Implications of Work and Earnings on Social Security Disability Insurance

Transcription

1 Implications of Work and Earnings on Social Security Disability Insurance TG Thomas Golden JS James Sheldon TG - Good afternoon, welcome to our first in the Work Incentive Utilization Series. My name is Thomas Golden and I am on faculty with Cornell University s Program on Employment and Disability in the School of Industrial and Labor Relations. You each received electronically today a Power Point File to follow along with and you should have the file opened and in slide slide show mode at this time. Throughout the program today we will advance you through the slides referencing the number in the top right hand corner of each slide. You also received an electronic resource directory that we will be referencing throughout the broadcast today. At this time everyone should be on the title slide which is SLIDE #1. If you would like to take notes during today s program you can do so directly in the Power Point Presentation by clicking on the View button across the top of the screen and scrolling down to Note Pages. By clicking Note Pages you open up both the slide as well as text box in which to type any notes you might like to take while following along. As you will note on SLIDE #2, This series of continuing education distance learning programs has been designed by Cornell University in collaboration with Neighborhood Legal Services, Inc of Buffalo with sponsorship from a grant to the Research Foundation for Mental Hygiene from the U.S. Department of Labor. 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. As referenced on SLIDE #3, joining me today is Jim Sheldon. Jim is a graduate of the University of Buffalo Law School and the Supervising Attorney of the Disability Law Unit at Neighborhood Legal Services in Buffalo, New York. Jim supervises a unit of five attorneys, six paralegals and one research assistant. In addition, he directs 12 separate disability-related projects, including a statewide assistive technology (AT) advocacy project, a national AT advocacy project, five projects related to Social Security and SSI work incentives, and five Protection and Advocacy projects. His most recent work involves funding of assistive technology and Social Security and SSI work incentives. He has also worked extensively with special education, Medicaid, Medicare, vocational rehabilitation, employment discrimination, and rights of persons with disabilities in general. As you can see from this brief overview of his exceptional background, he is well qualified to assist us today in learning more about the disability programs administered by the Social Security Administration Today we are going to be discussing the Social Security Disability Insurance Program, otherwise known as. Today we are going to explore the basics of the program and how work and earnings may affect an individual s benefits and health insurance. During today s call we want to encourage you to forward via any questions that you may have pertaining to the Program. As referenced on SLIDE #4, your questions can be forwarded to tpg3@cornell.edu 1

2 and we will take as many of those questions as possible at the end of today s call. If you don t have you can also call your questions into our toll free line at We will also have a transcript of today s program available and will provide directions for requesting that transcript at the end of the call. So Jim, let s jump right in and get started. As our listeners transition to SLIDE #5, can you explain for us what is and how it is administered? JS - The Social Security Administration (SSA) is a federal agency that administers two benefit programs for people with disabilities known as Supplemental Security Income (SSI) and Social Security Disability Insurance (). We will be discussing the SSI program in more detail in two weeks on our next call. benefits are to individuals, and their dependents, who have been employed and have Social Security taxes. When individuals work, the employees and their employers contribute Social Security taxes that are reflected on their paychecks as FICA or the Federal Insurance Contributions Act. As contributors, individuals and their dependents/family members may receive benefits when they retire, become disabled, or die. Social Security provides benefits as follows: retirement benefits to those 62 or older; dependent benefits to spouses and children of deceased, disabled, or retired workers; and/or, disability benefits to those who cannot perform substantial work and meet SSA disability criteria the latter is what we are going to focus on today. TG - Thanks Jim. Well, from what you shared, it appears clear that how the Social Security Administration defines disability is a key to eligibility for benefits. As our listeners transition to SLIDE #6, can you help us understand a bit better how the Social Security Administration defines disability? JS - The criteria and process used to establish an individual's disability status for initial eligibility is the same for the SSI and. The key to understanding the adult criteria lies in understanding how disability is defined for the adult program. Section 223(d) of the Social Security Act defines the disability requirements for this program in the following manner: "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. An individual is determined to be under a disability only if their physical or mental impairment or impairments are of such severity that they are not only unable to do their previous work but cannot, considering their age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which they live, or whether a specific job vacancy exists for them, or whether they would be hired if they applied for work." Breaking the definition down as we did in SLIDE #7, the basic conditions for the disability requirement include the following: 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 2

