NENA SSDI Two for One Offset Proposal. Simplifying Work Incentives for SSDI Beneficiaries. March 9, 2015

Transcription

1 NENA SSDI Two for One Offset Proposal Simplifying Work Incentives for SSDI Beneficiaries March 9, 2015 Guiding Principles Encourage work Work must be supported as a path out of poverty and toward inclusion into society. Messaging by SSA needs to encourage beneficiaries to work, to the extent possible for them. Beneficiaries must be provided the knowledge of how to use work incentives as a bridge to self-sufficiency. Simplify the return to work process Work incentives need to be consolidated and simplified where ever possible. The system must be understandable for SSDI beneficiaries to have a realistic path to self-sufficiency. Wage reporting needs to be streamlined through use of technology and automated systems. Maintain solvency and stability of system Policy changes must produce savings to the SSDI Trust Fund. Changes that encourage work, result in increased income, and establish greater parity with non-disabled workers benefit both the system and beneficiaries. Retain necessary supports for beneficiaries who are unable to work. To achieve the guiding principles, NENA offers this detailed proposal to engage the dialogue toward producing an SSDI offset. Based on our experience as public and private-sector service providers, we believe the components of this proposal are necessary to operationalize our guiding principle goals. Proposal: 1. Eliminate Substantial Gainful Activity relative to return to work. 2. Eliminate the Trial Work Period, Extended Period of Eligibility, Expedited Reinstatement, and work CDR s.

2 3. Implement a 2:1 offset from first dollar earned for SSDI. * 4. For those beneficiaries receiving children s benefits, apply the 2:1 offset first to the primary beneficiary s earnings and not reduce children s benefits until the primary beneficiary reaches full cessation. Then apply the 2:1 offset to the children s benefits until those reach full cessation or are otherwise no longer payable. 5. Reduce countable income dollar for dollar after offset for Impairment Related Work Expenses (IRWEs), and by the actual determined value of subsidized wages. * 6. Continue attachment to the SSDI program for as long as the beneficiary continues to be medically disabled regardless of work activity. Eliminate the twoyear waiting period for eligibility for Medicare. 7. Implement cooperative agreements with other state or federal agencies to achieve real-time earnings reporting instead of relying on beneficiaries to report their earnings. 8. Include wording in various informational sources and design mandatory training for personnel at all levels that encourages work to the extent possible and guides beneficiaries to learn and use work incentives. 9. Ensure sufficient funding for administrative staff necessary to carry out these provisions. *Alternative options are presented at end of document Discussion: After 12 years of ticket operations we know: Existing complexity of the system causes a multitude of issues for beneficiaries to the extent that those issues are a major disincentive to return to work, at any level. Current Ticket to Work provisions cause ENs to reject more ticket holders than we accept because beneficiaries either have limited work capacity or desire part time work. Current SSDI policy encourages limiting work because it is often financially more advantageous to park below SGA. Substantial numbers of beneficiaries want to work but truly cannot work above SGA. It makes sense that public policy allow them to work to the extent that they can because all earnings contribute not only to the economy but also the individual s FICA contributions. This potentially increases their retirement benefits thus improving their financial well-being throughout the rest of their lives.

3 Eliminating the various work incentives will necessarily require changes in TWWIIA to allow ENs to serve ticket users at all levels of work and not focus only on those whose goal is to work toward self-sufficiency and eventually leave the rolls. Justification: 1. Eliminate SGA related to returning to work a. Eliminating SGA and replacing it with a 2:1 offset is advantageous to all stakeholders. The beneficiary will always have more income, and the Trust Fund will always save money in reduced benefits. b. Alternatively, applying the 2:1 offset without eliminating SGA or any other amount above $0 encourages parking c. A 2:1 offset allows a beneficiary to work as much or as little as he or she can or wants. In all cases he or she will be better off. 2. Eliminate the TWP, EPE, work CDRs and EXR Starting the offset from first dollar earned necessarily causes an SSDI beneficiary s benefits to be put in cessation in any month that a beneficiary s earnings rise to the level that no benefit is payable. An SSDI beneficiary s eligibility should only be terminated through the medical CDR process if the individual has medically improved and no longer has a disabling impairment according to the Title II definition of disability. 3. Implement 2:1 offset Consistent with the guiding principle of simplifying the system, the recommendation of this proposal is to apply the reduction of $1 for every $2 earned to all beneficiaries. 4. Family benefits payable When a primary beneficiary returns to work at a level where cash ceases, any children s or family benefits also ceases. Losing this income can be a strong disincentive to work. Unless family benefits cease for other reasons such as age eligibility exceeded, allowing the 2:1 offset on family benefits, after applying the offset to the primary beneficiary s earnings will eliminate the disincentive. 5. Apply IRWEs for each dollar earned IRWEs are designed to offset costs specifically related to disability in order to support beneficiaries to work. Eliminating SGA allows SSDI beneficiaries to potentially recoup the costs of disability-specific expenses related to the return to work earlier than under current law. This

4 encourages a person with a disability to work even if their disability-related expenses are very significant. It also ensures that all deductions are truly specific to the needs of that particular individual and are not a blanket amount that pays when none have been incurred or does not cover legitimate expenses above what the policy offset allows. We realize this could add cost to the program; however, savings from 2:1 offset starting from first dollar earned instead of above SGA will potentially negate the increased IRWE costs. 6. Maintain permanent attachment to Medicare Eliminating the SGA and other benchmarks that necessarily only allow termination of benefits when a beneficiary is reviewed medically and found no longer eligible for SSDI benefits points to the logic that the same provision be applied to Medicare. The feasibility of this provision is contingent on CBO cost estimates. 7. Cooperative agreements with other agencies for wage reporting Overpayments continue to be a problem primarily due to the following: Beneficiaries failure to report earnings, Field offices being overloaded and not posting earnings timely, Time wasted among all involved in tracking down earnings and trying to resolve earnings-related problems that should not have occurred. Billions of dollars not recovered for the Trust Fund Relying on beneficiaries to report earnings has never worked. With today s technology it seems logical that systems between federal and state agencies should be able to share data in a manner that improves efficiency, accuracy, and timeliness of earnings reporting. 8. Adequately fund SSA administrative functions Ongoing cutbacks in staff, field office closures, and other priorities for adjudicating initial claims have resulted in overpayments that discourage beneficiaries from working. Further these cutbacks prevent timely CDRs. The changes proposed here can only work with adequate administrative staff levels to support them. Proposal alternative options: #3. Implement 2:1 offset from first dollar earned for SSDI

5 Apply the offset only to new beneficiaries or those current beneficiaries who choose to participate in the offset voluntarily and grandfather others to operate under current law. Although no beneficiary will be harmed by a 2:1 offset, the alternate of grandfathering existing beneficiaries does acknowledge that under current law a beneficiary with lower earnings is technically financially better off limiting hours and staying below SGA. #5. Apply IRWEs for each dollar earned Remove the administrative burden to SSA of making adjustments to benefits payments and allow the beneficiary to derive benefit under the current tax code by including applicable IRWE information with their federal income tax filing.