RED BOOK ON WORK INCENTIVES A Summary Guide to Social Security and Supplemental Security Income Work Incentives for People With Disabilities Social Security Administration Office of Programs SSA Pub. No. 64-030 August 1995 Developed By: Social Security Administration Office of Disability Office of Supplemental Security Income Additional copies of this booklet may be requested through the Social Security Administration Regional Offices (listed in the back of this booklet). Formatted by the Braille Services Staff 1-A-19 Operations Building Social Security Administration 6401 Security Blvd. Baltimore, Maryland 21235 Phone: (410) 965-6414 TABLE OF CONTENTS INTRODUCTION TO WORK INCENTIVES FOR PEOPLE WITH DISABILITIES Page 1 SSDI AND SSI PROGRAM INFORMATION Page 2 Eligibility Requirements Page 4 How We Figure Payment Amounts Page 5 Waiting Period Page 6 Medicare Qualifying Period--SSDI Only Page 6 Substantial Gainful Activity Page 6 When We Review a Disability Case Page 7 OVERVIEW OF WORK INCENTIVES Page 8 SSDI AND SSI WORK INCENTIVES Page 9 Impairment-Related Work Expenses Page 13 Subsidies Page 14 Continued Payment Under a Vocational Rehabilitation Program Page 15 SSDI WORK INCENTIVES Page 16 Trial Work Period Page 16 Extended Period of Eligibility Page 17 Continuation of Medicare Coverage Page 19 Medicare for People With Disabilities Who Work Page 20 SSI WORK INCENTIVES Page 21 Earned Income Exclusion Page 21 Student Earned Income Exclusion Page 22 Plan for Achieving Self-Support Page 23 Property Essential to Self-Support Page 24 Section 1619 Work Incentives Page 25 Special SSI Payments for People Who Work (Section 1619(a)) Page 25 Continued Medicaid Eligibility (Section 1619(b)) Page 25 Special Benefits for Section 1619 Recipients Who Enter a Medicaid Facility Page 26 Reinstating Eligibility Without a New Application Page 2643 SPECIAL RULES FOR PEOPLE WHO ARE BLIND Page 27 How SGA is Applied to Persons Who Are Blind Page 27 Blind Work Expenses Page 28 Special Services Provided Page 30 GLOSSARY Page 31 ADDRESSES OF SOCIAL SECURITY ADMINISTRATION REGIONAL OFFICES Page 33 INTRODUCTION TO WORK INCENTIVES FOR PEOPLE WITH DISABILITIES SSDI, SSI Reason for this booklet One of the Social Security Administration's highest priorities is to help beneficiaries with booklet disabilities achieve a better and more independent lifestyle by helping them take advantage of employment opportunities. The President has stated, "We believe that all persons with disabilities must be fully integrated into mainstream society, so they can live fulfilling and rewarding lives. During our years in public office, we have compiled strong records of support for public and private initiatives to enhance the independence and productivity of persons with disabilities." We at Social Security take these words very seriously and intend to do our part to remove the barriers which exist that prevent this goal from being achieved. The enactment of the Americans With Disabilities Act (ADA) is a major step in the continued progress toward full empowerment for people with disabilities. Our mission to encourage employment and productivity is in keeping with the mandate provided by the ADA and other significant legislation such as the Rehabilitation Act and the Developmental Disabilities Assistance and Bill of Rights Act. This booklet was prepared to assist professionals in the public and private sectors who work with people with disabilities. Your role as counselor, educator, representative or advocate provides you with communication opportunities not directly available to Social Security staff. By becoming familiar with the work incentive provisions in this booklet, you can help people with disabilities and their families make important decisions about employment. This booklet is a guide to help you understand our work incentives. It is not intended to be used in making determinations about eligibility or benefits in particular cases. A person who needs information on a particular case should contact the local Social Security office. Background The Social Security Administration directs two disability programs: Social Security Disability Insurance (SSDI); and Supplemental Security Income (SSI). SSDI, SSI These programs are similar in many respects but also have important differences, some of which are explained later in this booklet. Purpose of work incentives The SSDI and SSI programs should not be viewed as exclusive and permanent sources of income to the person with disabilities. They should, in every case possible, be used as stepping stones to improving a person's economic condition. Work incentives are intended to give beneficiaries the support they need to move from benefit dependency to self-sufficiency. The work incentives explained in this booklet are designed to help people with disabilities enter or reenter the workforce by protecting their entitlement to cash payments and/or Medicaid or Medicare protection, until they can support themselves. Organization of this booklet Because some people receive both SSDI and SSI payments and others receive only this booklet SSDI or SSI, the information in this booklet is grouped into the following six sections: General SSDI and SSI program information; An overview of SSDI and SSI work incentives; Work incentives that apply to both programs; SSDI only work incentives; SSI only work incentives; and Special work incentives for beneficiaries who are blind. To help you identify and apply each work incentive, the top right-hand corner of this page