3 of $810 for individuals with a disability other than blindness or $1,350 if they are blind in 2004; 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. Our listeners today should remember though that these figures change annually. An online resource link for keeping up with these cost of living adjustments was provided in today s handout. This concept of substantial gainful activity or SGA is interesting Jim. Can you give us a bit more detail? JS - As I discussed earlier Thomas, one of the first things the Social Security Administration looks at is whether or not a person is engaged in SGA. Substantial gainful activity is defined as the performance of significant physical or mental duties for pay or profit and as detailed in SLIDE #8, in 2004 is generally determined to be gross earnings in excess of $810 a month for individual with a disability other than blindness and $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. TG - Jim, I know that SGA was not always indexed. Can you provide us a bit of historical context here? JS - Prior to these changes the $700 SGA level established in July of 1999 was not automatically adjusted annually as was the case for individuals who were blind. In addition, the new rules adjust annually the SGA amount for people with impairments other than blindness. The guideline would be the larger of the previous year's amount or an increased amount based on the Social Security national average wage index. There are several work incentive provisions that can help individuals earning over the SGA level to establish eligibility. Income averaging can possibly result in a current month's wages above SGA being considered non-sga when averaged with previous lower-wage months as well. And we are going to be discussing these work incentives in much greater detail Jim later on this program. Before we do that though Jim, I know that SGA is also a concept applied to ongoing eligibility for as well. Obviously the Social Security Administration is concerned with ongoing eligibility for disability benefits and it is important for our listeners today to also recognize that the Social Security Act includes a requirement that the Administration periodically update records and review the disability status of beneficiaries to ensure that they continue to be disabled and thus eligible for disability payments. These reviews are called Continuing Disability Reviews (CDRs) and apply to persons receiving both as well as SSI. At the point when an individual is determined eligible for disability benefits or at the time of the last full CDR, a date (or diary) for the next review, is established by the State Disability Determination Service Disability Adjudicator. As detailed in SLIDE #9, generally, a CDR can be expected based on classification of disability, namely: 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. 3

4 TG - Sometimes Jim, I know that some beneficiaries are determined to have medically recovered during the CDR process and are mid-stream in participating in a vocational rehabilitation program. Given what you stated earlier it is clear they will lose their benefits in this situation, is their any protection for these individuals? JS - Yes Thomas. Most people know of this protection as Section 301 derived from Section 301 of the Disability Reform Amendments of This was incorporated into Sections 225(b) and 1631(a)(6) of the Social Security Act and as outlined in SLIDE #10, provide for a continuation of SSI and/or respectively to individuals who have medically recovered but who are participating in approved vocational rehabilitation programs. It is important here to note that section 101(b) of the Ticket to Work and Work Incentives Improvement Act of 1999 (P.L ) amends the sections of the Social Security Act referenced above by removing "vocational rehabilitation program" language and replacing it with "a program consisting of the Ticket to Work and Self-Sufficiency Program under section 1148 or another program of vocational rehabilitation services, employment services or other support services." These provisions allow individuals who have medically improved and are no longer considered disabled to continue receiving and SSI benefits if: they are participating in approved vocational rehabilitation programs at the time their disability ceases; and, Social Security has determined that the beneficiaries' continued participation in the vocational rehabilitation programs will increase the likelihood of permanent removal from the disability benefit rolls. To establish eligibility, beneficiaries should work with their claims representatives and vocational rehabilitation counselors. Form SSA-4290 or any individualized rehabilitation plan, such as the Individualized Plan for Employment or Individual Work Plan, will be used to gather the necessary information. Information considered includes: current vocational rehabilitation status; specific vocational objectives; the programs progress toward completion; and when the program will be completed. If SSA determines that continued participation in rehabilitation programs will not increase the likelihood that individuals will be permanently removed from the disability rolls, benefits will be terminated the month following this decision. Additionally, if individuals stop participating in the program for more than 30 days, benefits will cease and will not resume. TG - Clearly Jim, medical recovery is one way in which a person s benefits can be terminated. What about when a person starts working though. Can you walk us through how an individual s benefit may be impacted by work and earnings? JS - Well Thomas, unless medical recovery is an issue, individuals receiving Social Security based on disability are entitled to a nine-month trial work period, known as the. SLIDE #11 details the that provide opportunities to test work skills while maintaining full benefit checks regardless of any income earned. The is a work incentive and can begin as early as the first month that individuals are entitled to benefits or file applications for disability benefits (whichever is later). Effective January 2004, only months during which an individual earns over $580 or works over 80 hours in self-employment are service months and count as months. In 2003, $570, in 2002, $ and in 2001, $530 per month counted as a month. Prior to January 2001, months in which individual earned over $200 a month or worked 4

