Plans to Achieve Self- Support (PASS) Beth Keeton SSI Benefits Supplemental Security Income Important Consideration SSDI and SSI are two completely different programs, governed by entirely different rules and regulations administered by the same agency (SSA) The Center for Social Capital () SSI Basic Info SSI = Supplemental Security Income l Supplements income l Federally established level l Needs-based program l Administered by SSA l FL SSI recipients automatic Medicaid l No separate application required 1
SSI Basic Eligibility Info l To qualify individuals must: l Meet criteria for disability, blindness or be 65 or older, AND l Meet income and resource test, AND l Not be working at SGA at time of application (and not expected to do so in future) SSI Resource Limit l Resource limits l $2000/individual; $3000/couple l Count for establishing AND maintaining SSI l Exclusions include (but aren t limited to): l One house l One car l Burial spaces/funds FBR (Federal Benefit Rate) l Amount established annually l Cash benefit will never exceed FBR l Some states supplement; FL does not l Amount of SSI check will vary based on other income, e.g.: l Earned and/or unearned income l In-kind support l Deemed Income 2012 SSI FBR = $698 2
SSI and Unearned Income (SSDI) l SSI considers all forms of income when calculating monthly cash benefit l Unearned income = income NOT from work!!! l All unearned income, less $20, counts SSI Countable Unearned Income Calculation Step 1: List total unearned income Step 2: Subtract 20 Total Unearned income -$20 = Countable Unearned Income Step 3: Remainder = Countable Unearned Step 4: Subtract countable from FBR Remainder = SSI Cash Benefit SSI Unearned Only Monthly Unearned Income (SSDI) SSI - Benefit Rate 698 Income Calculation Personal Income Unearned Income 0 - General Exclusion 20 Countable Unearned 0 SSI Check Amount 698 SSDI 0 SSI 698 Total 698 SSI & Earned Income l Wage Employment l Gross monthly wages l Report the amount you are PAID each month l Self-Employment l Net Earnings from Self-Employment (NESE) l NESE = (Annual Net Profit/12) x.9235 l Reported to SSI as annual projections 3
SSI and Earnings l SSI cash benefits can be reduced based on income, however l Not all earned income counts by SSI standards l To determine what counts apply a VERY SIMPLE FORMULA (VSF)!!! VSF Pre-Step: Calculate Exclusions General Exclusion: $20 l Applies to recipients with no other source of monthly income Earned Income Exclusion: $65 l Applies to all working recipients Ø Only earned income, $85 Ø Earned and Unearned income, $65 VSF: Steps Things to Remember Step 1: Step 2: Enter Gross Wages or avg. monthly NESE Subtract exclusions l First $65 earned per month not counted by SSI (at a minimum) l Only $1 subtracted for every $2 earned Step 3: Divide by 2 ( countable income) Step 4: Subtract countable income from FBR Remainder = SSI check amount (cash benefit) l Total income when working should NEVER be less than the SSI check alone l Danger for lost money does not come from reporting it comes from NOT reporting income 4
SSI: Basic Wage Example SSI & Medicaid: Section 1619(b) l Medicaid eligibility can continue even after reaching the break-even point if cash benefit lost due to earnings (other req. still apply) l Individual thresholds may be established that exceed the state figure 2012 SD Annual Threshold: $34,014 Medical Assistance for Workers with Disabilities (MAWD) l SD s Medicaid Buy-in Program l Higher income & resource limits than SSI l $8000 in resources l Eligibility rules: l Be employed l Have significant disability l Unearned income less than $694 l http://ftw.sd-ccd.org/disabledpersonsandfamily/ medicalassistanceforworkerswithdisabilitiesmawd/ Property Essential for Self- Support (PESS) l No limit on amount of cash allowed in business account l $2000 limit for personal accounts l PESS expands this to include business equity l Property, equipment, etc. 5
