Social Security Work Incentives and Financial Literacy PENNSYLVANIA STATE EFSLMP WEBINAR SERIES JUNE 27, 2016

Transcription

1 Social Security Work Incentives and Financial Literacy PENNSYLVANIA STATE EFSLMP WEBINAR SERIES JUNE 27, 2016

2 OVERVIEW OF BENEFITS PROGRAMS Two Main Programs: SSI (Supplemental Security Income) with Medicaid SSDI (Social Security Disability Insurance) with Medicare Each Program has its own specific work incentives Can receive earned income of certain amount and retain more income than if they were not working. Social Security Work Incentives Reference Manual Red Book 2

3 Some additional specific incentives we will discuss IRWE Available for SSI and SSDI Subsidy Available for SSDI 1619(b) Enables people who received SSI to keep their Medicaid when SSI gets too high PASS PLAN Available for people who have another source of income other than SSI to obtain eligibility for SSI or increase SSI payment MEDICAID BUY IN- Way to obtain Medicaid for people who are working but have too much income to receive SSI, 3

4 THINKING DIFFERENTLY Old Way of Thinking: Benefit Limits define Employment Goal New Way of Thinking: Employment Goal defines which Work Incentives to use 4

5 WHAT IS BENEFITS (WORK INCENTIVE) PLANNING? Process Benefits Screening (information and referral BPQA) Benefits Advisement (analysis of work incentives for specific goal) Benefits Management (ongoing support) 5

6 WORKING AS A TEAM Build Capacity: Develop relationships with local Social Security Staff and WORK TOGETHER!! 6

7 SUPPLEMENTAL SECURITY INCOME: BASICS & WORK INCENTIVES 7

8 IMPORTANT CONSIDERATION SSDI and SSI are two completely different programs. Governed by entirely different rules and regulations Administrated by the same agency 8

9 WHAT IS SUPPLEMENTAL SECURITY INCOME (SSI) MEDICAL BENEFITS THAT ACCOMPANY SSI Needs Based Program --General Funds Based on Social Security determination of disability Medicaid begins as soon as eligible for SSI What is Medicaid? Pennsylvania adds on a monthly State Supplement 9

10 Supplemental Security Income -- Eligibility Who is Eligible: Experience a disability Medical criteria Substantial Gainful Activity-SGA criteria Have little or no Resources Less than $2,000 ($3,000-couple) Have little or no Income Countable income below *$733/month 10

11 SSI & INCOME Maximum SSI check $733/month or $1,082 month for a couple (federal amount) SSI Check is Reduced by: Living Arrangement Reduced 1/3 rd if free room and board Reduced by 1/3 rd or less if contributing some, but not all, to room and board Unearned First $20 (General Income Exclusion) isn t counted, the rest counts Earned Income Multiple Work Incentives assure MORE monthly income when working 11

12 SSI & EARNED INCOME SSI is reduced by Countable Earned Income Basic Deductions that Apply to All SSI recipients: First $65 of earnings are disregarded If $20 General Income Exclusion is not all used on unearned income, apply to earned After deducting $65/$20, remaining earned income is reduced $1 for every $2 What s left is the amount the SSI check is reduced 12

13 Example: Calculation of SSI Income -- Wages of $500 per month $500 Wages - 20 General income exclusion of $20 $ Earned income exclusion $ ½ of remaining earnings ($415/2) $ Total Countable Income $733 Federal Benefit Amount Countable Income $ Total SSI amount with wages of $500 per month 13

14 Example: Comparison Total Income With and Without Wages Total Income Non-working individual living alone Working Individual with $500 monthly wages $733 Federal Benefit Amount $0 Wages $525 SSI amount $500 Wages $733 Total Income $1025 Total Income 14

15 SSI & EARNED INCOME Additional Deductions Student Earned Income Exclusion (SEIE) Impairment Related Work Expenses (IRWE) Blind Work Expenses (BWE) Plan for Achieving Self Support (PASS) 15

16 ADDITIONAL SSI WORK INCENTIVES Student Earned Income Exclusion (SEIE): Students get to keep MORE SSI while WORKING Make $7,200/year of earnings and have NO reduction in SSI (use up to $1,750/month) 2016 If under 22 & regularly attending school In college or university 8 hrs/week Grades 7-12 at least 12 hrs/week Training course to prepare for employment 12 hrs/week, 15 hrs/week if involves shop practice 16

17 WORKING AND TAKING COLLEGE COURSES Work Incentives still apply including being covered under parents insurance 17

18 ADDITIONAL SSI WORK INCENTIVES Impairment Related Work Expenses (IRWE): Keep MORE SSI when paying expenses Out of pocket Related to impairment Expenses that are: Needed to work Can be deducted from earned income 18

19 ADDITIONAL SSI WORK INCENTIVES Blind Work Expenses (BWE): Keep MORE SSI when paying work expenses For individuals determined blind by SSA standards Expenses that are: Out of pocket expenses Related to work (ie., service animals, transportation to/from work, taxes, sensory aids, union due, etc.) Can be deducted from earned income 19