5 more than 40 hours in self-employment counted as a month. The ends only if individuals have performed nine months t necessarily consecutive) of trial work within a rolling period of 60 consecutive months. months must be carefully tracked; as the 36- month extended period of eligibility () begins immediately after the nine-month. For beneficiaries, SSA counts the gross monthly income earned in the calendar month, rather than what was received, based on pay dates. Individuals are entitled to a for each period of disability. With the most recent rule changes annual increases to- the amount of earnings that can count as a, are linked to the national average wage index. TG - Can you provide us with an example of how the works Jim? JS - On SLIDE #12, we provide an example to illustrate how the rules operates: Mary began collecting benefits in She worked two months in January and February 1997; worked four months in April through July 2001; and worked three more months in October through December Mary has not used up her. As of July 2001, she had worked six months. When she works again in October 2002, we look to see if she now has worked nine months within a 60-month period in this case covering the period November 1997 through October Since the only other months in that period are the four she worked in 2001, October 2002 is the fifth month in her current. After working in November and December 2002, Mary has used up seven months and would have two months left. What if Mary doesn t work again until the late 2003 and then works (and earns at least $560) in November and December 2003? Now Mary has worked nine months within a 60-month period (i.e., April through July 2001; October through December 2002; November and December 2003) and her will be completed. The table below illustrates Mary s within the rolling 60-month period: YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC No s During the year No s During the year No s During the year * ** *** 5

6 Comments: * Sixth month within 60-month period ending 7/01 (i.e., 8/96-7/01). continues. ** A 9 th month, but only 7 th month within 60-month period ending 12/02 (i.e., 1/98-12/02). continues. *** The 9 th month within 60-month period ending 12/03 (i.e., 1/99-12/03), is completed. How long will benefits continue if the Mary finishes her in December 2003 and is earning more than the SGA amount in January 2004? In that case, entitlement to ends three months after the end of the nine-month. The first time the person performs SGA following the, the person will be eligible for three more months of benefits, i.e., the cessation month plus two additional months. This is often referred to as the three-month grace period. In Mary s case, these happen to be the first three months of the. Thus, an beneficiary who goes to work for the first time and earns more than the monthly SGA amount can receive both an check and a paycheck for 12 consecutive months. TG - So Jim, the is like a safety net of sorts. Regardless of the level of their earnings, they will still receive their full benefit check as long as they have not medically-recovered. Based on that obviously there really is no need to use other work incentives during the the is a work incentive itself. So Jim, let s say the ends, then what happens? JS - Well Thomas, as we have outlined in SLIDE #13, at the conclusion of the nine-month, as long as individuals continue to have their original disabling condition, a 36-month Extended Period of Eligibility, known as the, will begin in the month following the ninth month. If individuals are determined to be engaging in SGA, they "cease" eligibility for cash benefits and they will receive full benefit checks for an additional three months (the first month of SGA after the end of (cessation month) and the two following months), and then the cash benefits will stop in any of the remaining months of the when an individual s earnings are over SGA. As discussed earlier, this three-month period is called the "grace period" and may occur at any time after the end of. As I stated earlier, during the, individuals are due payment (disability benefits) for any month they do not work, or when work and earnings fall below the SGA level. During this period, it is not necessary to file a new application for benefits to resume. Social Security cash benefits are during the only for the months in which countable earnings are below the SGA level. TG - Jim, it sounds like consistency and accuracy in reporting to SSA monthly fluctuations in earnings between SGA and non-sga levels is critical in avoiding overpayment or underpayment of Social Security benefits. So Jim, when the 36-month ends, if the beneficiary is engaged in SGA, their benefits will be terminated and their case file closed correct? And can I am assume that this would occur immediately following the or at any point thereafter, depending on when SGA occurs? JS - That s right Thomas. But there are additional work incentives that beneficiaries can use to support their return to work efforts during the. 6