Property Excluded Regardless of Value or Rate of Return l Encompasses property used in a trade or business (effective 5/1/90) l Excludes all business assets, property, cash, etc. from counting against individual resource limits l Business must be in current use l Must be held in separate business account PESS & Owner s Equity l Taxes & SSI countable income based on annual NESE l All NESE attributed to owner for IRS & SSA calculations l Even if not taken as owner s draw l Cash remaining in the account after taxes are paid (and SSI adjustments) is owner s equity SI 01130.500 Property Essential to Self-Support Overview SI 01130.501 Essential Property Excluded Regardless of Value or Rate of Return Owner s Equity, cont. l Not mandatory to withdraw owner s equity l Business owner s frequently leave cash in business to cover emergency or slow periods l Separate line item in cash-flow l Can be withdrawn at any time for personal use can only be taxed once! l Allows for wealth accumulation while maintaining benefits eligibility PESS: Critical Considerations l PESS exclusion does not mean that income doesn t have to be reported l NET PROFIT MUST BE TRACKED AND REPORTED TO BOTH IRS AND SSA!! 6
GRIFFIN- HAMMIS ASSOCIATES, LLC Glen HI VR: $12,000 PASS: $9,000 **PESS EXCLUSION ONLY APPLIES TO RESOURCES OF SOLE-PROPRIETORSHIPS AND PARTNERSHIPS** Gross Sales over $80,000/Year Net Income over $30,000/Year SSI Incentive Programs l Applicable incentives can be utilized to help further reduce countable earned income l Impairment Related Work Expenses (IRWE) l Student Earned Income Exclusion (SEIE) l Plan for Achieving Self-Support (PASS) Impairment-Related Work Expense (IRWE) l Must meet the all of the following criteria: l Paid for by individual l Related to disability l Necessary for work 7
Possible IRWE Expenses l Supported Employment Services l Attendant Care Services l In work setting, helping prepare for work, etc. l At home, not related to work- not IRWE l Medical Devices/Prosthesis l Transportation l Most SE IRWE s are business expenses IRWE Calculation Step 1: List gross wages/avg. monthly NESE Step 2: Subtract exclusions Step 3: Subtract IRWE expenses Step 4: Divide by 2 Cornell University Employment and Disability Institute, Course 1.3 Remainder equals countable income Student Earned Income Exclusion (SEIE) Plan for Achieving Self- Support (PASS) l Applies to SSI recipients who are: l Under age 22 l In school full-time l Annual limits apply for each calendar year in school (could apply in multiple years) l 2012 SEIE l First $1700 earned/month does not count l Up to $6840/year l PASS allows individuals to: l Set aside money for a work goal l Have resources over the asset limit l Maintain Medicaid eligibility l Individuals contribute funds- (not SSI $)!! l SSI benefits can increase to full FBR 8
Possible Sources of Funds for PASS l Earned Income l Wage Employment l Business Income l Unearned Income l SSDI l VA benefits Possible PASS Expenses l PASS funds can be used to pay for: l Business start-up and/or operating expenses l Transportation (including vehicle purchases) l Resource ownership l Employment supports and/or Discovery l Attendant care l Education or training l PASS development fees l And much more! PASS Calculation: Earned Income (Another Very Simple Formula!!) Step 1: Step 2: List Gross Wages/avg. monthly NESE Subtract exclusions Step 3: Divide by 2 Step 4: Subtract PASS contribution PASS: Example 1 (James) James is 24 years old and has been receiving SSI for 6 years (eligible for full FBR of $698). For the past two years, James has sold camping supplies over the internet ($800/month NESE). James recently learned about PASS and wants to use it to purchase his own server & generator (cost approx. $5000). This would allow him to serve more customers, reduce his monthly expenses, and ultimately generate more income. Remainder equals the countable income Based on this information, what are James PASS possibilities???? 9
James: Determine Eligibility for PASS James PASS Analysis l Answer 3 questions: 1. Is James eligible for SSI? 2. Does he have another source of income (besides SSI check)? 3. Does he have a work goal? l If yes to all 3, proceed PASS Calculation: Unearned Income Step 1: List total unearned income Step 2: Subtract 20 Step 3: Subtract PASS contribution Step 4: Remainder = countable income PASS: Example 2 (Natalia) Natalia is 28 years old and has never worked. She has received an SSDI payment of $420 from her father s record since she was 22. She also receives an SSI check of $298. Natalia has wanted a career in clothing design since she graduated from high school, but she has been unable to secure the assistance of either VR or an employment provider to assist her. Based on the information provided above, what are Natalia s PASS possibilities? 10