20 SSI/MEDICAID & EARNED INCOME 1619(b) Protection When SSI cash check goes to $0 because of Earned Income -- Pennsylvania Annual Threshold: $36,567 Keep Medicaid and SSI status through 1619b: Earned income reduced SSI to $0, and Need Medicaid to work, and Still experience a disability, and Meet other SSI eligibility requirements, and Earning under threshold (*higher, individualized threshold possible) 20

21 SSDI RECIPIENTS Once people have worked for a while they will often get both an SSI and SSDI check. The SSI check will reduce as the SSDI check increases. These are the perfect beneficiaries for a PLAN FOR ACHIEVING SELF SUPPORT (PASS) 21

22 PLAN FOR ACHIEVING SELF SUPPORT (PASS) A Work Incentive that can help an individual who has work related expenses Set aside income and/or resources, other than SSI In return receive increased SSI, or become eligible for SSDI, to pay for living expenses 22

23 PLAN FOR ACHIEVING SELF SUPPORT (PASS) Funds set aside are used to purchase items/services that help reach a specific work goal Length of PASS based on individual consideration Reduce/eliminate need for SSI/SSDI Support a work goal that reduces SSI or eliminates need for SSDI 23

24 PLAN FOR ACHIEVING SELF SUPPORT (PASS) Funds can be used for work related expenses, such as: Career Planning activities Job search expenses Job coaching School/Training Transportation Equipment Business start-up expenses Dues/subscriptions Attendant care There is NO exhaustive list request what is reasonable and necessary 24

25 IMPLEMENTING PASS Assess if PASS is the right tool PASS analysis Create a plan for completing the application (SSA-545) If currently not eligible for SSI (SSDI only), must apply for SSI as part of the PASS application process. Create a goal date for completing each section Submit application If SSDI only, submit with SSI application SSA office will send to PASS Cadre (you could also send copy in advance) 25

26 PASS CADRE PASS Cadre has responsibility for determining if feasible and viable goal PASS Cadre will approve and monitor or deny PASS application PASS Cadre can be a resource when developing PASS Community Work Incentive Coordinator can help tremendously with this process! 26

27 MONITORING AND AMENDING PASS Beneficiary must: Keep and provide receipts Keep and provide other documents to support progress Keep PASS funds in separate account Amend plan if necessary 27

28 Pass Plans and Braiding Funding 28

29 BRAIDED FUNDING AND MICRO LENDING PASS Funds Grant Funds Regional Center Funds Kane Anderson Micro-Lending Program 29

30 BRAIDED FUNDING AND SELF-EMPLOYMENT History of Wage Employment Grant $$$ PASS Wage Employment Kane Anderson Micro-Loan 30

31 PASS ONLINE RESOURCE University of Montana Rural Institute Cornell University Social Security Administration 31

32 MEDICAID BUY-IN PROGRAMS Medicaid for people with disabilities who work Income and/or Resource rules can be more generous Income limit 250% of federal poverty level = $29,500 Option for high resource limit. $10,000 Option to exclude resources such as retirement accounts, employment related accounts Small premium 5% of countable income (income after Deductions) 32

33 SOCIAL SECURITY DISABILITY INSURANCE: BASICS & WORK INCENTIVES 33

34 WHAT IS SOCIAL SECURITY DISABILITY INSURANCE (SSDI) MEDICAL BENEFITS THAT ACCOMPANY SSDI What is SSDI: Insurance benefit Medicare, after 24 month waiting period What is Medicare? 34

35 SSDI BASIC INFORMATION Entitlement Program Based on FICA contributions Individuals work record (contributions) number of quarters of contribution No standard amount of SSDI cash benefit Increases based on increased contributions and/or annual COLA increases. 35

36 Who is eligible Who is Eligible: Experience a disability Medical criteria Listed impairments Substantial Gainful Activity-SGA criteria Need to have insured status Self (DI) Parent (DAC/DCB) Spouse (DWB) 36

37 SSDI & EARNED INCOME In general, benefit check is all or nothing, based on earnings below or above Substantial Gainful Activity (SGA) $1,130 (2016) based on countable earnings $1,820/month (2016) if blind by SSA criteria See Social Security Red Book 2016 on SSA website Referred to as cash cliff, planning is critical to avoid unexpected loss of income 37

38 SSDI AND EARNED INCOME Phase 1: Trial Work Period (TWP): 9 months to work and earn as much as you want and keep benefit check. Use up a Trial Work month each time earnings are $810/month (2016), or work 80 hr/mo. or more in business if self-employed If use all 9 within 5 year period, move onto next step 38

39 SSDI AND EARNED INCOME Phase 2: Extended Period of Eligibility (EPE): Begins month after 9 th Trial Work month EPE lasts 36 months COUNTABLE earnings COUNTABLE earnings SGA = benefit check SGA = NO benefit check Grace Period: The first month COUNTABLE earnings are ABOVE SGA (after TWP), keep the benefit check that month and the following 2 months, no matter what earning are 39