7 TG - You are right Jim. The legislative history pertaining to both the SSI and programs clearly show that Congress expressed a "...desire to provide every opportunity and encouragement to the blind and individuals with disabilities to return to gainful employment." While the Social Security Administration has frequently promoted SSI and as "stepping stones or springboards to employment and greater economic self-sufficiency," reports on employment outcomes for beneficiaries and/or recipients indicate that limited numbers of individuals have actually opted to return to work once disability benefits are awarded. In an effort to encourage employment for beneficiaries, the federal government and the SSA have responded during the past 20 years with legislative and regulatory changes in the SSI and programs. These changes, or work incentives, are aimed at reducing the risks and costs associated with the loss of benefit support and medical services as a result of returning to work. As shown in SLIDE #14, work incentive provisions can help people with disabilities in two significant ways. First, they can help individuals pay for services or items that they need in order to work and to maintain their cash benefits until they are stable in employment. Second, these incentives enable people with disabilities to recover expenses they incur while working towards greater economic self-sufficiency. The goals of the work incentive programs are to assist individuals to achieve gainful employment, increase independence, facilitate empowerment, and acquire self-support. Our listeners today should take note however that a decision by a beneficiary or recipient to work and use the work incentives available to them should involve thorough up-front evaluation and planning to ensure an overall positive impact. First, projections should be made on the immediate effect of the earnings and the work incentives plan on cash benefits and the overall financial situation. Second, the long-term impact of changes in both earnings and work incentive utilization must be investigated. Some very basic questions to be addressed should include the following: What happens if earnings increase or decrease? If the vocational goal is reached, will benefits cease altogether? What will be the impact on medical coverage? Successful utilization of the work incentives and smooth benefit transitions ultimately depend on a cooperative effort between beneficiaries and recipients, families, advocates and the SSA. Proactive communication with the SSA will help to ensure that decisions made regarding employment and work incentive use are based on sound, accurate information and projections. As detailed in your Resource Directory and SLIDE #15, an important resource to assist with this level of benefits planning are the network of Benefits Planning, Assistance and Outreach Projects, or BPA&Os, across New York State and you received a directory of these support programs from across the state in your packet along with contact information of Area Work Incentive Coordinators and Work Incentive Liaisons within the Social Security that can assist in maneuvering return to work under the Program. Another important resource for linking consumers you may be working to other important employment supports that may exist within their community are the Disability Program Navigators throughout New York State that was also provided in your confirmation packet. But before we delve more into those resources Jim, talk to us about generally how work incentives beyond and apply to the Program. JS - As outlined in SLIDE #16, there are work incentives available to individuals who receive Social Security that will allow them to continue receiving cash benefits while they test their ability to work and sustain work. The work incentives are to assist the individual in becoming 7

8 more self-sufficient as they pursue an employment goal. To arrive at the countable earnings used to determine if work is SGA, the dollar amount of Impairment-Related Work Expenses (or IRWEs), special conditions, unincurred business expenses, and subsidies, which have been approved by SSA, are subtracted from the gross monthly earnings. Once the dollar amount of the IRWEs and subsidies are excluded, if countable earnings are below the SGA level, individuals will be eligible for Social Security cash benefits. While the Plan for Achieving Self Support, or PASS, work incentive does not apply to Social Security, many expenses that are for under a PASS also meet criteria for exclusion as an IRWE. These expenses can be counted as a PASS for SSI payment calculation purposes and simultaneously be calculated as an IRWE in the SGA determination for Social Security. TG - Okay Jim, before we retrace our steps here I want to remind folks on SLIDE #17 to their questions regarding today s topic to us here at Cornell at tpg3@cornell.edu or by dialing our toll free number at That s tpg3@cornell.edu or That said and as our listeners transition to SLIDE #18, what is an Impairment-Related Work Expense? JS - The cost of certain impairment-related items and services required by individuals in order to work are deducted from gross earnings in calculating SGA, even if these items and services are also needed for non-work activities. The purpose of the IRWE is to allow Social Security beneficiaries to reduce income below SGA levels until they can work at a level of selfsufficiency, which decreases reliance on benefits. For Social Security beneficiaries, deducting an IRWE may keep monthly gross earnings below SGA, thus enabling them to maintain Social Security eligibility. The cost of IRWE expenses can also be deducted from gross earnings during initial application processes, enabling individuals to meet the SGA requirement. TG - So can you share with us Jim of when an IRWE would be allowed? JS - As outlined on SLIDE #19, for an IRWE deduction to be allowable, a three-part test must be met: 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. The SSA list of allowable expenditures under IRWE is extensive and includes costs of adaptive equipment or specialized devices, attendant care, special transportation costs, as well as the cost of job coach services. Documentation of costs is submitted to the SSA claims representatives who are responsible for making the IRWE determination. Under some circumstances, IRWE payment for durable goods made during the 11-month period preceding the month work started can be deducted. Expenses incurred in a month of work but for after work stopped also can be considered. TG - I see, can you illustrate with an example Jim? JS - Sure Thomas. In the example on SLIDE #20, Marcus is labeled with mental retardation and is receiving $650 per month in benefits. He starts working with gross monthly earnings of $850. Without an IRWE, Marcus' gross wages of $850, because they are greater than the SGA, will ultimately result in loss of his Social Security benefits following completion of his. 8