explaining each incentive is labeled to show the program(s) to which the incentive applies. Replacement of previous publication This booklet replaces and obsoletes all previous editions and previous publication SSDI AND SSI PROGRAM INFORMATION ELIGIBILITY REQUIREMENTS This section gives basic information about the SSDI and SSI programs so you can better understand how the work incentives apply. The specific provisions cited here are not work incentives. SSDI SSI SSDI To be eligible for SSDI, a person must: Have worked and paid Social Security taxes (F.I.C.A.) for enough years to be covered under Social Security; some of the taxes must have been paid in recent years; Be considered medically disabled; and Not be working or working but earning less than the substantial gainful activity (SGA) level. SSI To be eligible for SSI based on a medical condition, a person must: Have little or no income or resources (refer to the Glossary for definitions of income and resources); Be considered medically disabled; and Initially not be working or working but earning less than the SGA level. Once on the rolls, work activity does not affect a person's continuing eligibility. Work activity does not affect initial or continuing eligibility for a person who is blind. SSDI, SSI HOW WE FIGURE PAYMENT AMOUNTS SSDI The SSDI payment amount is based on a worker's lifetime average earnings covered by Social Security. The payment amount may be reduced by workers' compensation payments (including Black Lung payments) and/or public disability benefits (e.g., certain state and civil service disability benefits). It is not affected by other income or resources. SSI The SSI payment amount is based on the amount of other income which the person receives, his or her living arrangement and the state in which he or she lives. The basic payment is known as the Federal Benefit Rate. The Federal Benefit Rate is adjusted each year to compensate for cost-of-living increases. Most states pay an additional amount known as a State supplement. The amount and qualifications for these supplements vary from state to state. To figure the SSI payment amount, we add the Federal Benefit Rate and the State supplement and then subtract the person's countable income. (See page 35.) Countable income includes income received by the person or some income received by the person's spouse or parent(s). Once a child turns age 18, the parents' income and resources are no longer considered in determining the child's eligibility or payment amount. Not all income that a person receives is counted. For example, any part of a scholarship or grant that is used to pay for tuition, books, fees or related educational expenses is not counted. The sections on work incentives explain some of the ways that income can be excluded. SSDI, SSI WAITING PERIOD SSDI A worker who becomes disabled must wait 5 full calendar months after disability begins before receiving SSDI benefits. No new waiting period is required, if a worker returns to the disability rolls within 5 years of leaving the rolls. NOTE: Children, widows, and widowers are subject to different rules. SSI No waiting period is required before receiving SSI benefits. SSDI MEDICARE QUALIFYING PERIOD-SSDI ONLY What it is The first 24 months of disability benefit entitlement is the waiting period for Medicare coverage. During this qualifying period for Medicare, an SSDI beneficiary may be eligible for health insurance through a former employer. The beneficiary should contact the employer for information about health insurance coverage. How months are counted One month is counted for each month of disability benefit entitlement counted. When previous periods count Months in previous periods of disability may be counted towards the 24-month Medicare periods count qualifying period if the new disability begins: Within 60 months after the termination of the workers receiving disability benefits; or Within 84 months after the termination of disabled widows' or widowers' benefits or childhood disability benefits; or At any time if the current disabling impairment is the same as, or directly related to, the impairment which was the basis for the previous period of disability benefit entitlement. (This provision applies to beneficiaries whose prior period of entitlement to disability ended after February 29, 1988.) SSDI, SSI SUBSTANTIAL GAINFUL ACTIVITY What it is SGA is the performance of significant and productive physical or mental work for pay or profit. How much it is The SGA level is average countable earnings over $500 per month for non-blind beneficiaries. (See page 45 for the blind SGA amount.) We will deduct from gross earnings the cost of items a person needs in order to work and the value of support a person needs on the job due to the impairment before we decide if work is SGA. How it applies SSDI It applies to SSDI in determining initial and continuing disability entitlement. SSI It applies to SSI only in determining initial eligibility for SSI disability payments. It does not apply to SSI beneficiaries who are blind. SSDI, SSI WHEN WE REVIEW A DISABILITY CASE How often reviews are done We review a disability case periodically to see if a person's condition has medically improved or if he/she can perform SGA. The timing of these reviews is described below: When the original disabling condition is expected to improve, we review the case on or about the date the improvement is expected; When medical improvement is possible, we review the case after 3 years; When medical