40 SSDI WORK INCENTIVES DEDUCTIONS FROM EARNED INCOME Wage Employment $ Gross Wages (-) $ IRWE (-) $ Subsidy (=)$ Countable Wages Self Employment $ NESE* (-) $ IRWE (-) $ Unincurred Biz Expense (=) Countable NESE *Gross Wages is earnings before taxes. Count when earned, not when received. *Net Earnings from Self Employment (NESE) = Gross Profit Business Expenses x

41 Impairment Related Work Expenses (IRWE) (I) Expenses that are-- Out of pocket expenses Related to impairment Needed to work Approved amount is deducted from Gross Wages/NESE to determine COUNTABLE earnings Can continue to receive benefits if above SGA because of IRWE 41

42 Impairment Related Work Expenses (IRWE) (II) IRWE EXAMPLE: Expenses: $175/month in medications and counseling services $1,000 Gross Wages $ 175 IRWE (medications and counseling) = $ 825 COUNTABLE Wages After IRWE wages are below SGA so benefit check continues 42

43 ADDITIONAL WORK INCENTIVE DEDUCTION FOR SUBSIDIZED EMPLOYMENT Subsidy/Special Considerations: Maintain benefit check when gross earnings above SGA Extra support received on the job or lower productivity, Which results in receiving more pay than the actual value of services performed, The value of extra support/lower productivity is deducted from gross wages **Unpaid Help & Unincurred Business Expenses are self-employed version of this Work Incentive 43

44 WORK INCENTIVE DEDUCTION FOR SUBSIDIZED EMPLOYMENT SUBSIDY EXAMPLE: LOWER PRODUCTIVITY Assisting 25% fewer customers than other co-workers $1000 (gross wages) -$250 (25%-value of work not performed) =$750 (countable wages, below SGA) After Subsidy wages are below SGA so benefit check continues (Also applies to SSI, but at application ONLY) 44

45 WORK INCENTIVE DEDUCTION FOR SUBSIDIZED EMPLOYMENT SUBSIDY EXAMPLE: VALUE OF JOB COACHING (Requires job coaching to maintain productivity) $1000 (gross wages) -$250 (monthly value of job coaching based on staffing costs ) =$750 (countable wages, below SGA) After Subsidy wages are below SGA so benefit check continues 45

46 SSDI AND EARNED INCOME Phase 3: Expedited Reinstatement (ExR): After EPE, continue to look for SGA COUNTABLE earnings SGA = benefit check BUT-- 1st month COUNTABLE earnings SGA = termination If COUNTABLE wages then drop BELOW SGA within 60 months of termination-- Can request reinstatement of benefits (EXR) Receive up to 6 months of provisional benefits while SSA makes reinstatement decision 46

47 MEDICARE WORK INCENTIVES Maintain Medicare when benefit check stops Continuation of Medicare Coverage (CM) If cash benefits stop due to work, Medicare can continue for at least 93 months(7 years, 9 months) after TWP ends Medicare for People with Disabilities Who Work After CM is exhausted, if cash benefit stop due to work, buy into Medicare/MAWD 47

48 SSDI & EARNED INCOME SUMMARY Work Incentives created to allow a person earning over SGA and maintain check, under certain circumstances: Trial Work Period (time limited) Impairment Related Work Expenses--IRWE Subsidy/Unincurred Business Expenses Grace Period (time limited) 48

49 SSDI & EARNED INCOME SUMMARY Work Incentives created to allow a person to maintain eligibility status or to re-establish eligibility quicker when earning over SGA : Extended Period of Eligibility (maintain eligibility status) Expedited Reinstatement (easier re-entry) 49

50 SSDI & EARNED INCOME SUMMARY Work Incentives created to allow a person to maintain Medicare when not receiving cash check because of earnings: Continuation of Medicare (maintain Medicare) Medicare for People with Disabilities who Work (maintain Medicare) 50

51 SSDI & EARNED INCOME Report earned income by calling and via phone do a work report Receive receipt by mail SSA local office will send Work Activity Report (SSA 820 or SSA 821) at trigger points Provide monthly earnings and work incentive information on these reports Advocate with local office as needed If SSA make decision without taking into account work incentives: Pursue Appeal 51

52 Families and Benefits 52

53 Understanding family financial concerns Distrust of the System Maintaining the Family Home 53

54 How can we help families? Using discovery to figure out benefits issue Working with people and their families to review family need for contributions Determining who will help report income job coach, service coordinator, family 54

55 TOOLS FOR PROVIDING BASIC INFORMATION & REFERRAL 55

56 TOOLS TO PUT THIS INFORMATION TO WORK Information Gathering Worksheet Benefits Planning Query Handbook & Releases PASS Analysis PASS Websites 56

57 FINAL THOUGHTS Use this Information to Help Dispel Myths Collaborate with Community Work Incentive Coordinators (you can t know it all) Help to Spread this New Way of Thinking Begin with Employment Goal, then identify Work Incentive that Support 57

58 Contact Information Corey Smith Senior Consultant, Griffin-Hammis Associates Inc Rachel Pollock Senior Program Advisor, Job Path Inc. 58