9 Marcus pays $150 per month for a door-to-door transportation service. He cannot use public transportation due to his severe cognitive limitations. By deducting the cost of the transportation service as an IRWE from his gross monthly wages, his countable income would be below SGA and allow him to sustain his Social Security benefits. The following example illustrates this: Example: IRWE Calculations - Impact on Social Security Benefits STEP ONE Gross ly Earnings $ Minus $ IRWE Equals $ Adjusted Gross Earnings (Non- STEP TW0 Gross Earnings $ Plus $ SSDAC Equals $ ly Income Minus $ IRWE Equals $ Total Usable Income Tom, our listeners should keep in mind that there are three potential uses of an IRWE as we have outlined them in SLIDE #21: to avoid a determination of SGA when a person is applying for benefits; to avoid determination of SGA during a month of the ; and finally, to reduce countable income when calculating the amount of a Supplemental Security Income check. TG - Thanks Jim. Wrapping up on IRWE in SLIDE #22, our listeners should keep in mind that there are no time limits on how long individuals can use the IRWE to pay for particular services or items. This is very beneficial for individuals who have on-going impairment-related work 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, individuals may have a one-time expense, such as a piece of medical equipment. In this case, they may choose to have the expense deducted as an IRWE all in one month or to have the expense pro-rated over a period of 12 months. Pro-rating the expense is particularly helpful if the services or items are costly. This approach can enable individuals to recover a greater amount of the expense over time. The process of establishing an IRWE is easy. 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. Listing each of the criteria with an accompanying explanation of how the expense meets the criteria. The SSA claims representative will review it and make a determination. Jim, as our listeners transition to SLIDE #23, can you give us an example to illustrate application of the and rules when IRWEs are involved? JS - Jennifer is an beneficiary who receives $850 in benefits each month. She is spinal cord injured and uses a wheelchair. It is September 2004 and Jennifer has worked part-time for the past eight months earning $1,050 gross per month as a part-time paralegal. This is her first work as an beneficiary. She pays a driver $200 per 9

10 month to take her to and from work. This is the only way Jennifer can get to work as she does not live on a public transportation route. It has been a struggle the past eight months to leave the home three days each week in her wheelchair. She has badly damaged two of her doorways and her driver has helped to wheel her in and out of her home using two makeshift planks. To allow her to safely leave the home for work without assistance, she has two doorways widened and a ramp constructed at her home at a cost of $4,800 which she will pay in 24 monthly payments of $200 starting in October Jennifer has been able to keep the checks the past eight months, despite her work, because she is still within her nine-month. Will she be able to keep her checks as she moves into her? The answer is yes. As our listeners will note in SLIDE #24, her will start in October 2004 and run through September Since the $200 expense for the home improvement payments and the $200 expense for the driver expenses will qualify as an IRWEs, this combined $400 expense will allow Jennifer to reduce her countable monthly earnings from $1,050 to $650 effective the first month of her. Assuming her wages do not increase, her countable wages will remain well below the SGA level through September The table below illustrates Jennifer s and : YEAR JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Ends Begins * ** New SGA Inquiry 10

11 Comments: * Jennifer is not performing SGA, after deduction for IRWEs ($1, = $650), for period 10/04 9/06. Therefore, benefits will continue. ** Effective 9/06, payments for ramp, etc., have ended. Countable wages, after deduction for IRWEs (transportation only) is now $850 ($1, ) if monthly wage remains the same. If that is below SGA, will continue. If that is more than the 2006 SGA amount, then 10/06 will be Jennifer s benefit termination month and she will get three more months of benefits during her 10/06 12/06 grace period. TG - Thanks Jim. It is so much more helpful to actually see it illustrated like that. Let s shift here a bit Jim and take some time to talk about what Subsidy is. As our listeners transition to SLIDE #25, can you explain the subsidy work incentive to us? JS - Well Thomas, a subsidy is support a person receives on the job, which could result in more pay than the actual value of the services the person performs. Only earnings that represent the real value of the work performed are used to determine SGA. SSA makes a determination of the value of the work, after subsides are subtracted. The dollar amount of subsidies are subtracted from gross monthly earnings during the initial SGA test and ongoing SGA determination process, potentially reducing gross earnings below the SGA level. TG - Jim you talked about different kinds of subsidy that might exist Jim. Can you please highlight some examples? JS - Subsidies exist when employers pay workers more in wages than the reasonable value of the actual services performed. To qualify, individuals must have evidence of receiving subsidies such as extra support, supervision, or documentation of lower productivity compared to unimpaired workers performing the same or similar work. Many times a subsidy will exist because an employer simply pays a person more than the work would justify. An example comes to mind. Gary has a severe learning disability and works as a janitor in a nursing home that is owned by a friend of his father. The employer pays Gary the same amount to other janitors, $9 per hour. Gary s gross pay is $900 per month for 100 hours of work. The employer signs a statement stating that the quality and quantity of Gary s work rate at about 50 percent of the norm for a janitor. The statement goes on to say that Gary s work effort is only worth about $450 if he was based on his work product. Under these circumstances, Gary is getting a subsidy of $450 per month and his countable wages, for SGA purposes, should be $450 per month. As we have provided in SLIDE #26, in developing subsidies, employers are requested by the SSA to submit statements documenting the actual value of workers' services. Subsidies may be either specific or non-specific. In specific subsidies, employers designate a specific dollar amount after calculating the reasonable value of workers' services. In non-specific subsidies, employers are unable to designate a specific dollar amount as the subsidy. The amount of subsidies is determined by comparing the work of individuals in terms of time, skills, and responsibilities with that of non-disabled individuals in similar work. The proportional value of the work must then be estimated according to the prevailing pay scale of this work. SSA makes this determination. 11

