Implications of Work and Earnings on SSI

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1 Implications of Work and Earnings on SSI Program on Employment and Disability A distance education series promoting utilization of work incentives sponsored by the Research Foundation for Mental Hygiene under a grant from the U.S. Department of Labor

2 The thoughts and opinions expressed in this and future programs are those of the trainers and do not necessarily reflect the viewpoints or official policy positions of the Social Security Administration, Department of Labor and/or any other state or federal agency. The information, materials and technical assistance are intended solely as informal guidance and are neither a determination of legal rights or responsibilities, nor binding on any agency with implementation and/or administrative responsibilities for programs discussed. 2

3 3 PRESENTERS Thomas Golden, Faculty, Cornell University s Program on Employment and Disability James Sheldon, Supervising Attorney, Disability Law Unit, Neighborhood Legal Services, Inc.

4 4 QUESTIONS By to Toll free to

5 5 Social Security Administration (SSA) Supplemental Security Income (SSI) Social Security retirement benefits to those 62 or older; dependent benefits to spouses and children of deceased, disabled, or retired workers; and/or, disability benefits (SSDI)

6 6 Definition of Disability "The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

7 individuals must have a disability that can be documented by a qualified medical examiner and must also meet or equal a certain level of disability; the disability must be expected to last 12 or more months or be expected to result in death; individuals cannot be working at the time of application or, if working, can not be earning more than the substantial gainful activity level or SGA; and, per separate statutory definition, individuals who are blind and applying for SSI do not need to meet an SGA test but rather a test to ascertain level of blindness. 7

8 8 Definition for those under age 18 a person under the age of 18 shall be considered disabled if they have a medically determinable physical or mental impairment which results in marked and severe functional limitations and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

9 9 Substantial Gainful Activity (SGA) $810 a month for individual with a disability other than blindness $1,350 for a person who is blind. Individuals engaging in work at or above the SGA level are considered to be demonstrating the ability to do substantial work in spite of their disabling condition and are consequently determined to be not disabled under Social Security law during the initial eligibility phase.

10 10 Continuing Disability Reviews (CDR) Medical Improvement Not Expected (MINE): CDR every five to seven years; Medical Improvement Possible (MIP): CDR every three years; Medical Improvement Expected (MIE): CDR every six to eighteen months; or, Vocational Re-examination Cases: CDR pending training/rehabilitation program completion

11 11 Section 301 Protection provide for a continuation of SSI and/or SSDI respectively to individuals who have medically recovered but who are participating in approved vocational rehabilitation programs.

12 12 Child Age 18 Re-determination Child 18 Adult Application of Section 301 / 5113 (Sections 1631(a)(6) and 225(b) of the Social Security Act) Possible continuation of benefits

13 13 Financial Re-determination Reviews are non-medical reviews which occur annually for persons in statuses 1619(a) and 1619(b). For others, less frequent reviews may be conducted. Updates: - income - resources, and - living arrangements Conducted in person, by phone or mail

14 14 Income Test Earnings / Wages In-kind support received $ Unearned Income Other benefit programs or monetary support A standardized formula accounting for earned and unearned income is used by SSA to compute the dollar amount of cash benefits received.

15 15 Federal Benefit Rate The maximum dollar amount set by Congress that individuals or couples can receive in SSI cash benefits each month. The maximum benefit amount received: - Unearned income - Earned income - Living arrangements and inkind support - Use of available work incentives such as IRWE, BWE and PASS New York supplements the FBR 2004 $651 single $950 couple $587 w/others NYS

16 16 Income Exclusions Parent s income / resources once a child reached age 18, regardless of student status; The full amount of a grants or scholarships or fellowships used to pay the cost of tuition, books and other educationrelated expenses are fully excluded; and/or, Food, clothing, and shelter provided inkind by a non-profit organization as income if assistance is based on need and is certified by the state.

