, SGA in 2017 $ 1, Mark's Countable Income- below SGA By deducting IRWEs totaling $265 per month from his gross monthly wages, Mark's countable income is below SGA (countable income of $ ) allowing him to maintain his Title II benefit payments. Moving from Policy to Practice There is no time limit on how long an IRWE can be used to reduce countable income. This is very beneficial for individuals who have on-going IRWE expenses such as transportation assistance or supported employment follow-along services. It is not necessary that an IRWE be a monthly recurring expense. In some instances, an individual may have a one-time expense, such as a piece of medical equipment. The entire cost of an expense may be deducted in one month or be pro-rated over a period of twelve months. Pro-rating the expense is helpful if the services or items are costly, but smaller expenses should not be ruled out if proration would reduce countable income to below the SGA level. The practitioner should become familiar with the POMS on IRWE, but should not limit the discussion to the list of expenses provided in that section. Practitioners should encourage beneficiaries to think creatively when identifying possible IRWEs. If an item is necessary for the person to work, needed because of the impairment, and paid out-of-pocket, it should be submitted to SSA for approval. For example, a young 1075

36 Section GG National Social Security Disability Law Conference MODULE 3 CHAPTER 4 Impairment-Related Work Expense man with traumatic brain injury, who could not remember to set his alarm every night, and was frequently late for work and was at-risk for losing his job arranged to have a wake-up service call him at the appropriate time each morning. SSA approved the monthly fee for this service as an IRWE. If it is the type of purchase that does not typically result in a receipt, (e.g. paying a friend to provide transportation), the beneficiary can ask that an informal receipt be created by the friend/driver. Analysis Beneficiaries should be reminded that an expense might qualify as an IRWE even if the expense is necessary whether or not he or she is working. Expenses may change over time; some expenses are necessary when work initially begins, such as modifica- tions to uniforms that are required by the employer or adaptive equipment or computer software. Other expenses will be repeated from month to month. Some may change as co-pays increase or decrease and medications and dosages are adjusted. SSA must be made aware of any change in monthly IRWEs. Every analysis should contain calculations that demonstrate how an IRWE can reduce the countable income below the SGA level, resulting in a continuation of benefits while working. Action Steps During the initial interview, beneficiaries may not be able to think of possible IRWEs because they have not yet started working. Plan to review IRWEs again once the individual begins working. The practitioner should not assume that the beneficiary will remember the discussion on IRWE at the time the initial summary of the analysis was presented. Giving examples of IRWEs may help the individual identify expenses that qualify. Likewise, a discussion about daily activities may bring potential IRWEs to light. If an expense appears to meet all of the necessary criteria, individuals should document the cost of the expense and submit it to the local SSA office in letter format. The practitioner can assist the individual with the letter, listing each of the criteria and explaining how the expense meets the criteria. The SSA Claims Representative will review it and make a determination. The individual should ask the Claims Representative how to submit proof of payment, such as receipts or invoices stamped PAID. While SSA will not formally "pre-approve" an IRWE before the expense is incurred or needed for an SGA determination, most Claims Representatives are willing to discuss a potential IRWE and indicate whether or not it would be approved. The practitioner and the beneficiary should discuss how to keep track of receipts and when to submit them to SSA. If necessary, purchase a receipt book from an office 1076

37 Title II Work Incentives Section GG MODULE 3 CHAPTER 4 Impairment-Related Work Expense supply store and ask the person providing the service or selling an item to fill out and sign a receipt. The beneficiary should keep a log of the documentation on IRWEs sent to SSA: dates of the expenditure(s), amount of each IRWE, type of proof, and the date the proof was sent or delivered to SSA. Maintaining an expandable folder with a section for IRWE receipts and copies of letters sent to SSA concerning IRWEs is a great way to begin self-management of benefits by the beneficiary. 1077

38 Section GG National Social Security Disability Law Conference 1078

39 Title II Work Incentives Section GG The Impact of Earnings on SSDI Benefits Raymond Cebula, Esq. 1079

40 Section GG National Social Security Disability Law Conference The Impact of Earnings on SSDI Benefits NOSSCR DISABILITY LAW CONFERENCE PHOENIX,AZ SEPTEMBER 13 16, 2017 Q&A: Log on to NOSSCR.cnf.io The Impact of Earnings on SSDI Benefits Disability, Workplace & Employment Support Practice Online Professional Development Courses and Certificate Programs Title II Work Incentives Trial Work Period Impairment Related Work Expense Extended Period of Eligibility Subsidy & Special Condition Extended Medicare Income Averaging Expedited Reinstatement Unsuccessful Work Attempt 1080