12 TG - You used the term earlier, Special Conditions, what does that refer to Jim? JS - As detailed in SLIDE #27, special conditions are items provided by someone other than an employer (e.g. a VR agency, job coach, etc.). A Regional SSA Program Circular, Disability Insurance: "Job Coach Services in Supported Employment," issued in the Philadelphia Region in August of 1989 articulated a great example of how this would work in the case of supported employment. "Job coach services provided to employees is a strong indication that the work is subsidized. If employers cannot furnish a satisfactory explanation identifying specific amounts as subsidies, further contact should be made with the State agency counselor and/or job coach to: compare the time, energies, skills and responsibilities of workers with disabilities with that of unimpaired individuals performing the same or similar work; estimate the proportionate value of services according to the pay scale for this work t according to the job coach's salary); and, determine how frequently the job coaches monitor the individuals and how intensively involved the coaches remain. There may be continuing support being given that is not immediately apparent. Extraordinary development, including precisely tailored questions, may be needed in order to fully document the actual level of subsidy. The monitoring agency usually keeps extensive records of all support activities. Almost uniformly, though, the job coaches will maintain records of time spent, type of support provided, and progress in achieving job independence. These records will be vital when determining subsidies whether it is a monetary one or non-specific (i.e., additional services, special considerations, etc.)." TG - Thanks Jim. What about this concept of Unincurred Business Expense, as our listeners transition to SLIDE #28, can you explain that for us? JS - "Unincurred Business Expense" is SSA's term for self-employment business support that someone else gives to the beneficiary without cost. Examples include: un help; VR buys a computer for your business; unincurred business expenses (e.g., business loss); and/or Soil Bank Payments (farmers). Because someone else is contributing this support, the IRS does not allow the individual to deduct his or her cost for income tax purposes. However, SSA deducts the value of these "expenses" when determining SGA for self-employed individuals. For an item or service to qualify as an unincurred business expense, it must be an item or service that the IRS would allow as a legitimate business expense if the individual for it, and someone else, other than the individual, did pay for it. An example comes to mind involving unincurred business expenses. Maria is a cancer survivor and continues to be eligible for benefits. Despite this ongoing disability, which limits her strength and stamina, Maria has a business doing photography work, doing weddings, school class photos, and individual work. Her husband frequently runs her film (or electronic disks) to a lab for printing and will help her carry equipment for some weddings. The husband is not for this service, which is worth about $300 per month on average. When SSA determines Maria s countable wages, for SGA purposes, the $300 per month in unincurred expenses will qualify as a deduction from countable income. 12