17 17 Resource Test The SSI program has specific resource limitations set by statute and include real or personal property (including cash). Limits - $2,000 single / $3,000 couple Not subject to regular COLAs Limit cannot be exceeded at the beginning of each month Resources in excess will render individuals ineligible for SSI cash benefits Ineligibility will continue until resources fall below allowable limits Eligibility will cease if excess continues for 12 consecutive months

18 18 Property Essential to Self-Support This SSI provision allows individuals to exclude certain resources which are essential to their means of self-support. Properties that are used in trades or businesses by individuals for work as employees are totally excluded as of May 1, Up to $6,000 of equity value of non-business properties which are used to produce goods or services essential to daily activities are excluded Also, up to $6,000 of equity value of non-business income-producing properties are excluded

19 19 QUESTIONS By to Toll free to

20 20 Once determined eligible for a SSI cash benefit, the monthly amount of SSI received is dependent on total countable income and resources less income exclusions: $20.00 general income exclusion $65.00 earned income exclusion

21 21 Impact of Unearned Income STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ 0.00 Count. Earned Income = $ Total Count. Income STEP TWO: Calculating Countable Earned Income STEP FOUR: Calculating Benefit Check $ Base SSI Rate - $ Total Count. Income = $ SSI Payment

22 22 Impact on Earned Income STEP ONE: Calculating Countable Unearned Income STEP THREE: Calculating Total Countable Income $ 0.00 Count. Unearned Income + $ Count. Earned Income = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ GIE if not used above = $ Remainder - $ Earned Inc. Exclusion = $ Remainder /2 $1 for $2 Offset = $ Count. Earned Inc. STEP FOUR: Calculating Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

23 23 Impact on Both STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Inc. + $ Count. Earned Income = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ Earned Inc.Exclusion = $ Remainder /2 1 for 2 Offset = $ Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

24 24 Student-Earned Income Exclusion allows individuals under age 22 who regularly attend school and are not considered head of household or married to exclude up to $1,370 of earned income per month (up to a maximum of $5,520 per year). This exclusion is applied before any other exclusions and limits will be annually indexed. Earnings received prior to the month of eligibility do not count toward the $5,520 annual limit. Limits in 2001: $1,290/$5,200; 2002: $1,320/5,340; 2003: $1,340/$5,410 Prior to January 2001 was $400/$1,620

25 25 Impact of SEIE STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ 0.00 Count. Earned Income = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $1, Gross Earned Income - $1, SEIE (max/mos.ded.) = $ Remainder - $ Earned Inc. Exclusion = $ 0.00 Remainder /2 1 for 2 Offset = $ 0.00 Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate (living with others) - $ Total Countable Income = $ SSI Payment

26 26 QUESTIONS By to Toll free to

27 (a) & (b) Public Law has established two special provision statuses known as 1619(a) and 1619(b). Section 1619(a) enables individuals who continue to be disabled to receive special SSI cash payments in place of their regular SSI payments, when earnings exceed the SGA level

28 (b) Section 1619(b) provides for continued Medicaid eligibility. To qualify for 1619(b) Medicaid status: Must have a disabling condition or continue to be blind; Must need Medicaid in order to work; Must be unable to afford benefits equivalent to those received if not working; and/or Must meet all other requirements for SSI payments other than earnings. At the time that SSI cash payments cease due to increased earnings over the Break even point, the SSA computer will automatically determine eligibility for 1619(b).

29 29 Importance of 1619(b) Section 1619(b) protects not only individuals Medicaid coverage, but also maintains their eligibility to receive SSI cash payments in future months that countable income falls below the allowable limits. The key is to establish Medicaid eligibility prior to entering 1619 status to ensure entry to 1619(b) when earnings exceed the BEP.

30 30 IRWE and SSI The purpose of the IRWE work incentive is to enable recipients of SSI benefits to recover some of the costs of expenses incurred as a result of their disability to support their work. Deducting the cost of impairment-related items and services from monthly gross wages increases SSI cash payments. The cost of IRWE expenses can also be deducted from gross earnings during initial SSI application processes enabling individuals to meet the SGA requirement.