improvement is not expected, we review the case after 7 years; When we receive information that the person may have returned to work or appears to have improved, we review the case at the time we receive the information; or When an SSI recipient becomes eligible for benefits under section 1619 or when there are changes in the 1619 status, we review the case at the time of eligibility or but not more often than once a year. If we find the person is no longer disabled because of medical improvement related to the ability to work, we stop benefits unless he or she is in a vocational rehabilitation program. (See"Continued Payment to Individuals Under a Vocational Rehabilitation Program" on page 24.) DDSI OVERVIEW OF WORK INCENTIVES How they help people Most people with disabilities want to work. It is important for disability beneficiaries to people understand that they can still receive benefits while they try to work. Anyone who represents or deals with working SSDI or SSI beneficiaries should encourage them to contact the Social Security Administration and ask about work incentives and how they can affect their benefits. SSDI Work incentives provide support over a period of years to allow the disability beneficiary to test the ability to work and gradually become self-supporting and independent. In general, a person has at least 4 years to test the ability to work, including full cash payments during the first 12 months and a period in which cash benefits can be started again without a new application. The person continues to have Medicare coverage during this time. The SSDI work incentives are: Impairment-Related Work Expenses; Trial Work Period; Extended Period of Eligibility; Continuation of Medicare Coverage; Medicare for People With Disabilities Who Work; and Continued Payment Under a Vocational Rehabilitation Program. Each work incentive is discussed in detail later in this booklet. While the above information gives you an idea of some of the support offered to SSDI beneficiaries who want to work, it is important to view all of the work incentives as a total package to fully appreciate the level of support offered to help people achieve their goal of greater economic independence. SSI SSI Over 4.4 million Americans receive SSI because of a disability. Many of these people would like to work but are afraid that if they do, they will lose their SSI checks and Medicaid coverage. The SSI work incentives offer these people ways to continue receiving their SSI checks and/or Medicaid coverage while they work. Some of the incentives can increase their net income to help cover special expenses they may have in order to work, to train for a job or to set up their own business. Once a person begins to receive SSI, work activity will not cause SSI to stop as long as the person is still disabled. Even if the person cannot receive SSI checks because of the amount of earnings, eligibility for Medicaid may continue indefinitely. In many cases, if a person loses his/her job or is unable to continue working, he/she can begin receiving checks again without filing a new application. The SSI work incentives are: Impairment-Related Work Expenses; Earned Income Exclusion; Student Earned Income Exclusion; Blind Work Expenses; Plan for Achieving Self-Support (PASS); Property Essential to Self-Support; Section 1619 Work Incentives; and Continued Payment Under a Vocational Rehabilitation Program. Each provision is discussed in detail later in this booklet. These incentives offer persons who receive SSI because of disability an opportunity to overcome some of the barriers that may have kept them from working. SSDI SSI SSDI AND SSI WORK INCENTIVES What they are The costs of certain impairment-related items and services that a person needs to work are deducted from gross earnings in figuring SGA, even if these items and services are also needed for non-work activities. The deductions can be made only if: The cost of the item or service is paid by the person with the disability; and The person has not been, and will not be, reimbursed for the expense. How they are deducted The amount a person pays towards the cost of the items and services is deducted from deducted gross earnings. Only after these expenses are deducted is a determination made as to whether "countable earnings" represent SGA. Impairment-related work expenses may reduce earnings below the SGA level. How they apply to SSI monthly payments Impairment-related work expenses are also excluded from earned income in figuring an SSI. SSI monthly beneficiary's monthly payment amount. Who determines whether expenses are deducted The Social Security Administration field office determines whether expenses may be whether expensesdeducted from earnings. In making this determination, the field office may: Request the beneficiary or the representative to verify the need for an impairment-related work expense (this may be done by telephone or in writing); and Ask a beneficiary or representative if: The item/service is related to the impairment and is necessary to enable the person to perform his or her job; The person is personally paying for this item/service (and to submit proof(s); and Some other source is paying for the item/service, and how long that funding will continue. SSDI, SSI When expenses are deductible Impairment-related work expenses are deductible for both SGA and SSI payment deductible purposes when: The expense enables a person to work; The person, because of a severe physical or mental impairment, needs the