41 Title II Work Incentives Section GG Trial Work Period (TWP) Nine month period to test ability to work Beneficiary performs work for pay and earns above the TWP level ($840 gross per month in 2017) Benefits are paid during the TWP regardless of how much is earned! NO OTHER WORK INCENTIVES APPLY DURING THE TWP! Tip: The trial work level will likely increase each year, based on the national average wage index. The table in your text materials shows how the amount has changed over the years. Always apply the TWP amount in effect at the time the work was performed! When does the TWP begin? First month the beneficiary is entitled to a cash payment the entitlement month as long as they have received a written favorable decision from SSA Entitlement month is the month following the five month waiting period The TWP cannot begin any earlier than the date the application was filed Self employed individuals use a TWP month when net earnings in a month are above the TWP level, OR They engage in the business activity for at least 80 hours in the month However, start up business activity is not counted toward the TWP 1081

42 Section GG National Social Security Disability Law Conference The TWP ends when the individual has nine TWP months that fall within a rolling 60 month window The nine months do not need to be consecutive But must all fall within a 5 year period Always determine the first work month that was at or above the TWP level to begin charting TWP months As a result of the rolling period the individual may accumulate more than 9 TWP months in total. Carefully track the TWP* The beneficiary needs to know when the TWP ends other work incentives can be applied once it is complete SSA may evaluate the work after the fact it helps if the beneficiary can provide wage data KEEP RECORDS! * See Jackie scenario and answer key in materials. For ease of use please consider TWP earnings gross wages and earnings countable wages. Work CDR After the TWP, SSA will conduct a work CDR. Forms used during Work CDR: SSA 821 BK, or Work Activity Report, is completed by the beneficiary (or representative) POMS DI SSA 3033 BK, or Employer Work Activity Questionnaire, is completed by the Employer POMS DI SSA 820 F4 Work Activity Report for self employed individuals POMS DI

43 Title II Work Incentives Section GG Extended Period of Eligibility () The period of eligibility that starts with the month after the TWP ends and continues for the next 36 months whether or not work continues. For any month during this period that the person s countable earned income is less than the SGA level, they continue to receive the SSDI check. The first time after the TWP that earning rise above the SGA level ($1170 in 2017), Social Security will plan to cease benefits but will allow the person to receive a check for that month and the 2 following months as a grace period before ceasing checks altogether. Extended Period of Eligibility () SGA: If at the end of the TWP, a work CDR indicates the ability to perform SGA, the individual will receive a check in the first month of the and the following 2 months before cessation begins. NO SGA: If at the end of the TWP, a work CDR indicates that no ability to perform SGA exists, payments will continue until the first month of SGA activity and this month will be paid along with the 2 months following before benefits are ceased. Extended Period of Eligibility () If after cessation begins, the person s countable earnings again fall below the SGA limit in any of the months, the individual will be entitled to SSDI benefits in those months. TIP: REPORT, REPORT, REPORT!!! Note that Medicare eligibility is NOT impacted during the, however if no cash benefit is paid the individual will be billed quarterly for that monthly premium by CMS. Currently premiums may vary from person to person depending upon when they first enrolled in Medicare. 1083

44 Section GG National Social Security Disability Law Conference Extended Period of Eligibility () TIP: Benefits CANNOT be terminated during the ; only ceased. Benefits will be terminated the first time the individual performs SGA AFTER the has ended. As a result, the grace period may fall during or after the depending upon when the first month of SGA activity occurs! When are benefits terminated? If countable earnings are above the SGA level after the 36 months have passed (i.e. month 43) Social Security Disability cash benefits will be terminated (if the grace period has already been used). If grace period has not been used T month and C month are the same month! What is Countable Income? 1 SSA can only count earnings that represent the individual s own work effort or productivity Sick & vacation not counted Bonus & incentive pay counted unless evidence shows it is not related to productivity Earnings in a cafeteria/flex spending plan added back into gross earnings before SGA determination 1084

45 Title II Work Incentives Section GG What is Countable Income? 2 Countable Income = The portion of income that remains after work incentives are applied. Several work incentives impact the countable income/sga decision: Income Averaging Income may be averaged to reduce countable income below SGA. It is used if: pattern of work is/was continuous; and no significant change in work patterns or earnings; and no change in SGA earnings levels during the period involved. Used to adjust cessation month. May NOT be used after the cessation month to determine payment months during the. Unsuccessful Work Attempts An Unsuccessful Work Attempt (UWA) is an effort to do substantial work in employment or self employment which is discontinued or reduced to the non SGA level after a short time (no more than 6 months) because of the individual's impairment(s) or the removal of special conditions related to the impairment(s) that are essential to the continued performance of work. 1085