31 31 IRWE Three-Part Test 1. The individual must pay for the item or service; 2. The item or service must be related to the person s disability; and, 3. Without receiving the item or service the individual could not work.

32 32 IRWE and SSI STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ Count. Earned Income = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ Earned Inc. Exclusion = $ Remainder - $ IRWE = $ Remainder / 2 1 for 2 Offset = $ Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

33 33 IRWE Summary There are no time limits on how long individuals can use the IRWE to pay for particular services or items. A one time expense may be taken either all in one month or pro-rated over a period of 12 months. 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.

34 34 Blind Work Expense Under BWE any SSI recipient whose primary diagnosis is blindness, and who receives earned income is entitled to the exclusion from that income of any ordinary and necessary expenses attributable to the earning of income. This is not counted in determining SSI eligibility and monthly cash payments if individuals are: 65 or under; or 65 or older and receiving SSI cash payments due to blindness for the month before they turned 65. A BWE need not relate directly to individuals blindness; it need only be work-related expenses incurred by the individual, be reasonable, and may not exceed total countable income. A BWE taken under SSI may also be able to be simultaneously counted as an IRWE under SSDI

35 35 BWE and SSI STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ Count. Earned Income = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ Earned Inc. Exclusion = $ Remainder / 2 1 for 2 Offset = $ Remainder - $ BWE = $ Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

36 36 PASS PASS is an SSI work incentive under which persons with disabilities can set aside income (earned, deemed or in-kind) and/or resources to be used to achieve specific work goals. A PASS can be established to cover the costs of obtaining an education; receiving vocational training; starting a business; or, purchasing support services. PASS is just the means to acquire the services and items needed for starting work, not the means to make income or resources available for ongoing costs. PASS increases or maintains income producing capabilities. To be approved, there must be a reasonable chance that individuals can achieve their vocational goal and there must be a clear connection between vocational goals and increased earning capacities.

37 37 SSI with no PASS STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ Count. Earned Income = $ Countable Income - $ 0.00 PASS Deduction = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ Earned Inc. Exclusion = $ Remainder / 2 1 for 2 Offset = $ Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

38 38 SSI with a PASS STEP ONE: Calculating Countable Unearned Income $ Unearned Income - $ Gen. Inc. Exclusion = $ Count. Unearned Inc. STEP THREE: Calculating Total Countable Income $ Count. Unearned Income + $ Count. Earned Income = $ Countable Income - $ PASS Deduction = $ Total Countable Income STEP TWO: Calculating Countable Earned Income $ Gross Earned Income - $ Earned Inc. Exclusion = $ Remainder / 2 1 for 2 Offset = $ Count. Earned Inc. STEP FOUR: Calculating the Benefit Check $ Base SSI Rate - $ Total Countable Income = $ SSI Payment

39 39 Questions and Answers By to Toll free to

40 40 WRAP UP Complete your program evaluation Access toll free technical assistance 24/7 at Use your Resource Directory Subscribe to the FREE Benefits Planner by calling the number above Subscribe to the FREE statewide listserv by ing your request to Order transcript at

41 41 NEXT PROGRAM Connecting Persons with Disabilities Who Work to Medicaid: New York State s Medicaid Buy-In February 6, :00 3:30 PM

GLOSSARY OF TERMS. Center for Medicare and Medicaid Services. This is a U.S. Department that oversees Medicare and Medicaid. Previous name HCFA

GLOSSARY OF TERMS. Center for Medicare and Medicaid Services. This is a U.S. Department that oversees Medicare and Medicaid. Previous name HCFA GLOSSARY OF TERMS Appeals Benefit Break Even Point BWE CDR CMS COLA Countable Earned Review process for an individual if there is a disagreement concerning a claim for benefits. This applies to applications