Natalia: Determine PASS Eligibility Natalia s PASS Analysis 1. Is she eligible for SSI? 2. Does she have an alternative source of income (in addition to SSI)? 3. Does she have a work goal? GRIFFIN- HAMMIS ASSOCIATES, LLC Joe KS DDC: $9,000 KS VR: $4,000 PASS: $12,000 Retroactive PASS PASS can be used retroactively IF: 1. SSI eligible for entire retroactive period 2. Alternative Income for entire retro period Gross Sales over $70,000/Year Net Income over $12,000/Year 3. Been working towards work goal for retro period 4. Incurred expenses related to work goal 11
Analyzing PASS Potential l SSI only: l PASS possible l If business projects profits and/or l If beneficiary has countable income from another job l SSDI only: l PASS possible l Must meet all SSI eligibility criteria except that SSDI income is over the limit l Must be able to cover personal expenses with SSI income (and disregarded earned income, if profits projected) Dual Beneficiary~ Perfect PASS Potential!! Benfits Planning Query l BPQY = Benefits Planning Query l SSAs record that tracks: l Benefits received (SSI, SSDI) l Date of entitlement, disability, cash benefit amounts, rep payee, overpayments, etc. l TWP status, EPE status, work incentive usage l Cannot guarantee an accurate PASS analysis without the BPQY Getting the BPQY l BPQYs free of charge to SSA recipients, CWICs, & VR counselors l Requires 2 signed release of information l Look exactly the same (are the same form), but both must be signed and submitted l Can request from 800# or local rep l Connection with the WIL (Work Incentive Liaison) at SSA office highly recommended About the BPQY l BPQY Handbook l www.disabilitybenefits101.org/documents/ bpqy_handbook.pdf l SSA Release of Information Forms l SSA Consent for Release of Information form (SSA-3288) l Forms are provided with this presentation 12
Completing the PASS Application l Application online at SSA website l http://www.socialsecurity.gov/online/ssa-545.html The PASS Application Parts 1-VIII l Application & examples at: l www.passplan.org l www.passonline.org Part 1: Your Work Goal l Details the work goal, the job duties/tasks, # of hours job coaching required (if any) l Securing a degree is not a goal (it s the means) l Vocational evaluation acceptable goal; use this when PASS will fund Discovery l Provides rationale for the work goal selected l Identifies necessary licenses l Lists projected earnings at PASS completion l Very important to remember point of PASS! Part 1: Your Work Goal l Provides rationale for self-employment (if this is goal) l Must also submit comprehensive business plan l Identifies whether PASS has been submitted/ completed before and whether Ticket has been assigned 13
Part II: Medical/Vocational/ Educational Background l Details relevant background, e.g., l Disabling conditions and limitations l How work goal will allow success given these limitations l Previous related work experience (if any) l Educational level, special trainings, certifications, vocational schooling, etc. l Copy of IWRP or IPE (if any) l Rationale for additional education (if applicable) Part III: Your Plan l Identifies dates PASS will begin and end l Details specific milestones & timelines for PASS goals Step Beginning Date Completion Date Open PASS bank account Jun 2011 Jun 2011 Deposit PASS funds Jun 2011 Dec 2012 Register for fall courses Jul 2011 Jul 2011 Purchase books and other supplies Aug 2011 Aug 2011 Start Fall classes Sept 2011 Dec 2011 Part IV: Expenses l Specific questions for vehicle and computer/ large equipment purchases l Details all items & services that will be purchased with PASS funds l Each must be justified (why necessary) l Expenses linked to PASS contributions l Lists personal expenses l If income is reduced, details how these will be met during PASS Part V: Funding for Work Goal l Identifies individual contribution for work goal l Items they own & will contribute l Personal funds saved l Details other funding sources (if any) l Lists all expected income during PASS l Breaks income down to show what will be contributed to PASS l Again, should be links between total income and PASS contributions, expenses, & timelines 14
Parts VI, VII, and VII l Part VI: Other Contacts l List other people involved in PASS development l Authorizes them to be contacted (or not!) l Part VII: Remarks l Applicant can share any other relevant details or thoughts l Part VIII: Agreement l Must be completed, signed, and submitted Questions? Hooray!! 15