46 Section GG National Social Security Disability Law Conference Use of the UWA To assist with SGA determinations in order to identify cessation month. Applied during initial application and in CDR cases in determining whether, because of work activity, disability exists, continues or ceases. Criteria do not apply during TWP, or in determining whether payment should be made for a particular month during the after the cessation month. UWA Criteria A significant break in continuity of work either not working or work below SGA levels (30 days) Break caused by the disability or removal of special conditions SGA level work lasting more than 6 months is not UWA. UWA 6 months Work must have ended or have been reduced to non SGA level within 6 months due to the impairment or to the removal of special conditions related to the impairment that are essential to the further performance of work. The change that occurred in the Bi Partisan Budget Act eliminated the 1 3 month and 4 6 month UWA period and now allow all UWA to be treated as 1 3 month UWAs. Any work effort that lasts longer than 6 months cannot be considered a UWA. 1086

47 Title II Work Incentives Section GG Special Conditions & UWA Special conditions are situations especially arranged to accommodate the worker s disability, or an unusual job opportunity, such as in a sheltered workshop. For example, the person: Required and received special assistance from other employees in performing the job; or Was allowed to work irregular hours or take frequent rest periods; or Was provided with special equipment or was assigned work especially suited to the impairment Law and Policy Tip There is no limit to the number of times UWA may be applied, as long as there is no cessation (grace period) and certain criteria are met. The beneficiary must be out of work or have earnings reduced to below the SGA level for at least 30 days, or be forced to change to a different type of work or another employer. Again, UWA only applies BEFORE the cessation month stuck! Impairment Related Work Expense IRWE reduces countable income for SGA purposes IRWE is an expense for an item or service that 1) enables the person to work, 2) is necessary because of a physical or mental impairment, and 3) is paid for by the recipient Must be paid for during a month of work activity* and the cost must be reasonable. The cost of an IRWE is deducted from gross earnings, reducing countable income below SGA Must be approved by SSA 1087

48 Section GG National Social Security Disability Law Conference Policy & Practice Tips: Certain items or services may be approved as IRWE even though they are also needed for non work activities, such as prescription medication or other health related services The impairment must be of record ; report additional impairment(s) to SSA; Details found in POMS DI IRWE IRWEs can be used any time earnings are above SGA after the TWP. Recurring monthly or non monthly expenses installment payment May be deducted entirely in the month the payment is made or prorated over the months in the payment period Non recurring one time expense may be prorated over a 12 month period Rental expenses. Examples of Deductible IRWE Supported Employment services Attendant Care Transportation Medical Equipment/devices Work related Equipment & Assistants Service animals Residential Modifications Routine drugs/medical services Non medical appliances & devices Services rec d through community based residential program *AN IRWE IS A COST TO THE EMPLOYEE! 1088

49 Title II Work Incentives Section GG Subsidy & Special Condition SSA uses earnings that represent the real value of the work performed to determine SGA If the individual is paid more than the value of their work, there may be a subsidy or special condition in place If the individual has fewer duties than others doing the same work, there may be a subsidy or special condition in place A letter from the employer documenting subsidy will be accepted by SSA. What circumstances suggest a subsidy or special condition? Sheltered employment Mental impairment or disability, started in childhood or adolescence Discrepancy between amount of pay and the value of services Unusual help from others Government sponsored job training/employment, particularly those for individuals with disabilities Subsidy Support provided by the employer Extra supervision Lower productivity compared to unimpaired workers Allowing extra breaks or flexible schedule Removing some job tasks Employer subsidies are specific or non specific An exact dollar value is placed on the subsidy A % of salary/time is placed on the subsidy *A letter from the employer documenting the subsidy will generally be accepted by SSA. A Subsidy is a cost to the Employer. 1089