13 TG - So Jim, are there some basic possible indicators that folks should be looking for to demonstrate that possible subsidy exist? JS - Of course Thomas there is not an exhaustive list of possible indicators of subsidies. However, as outlined in SLIDE #29, sheltered employment; childhood disability involvement; mental impairment; marked discrepancy between amount of pay and value of services; claimants or someone else alleges that claimants do not earn their pay; nature and severity of impairment indicates that employees receive help from others in doing the work; and/or, governmentsponsored job training or employment programs could all be potential indicators of possible subsidy. TG - That list Jim serves as good reminder for us as we are initially thinking about who on our client caseload may potentially benefit from this important work incentives. Let s take a look at this next case study in SLIDE #30 to see how subsidy is applied. In this scenario, Edwin currently receives Social Security benefits, is labeled with mental retardation, and has used his nine-month trial work period during a previous period of employment. Therefore, the potential exists for Edwin's Social Security benefit to stop immediately if he begins to earn gross monthly wages over the SGA level. Edwin finds work in private industry through a supported employment agency, which provides job evaluation, training, and support. Edwin earns $6 per hour. During the first month of employment, the job coach works with Edwin eight hours a day, 20 days per month, and provides special transportation funded by the agency worth $55 a month. JS - Well Thomas, the extra training and supervision needed to maintain Edwin's job is a subsidy. An unimpaired employee doing the same job receives only one hour of supervision each day. As outlined in SLIDE #31, the subsidy is computed by multiplying the number of extra hours provided by the job coach (seven hours/day) by Edwin's hourly wage of $6 for a daily subsidy of $42. During the first month Edwin's gross wage of $960 would be reduced by the subsidy of $840 for countable earnings of $120. Since the countable earnings are below SGA, Edwin is not considered to be engaging in SGA, and will therefore be eligible for Social Security in this month. His Social Security will continue for each month that the dollar amount of the subsidy reduces his gross monthly earnings below the SGA level. By the fourth month on the job as you can see in SLIDE #32, Edwin receives assistance from the job coach for five hours per week. He has received a raise to $6.25 per hour based on performance and now pays for the $55 special transportation expense. The gross monthly earnings of $1000 are reduced by the subsidy ($6.25 x 20 hours of job coach intervention) of $125 and the IRWE of $55 for special transportation. Edwin's countable earnings are now $820 per month. As his countable earnings exceed the SGA level he would not receive his Social Security benefit for this month (unless he had not used his grace period up). This example illustrates that the amount of subsidy decreases, as the employee becomes more productive and independent, changing the evaluation of the work from non-sga to SGA. TG - It is easy to see Jim how a person can package these incentives to promote a successful employment outcome. But, lets turn our attention Jim to those who may try their hand at work and are met with less than success. Do any work incentives exist for these individuals? 13

14 JS - One important tool we have detailed in SLIDE #33 is the Unsuccessful Work Attempt, known as UWA. UWAs are work for less than three months that exceeds the guideline, and ends because of the person's disability may not demonstrate that ability to perform SGA. If the SSA considers this work to be an Unsuccessful Work Attempt, the person's benefits are not ceased. If the period of work is between three and six months, it may also represent an unsuccessful attempt to work. In between three and six months, it may also represent an unsuccessful attempt to work. In these situations, however, the person's work must have another factor involved, such as frequent absences or the removal of special circumstances. An unsuccessful work attempt is an effort on the part of a beneficiary to do substantial work (in employment or self-employment), which they stopped or reduced to below the SGA level after six months or less because of one of the following criteria: their disability/impairment; or, removal of special conditions related to their impairment upon which further performance work is required. Social Security will not count earnings during an unsuccessful work attempt when they make an SGA decision for initial SSI or eligibility, or when they decide if disability continues or ceases because of work under the program. TG - That is an important tool to know is out there Jim. Under pre-2001 law as you explained Jim, a person who performed SGA after the would lose benefits. If the person later lost his or her job or had wages reduced below the SGA level, he or she would have to reapply to re-establish eligibility. This prospect of a new application, with the uncertainty of whether a new decision maker would find the individual disabled (especially in light of recent work activity), made many individuals pause at the notion of taking a chance at work that might not be successful in the long term. HOWEVER, the new expedited reinstatement (EXR) program should make more beneficiaries willing to try working, despite a severe disability, knowing they may re-establish eligibility if their work is not sustained because of their impairment(s). Jim, as our listeners transition to SLIDE #34 could you possibly share more with us about this new work incentive? JS - Effective January 2001, a person who performs SGA after the and had his or her benefits terminated and later has wages reduced below SGA levels because of his or her impairment(s) or health condition will be reinstated to, without a new application, if the individual: was eligible for ; lost due to performance of SGA; requests reinstatement within 60 months of the last month of entitlement (the earliest that someone could have had benefits terminated and be eligible for reinstatement is February 1996), or, if the request is filed after 60 months, the individual establishes good cause for missing the 60-month deadline; has a disability that is the same as (or related to) the physical or mental disability that was the basis for their original claim; and, that disability renders the individual incapable of SGA based on application of the medical improvement standard. If an individual believes they meet the EXR criteria, the individual should contact SSA and say that they want to request reinstatement. This includes individuals who, in the last five years (since February 1996), stopped receiving benefits due to SGA and who, since their last month of entitlement, also stopped performing SGA because of their impairment(s) or health condition... SSA has issued policies outlining the criteria and procedures to be followed by local offices. The policies and guidance also include an EXR request form. 14