item or service for which the expense is incurred in order to work; The cost is paid by the person with a disability and is not reimbursed by another source (e.g., Medicare, Medicaid, private insurance); The expense is "reasonable" that is, it represents the standard charge for the item or service in the person's community; The expense (for SGA purposes) is paid in a month in which the person with a disability is or was working (occasionally, an impairment-related work expense may be used before the first or after the last month of work activity); and The expense (for SSI payment purposes) is paid in a month in which earned income is received or work is performed while the person used the impairment-related item or service. (In unusual situations, when the payment of an impairment-related work expense does not correspond to a work month, it may be possible to deduct it.) SSDI, SSI EXAMPLES OF EXPENSES LIKELY AND NOT LIKELY TO BE DEDUCTIBLE 1. Attendant Care Services a. Performed in the work setting. b. Performed in the process of assisting in preparing for work, the trip to and from work and after work (e.g.,bathing, dressing, cooking, eating, etc.). c. Services which incidentally also benefit the family (e.g., meals shared by the individual and his/her family). d. Services performed by a family member for a cash fee where the family member suffers an economic loss by reducing or terminating work in order to perform such services. 2. Transportation Costs a. The cost of structural or operational modifications to a vehicle which the person needs in order to drive to work, even if the vehicle is also usedfor non-work purposes. b. The cost of driver assistance or taxicabs where such special transportation is not generally required by unimpaired individuals in the community. c. Milage expenses for an approved vehicle at a rate determined by the Social Security Administration and limited to travel related to employment. 3. Medical Devices a. Wheelchairs, hemodialysis equipment, pacemakers, respirators, traction equipment and braces (arm, leg, neck, back, etc.). 4. Work-Related Equipment and Assistants a. One-handed typewriters, typing aids(e.g., page-turning devices), measuring instruments, reading aids for persons who have visual impairments, electronic visual aids, braille devices, telecommunications devices for people with hearing impairments and special work tools. b. Expenses for a person who serves as a reader for a visually impaired person, expenses for an interpreter for a hearing impaired person and expenses for a job coach. 5. Prosthesis a. Artificial hip and artificial replacement of an arm, leg or other parts of the body. 6. Residential Modifications a. Individual Employed Outside Home (1) Modifications to the exterior of the house which permit access to the street or to transportation (e.g., exterior ramps, railings, pathways, etc.). b. Individual Self-Employed at Home (1) Modifications made inside the home in order to create a work space to accommodate an impairment (e.g., enlargement of a doorway leading into an office or workroom, the modification of office space to accommodate problems in dexterity, etc.). 7. Routine Drugs and Routine Medical Services a. Regularly prescribed Medical treatment or therapy that is necessary to control a disabling condition (even if unsuccessful), such as anti-convulsant drugs or blood level monitoring; radiation treatment or chemotherapy; corrective surgery for spinal disorders; anti-depressant medication, etc. The physician's fee relating to these services is deductible. 8. Diagnostic Procedure a. Objective of procedure must be related to the control, treatment or evaluation of a disabling condition (e=.g., electroencephalograms, brain scans, etc.). 9. Non-Medical Appliances and Devices a. In unusual circumstances, when devices or appliances are essential for the control of a disabling condition either at home or in the work setting (e.g., an electric air cleaner for an individual with severe respiratory disease), and this need is verified by a physician. 10. Other items and Services a. Medical supplies of an expendable nature ( e.g., incontinence pads, elastic stockings, catheters, etc.). b. The cost of a guide dog including food, licenses and veterinary services. NOT DEDUCTIBLE 1. Attendant Care Services a. Performed on non-workdays or involving shopping or general homemaking (e.g., cleaning, laundry, etc.). b. Performed for someone in the family other than the beneficiary (e.g., babysitting). c. Services performed by a family member for a cash fee where the family member suffers no economic loss. d. Services performed by a family member for payment "in-kind" (e.g., room and board) whether or not the family member suffers economic loss. 2. Transportation Costs a. The cost of a vehicle whether modified or not. b. The cost of modification to a vehicle not directly related to the impairment or critical to the operation of the vehicle (e.g., paint or decor preferences). c. The cost of travel related to obtaining medical items or services. 3. Medical Devices a. Any device not used for a medical purpose. 4. Work-Related Equipment and Assistants a. Any work-related device not paid for by the person with a disability or, in the case of a self-employed individual, equipment previously deducted as a business expense. 5. Prosthesis a. Any prosthetic device that is primarily for cosmetic purposes. 