50 Section GG National Social Security Disability Law Conference Special Condition Items or support provided by someone other than employer (e.g. VR or Goodwill) On the job assistance, i.e., job coach performs part or all of the person s job duties The value of the job coach special condition is deducted from the gross wages SSA does not use the job coach s salary or hourly wage but instead multiplies # hours job coaching x the beneficiary s hourly wage! Subsidy vs. Special Condition When SSA determines whether to deduct dollar amounts from gross earnings, the only difference between a subsidy and a special condition is the method of valuation. The valuation method is determined by who is paying for the service (the employer or a 3rd party). *A SPECIAL CONDITION IS A COST TO A THIRD PARTY! Expedited Reinstatement EXR Provision in the Ticket to Work and Work Incentives Improvement Act Prior to 2001, new application was required for beneficiaries terminated due to the performance of SGA if the job was lost or earning reduced <SGA Effective 2001, benefits can be reinstated without new application if certain criteria met Applies to both SSI AND Title II programs, however is seen more often in the Title II program 1090

51 Title II Work Incentives Section GG EXR Criteria Not be performing SGA in the month of application Unable to work at the SGA level due to medical condition Have stopped performing SGA within 60 months of prior termination Have a current medical impairment that is the same or related to original Continue to be disabled based on medical improvement standards EXR NOTE! It is not necessary that the impairment(s) caused work to stop or earnings to fall below SGA! It is simply necessary that this event occurred! EXR vs. New Application The applicant can decide to file a new application rather than an EXR application. No provisional benefits are paid with a new application; however it is possible that monthly benefits level may be higher. SSA is responsible for providing the information necessary to assist the applicant with this decision. 1091

52 Section GG National Social Security Disability Law Conference EXR vs. New Application Provisional Benefits. New TWP/ begins after 24 monthly cash payments. Disability requirements: same or substantially related. Payments are same as those before SGA began. Health care may be reinstated immediately with cash. New TWP/ immediately upon approval of disability and benefits status. Disability requirements: disabling impairment according to standard definition. Potentially different benefits payment. Health care reinstated when new eligibility is established. EXR If eligible for EXR, the benefits of the beneficiary and any dependents/auxiliaries may be reinstated, if currently eligible (aux. must however, file a new application to determine eligibility). Up to six months of provisional benefits are paid while EXR request is pending Provisional benefits do not have to be repaid if denied EXR EXR SSA will conduct a medical review to determine if there is medical improvement using the medical improvement standard. Tip: If SSA does not reach a decision within six months, the provisional benefits will stop. Contact the AWIC for assistance in month 4. If benefits stop the beneficiary may be eligible for Emergency Payments. 1092

53 Title II Work Incentives Section GG EXR & SSDI New period of disability with a new onset date Initial reinstatement period (IRP) until the individual receives 24 months; benefits are paid only if the person does not earn at or above the SGA level IRWE & Subsidy apply during IRP, but income averaging and UWA do not (a cessation has already stuck!) When 24 EXR payments received, a new TWP//EPMC/EXR period is granted Continuing Disability Reviews CDRs are a mechanism by which SSA determines whether a benefits recipient continues to be medically disabled and eligible for continued benefits payments. SSDI (T II) recipients are subject to work related CDRs as well as medical CDRs. Medical CDRs remain SSA s trump card. If the worker is not disabled they are not eligible to participate in work incentives unless 301 applies. TWWIIA CDR Protections SSA will not initiate a Medical CDR while an SSDI beneficiary is using a Ticket. WHAT DOES USING A TICKET MEAN? 1093

54 Section GG National Social Security Disability Law Conference CDR Protections Using a ticket requires that: the ticket be assigned, and the recipient must be actively making progress in accordance with their approved plan. Employment Networks (ENs) monitor progress and the Program Manager (PM) determines if the recipient s ticket is in use. CDR Protections SSA cannot initiate a medical CDR if the recipient s ticket is in use. However, if the ticket is assigned after a medical CDR has begun; the medical CDR will be completed. Medical Improvement standard must be used. CDR Protections If an SSDI recipient has received 24 monthly payments, SSA will not be allowed to initiate a CDR based on work activity alone. Combined protections will be effective to suspend both work and medical CDRs while using a ticket. 1094

55 Title II Work Incentives Section GG Medicare & Work Overview of Medicare Four parts: Hospital Insurance (Part A) Medical Insurance (Part B) Medicare Advantage Program (Part C) Medicare Prescription Drug Plan (Part D) When SSDI cash payments are suspended or terminated due to earnings there are no benefits from which to withhold premiums. Beneficiaries are billed on a quarterly basis up to $ per quarter plus the cost of Part D, if applicable. Extended Medicare Coverage Effective October 2000, Medicare continues for at least 93 months following the TWP Some beneficiaries get more than 93 months of coverage, depending on when they perform SGA Three rules determine the termination date Question & Answer 1095