15 If the beneficiary satisfies the EXR criteria, both their benefits and the benefits of dependents can be reinstated. dependent's benefits, including benefits for dependent children and spouses, can be reinstated if the dependent satisfies all the eligibility criteria as a dependent (this includes having a new medical determination if the dependent's entitlement is based on being disabled.) A previously entitled dependent does not have to file a new application to qualify for reinstated benefits. New dependents will have to file an application to qualify for reinstated benefits. TG - Jim, tell us more about the provisional nature of the benefits a person might receive. JS - While the EXR request is pending, the individual is eligible for up to six consecutive months of provisional benefits. Provisional benefits are payable when EXR is requested. The individual may also be eligible for Medicare coverage while receiving provisional benefits, if not already covered for such benefits. Provisional benefits may be suspended under current rules (e.g., prisoner suspension), and performing SGA will terminate provisional benefits. Early reports are that SSA is processing these requests quickly and individuals have received provisional benefits within weeks of the EXR request. TG - What happens if SSA later determines that the individual was not entitled to reinstatement? Must they repay the provisional benefits received? JS - SSA's policies state that any resulting overpayment cannot be recovered unless SSA determines that the individual knew or should have known that he or she did not meet the EXR criteria. TG - This is great news Jim. Tell me, would someone reinstated still be able to use the existing work incentives again should they want to attempt to try work again? JS - Thomas you know that for years, beneficiaries were told they would get one and one. The and could be exhausted for good at very low levels of earnings. In fact, the could be exhausted whether the person was working or not. This has changed under the new EXR program. After being 24 months (need not be consecutive) of reinstated benefits (including any months for which provisional and retroactive payments were actually received), the beneficiary gets: a new ; a new ; and another 60-month period in which to request EXR if benefits are terminated again due to SGA. The chance for a new and, fortunately, allows the person to work through the peaks and valleys of their continuing disability. TG - Jim, we are running out of time and before we get to questions and answers I want to remind folks on SLIDE #35 to their questions regarding today s topic to us here at Cornell at tpg3@cornell.edu or call us at where our operators will take your call. That s tpg3@cornell.edu or Jim, I want to shift gears one more time because another fear we hear expressed constantly is the fear that beneficiaries have that they will lose their health insurance. Are there any special health insurance provisions we should know about when talking to our consumers? 15

16 JS - As we have outlined in SLIDE #36, Section 202 of the Ticket to Work and Work Incentives Improvement Act (or TWWIIA) further extends Medicare coverage for most beneficiaries who work. Beneficiaries will get an additional 4 1/2 years coverage beyond the current limit (for a total of 8 1/2 years including the ). This incentive became effective October 1, Under this provision, insurance can generally continue for 78 months with the first month of SGA occurring after the 15th of the month of the. This is why under TWWIIA, Medicare coverage extends for at least 93 months (15 months of and 24 months pre-twwiia extension and 4 1/2 years TWWIIA extension). Now Thomas figuring out the exact month the coverage ends is complex given the formula Social Security uses so I strongly suggest practitioners out there work closely with the local SSA Office and/or BPA&O Program. Beneficiaries will be eligible for the extension under TWWIIA if they: are starting to work for the first time since their entitlement; or are in a ; or are in an that began after June 1997; or are in an that began prior to June 1997 and still has premium-free coverage that was not due to terminate until after 9/30/2000, and fraud or similar fault is not an issue. TG - I am familiar with the formula you are discussing Jim and it is complex! In SLIDE #37 we have illustrated in a flowchart just how complicated it actually is. Our listeners should remember though that it is possible for individuals with disabilities to buy into the Medicare program once the extended Medicare coverage is exhausted. Specifically, PL , effective April 1, 1990, provides disabled beneficiaries who are under 65 years of age with the option of purchasing Medicare coverage. They must no longer be entitled to Medicare because of having earnings in excess of the amount and time permitted having exhausted their extended period of Medicare eligibility. Also keep in mind that New York State is fortunate to have a Medicaid Buy-In Program for People with Disabilities that is another option but alas we will discuss that in much greater detail in a subsequent broadcast. Jim, I want to shift us to SLIDE #38 and take some time for the questions that have begun to flood in from across the state QUESTIONS AND ANSWER PERIOD. TG - Well folks, that is all we have time for today and as you transition to SLIDE #39, we want to thank you for taking the time today to be a part of this important distance education program and ask you to take two minutes to complete the training evaluation form you were provided electronically. Individuals seeking a Certificate of Completion at the end of this series and/or Rehabilitation Counselor Continuing Education Re-certification Credits will need to have a program evaluation form on file here in our offices, so please make sure to forward your evaluations to us today. I also want to encourage those of you after our call today that continue to have questions pertaining to how a person s benefits are impacted by returning to work to call our toll free line for technical assistance 24/7. The number for toll free technical support pertaining to work incentives is We have also provided some helpful links in your resource directory we forwarded to you electronically that pertain to the program. Of particular interest are some online brochures available from the Social Security Administration as well as past issues of the New York State newsletter the Benefits Planner. To get a free subscription to this important resource, keeping you up to date on the latest benefits planning 16