6. Residential Modifications a. Individual Employed Outside Home (1) Modifications to the house primarily intended to facilitate functioning in the home environment (e.g., enlargement of interior door frames, lowering of kitchen appliances and bathroom facilities, interior railings, stairway chairlift, etc.). b. Individual Self-Employed at Home (1) Any modification expenses previously deducted as a business expense in determining SGA. 7. Routine Drugs and Routine Medical Services a. Drugs and/or medical services used for only minor physical or mental problems (e.g., routine physical examinations, allergy treatment, dental examinations, optician services, etc.). 8. Diagnostic Procedures a. Procedures paid for by other sources (e.g., Vocational Rehabilitation Agency, Medicaid) or not related to a disabling condition (e.g., allergy testing). 9. Non-Medical Appliances and Devices a. Devices used at home or at the office which are not ordinarily for medical purposes (e.g., portable room heaters, air conditioners, dehumidifiers, humidifiers, etc.) and for which the individual has no verified medical work-related need. 10. Other Items and Services a. An exercise bicycle or other device used for physical fitness unless verified as necessary by a physician. SSDI SSI SUBSIDIES What it is 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. We deduct the value of subsidies when we determine SGA. Subsidies do not reduce countable income for SSI. How it applies Some workers with disabilities are not yet able to do a job as well as non-impaired workers without receiving some form of subsidy or work support. Examples of subsidies are: Giving the worker with a disability more supervision than other workers doing the same or a similar job for the same pay; and/or Giving the worker with a disability fewer or simpler tasks to complete than other workers doing the same job for the same pay. Only earnings that represent the real value of the work performed are used to determine if work is at the SGA level. If an employer has difficulty setting the real value of the work and/or the amount of the subsidy, the Social Security Administration will make a determination of the value of the work. CONTINUED PAYMENT UNDER A VOCATIONAL REHABILITATION PROGRAM To whom it applies It applies to persons who are receiving SSDI or SSI benefits who improve medically and, therefore, are no longer considered disabled by the Social Security Administration. What it does SSDI and SSI benefits will continue if, at the time disability medically ceases: The person is actively participating in an approved state or (effective November 1, 1991) an approved non-state public or private vocational rehabilitation program; and NOTE: Active participation is considered to be the receipt of services for counseling, guidance, physical and mental restoration, and/or training under an approved written rehabilitation plan. Completion or continuation of the program is likely to enable the person to work permanently. How long benefits Cash payments and health insurance continue until the rehabilitation services are completed continue or until the person ceases to participate in the program. Who makes the The Social Security Administration, with the aid of vocational rehabilitation information, decision determines eligibility for continued payments, based on the criterion that the person's participation in the vocational rehabilitation program will increase the likelihood of permanent self-sufficiency and independence from the disability rolls. SSDI WORK INCENTIVES TRIAL WORK PERIOD How it helps Many people with disabilities would like to work but are afraid to try because of people concern that their benefits might stop. The trial work period lets people test their ability to work or run a business for at least 9 months in spite of their disability, without affecting their disability benefits. They continue to get full benefits during the trial work period no matter how much they earn. Entitlement to a trial work period begins with the month in which the worker with a disability becomes entitled to disability benefits or the month in which the application is filed, whichever is later. (A person is not entitled to a trial work period if he or she is not entitled to disability benefits. A person is not entitled to disability benefits if he or she performs SGA level work within 12 months of onset of the impairment(s) which caused work to stop and before an award of disability benefits.) Each month in which earnings are more than $200 (or over $200 in net earnings or more as a trial work than 40 hours of work in a month for the self-employed) is counted as a month of the trial period. When the beneficiary has accumulated 9 such months (not necessarily consecutive) within a 60-month rolling period, the trial work period is completed. Effective January 1, 1992: A person will not use up his/her trial work period unless the 9 trial work months are completed within a rolling 60-month period; and A person will get a new trial work period every time he/she becomes re-entitled to a new period of disability based on a new application. What happens After the trial work period, the Social Security Administration reviews the work. SGA after it is earnings during or after the trial work period normally indicate that the beneficiary is able to completed work in spite of a disabling impairment (see page 9 for a discussion of SGA): If the work is not SGA, SSDI benefits continue; or If the work is SGA, cash benefits continue for 3 more months (this is known as the "grace period"), then they stop. The person is now in the extended period of eligibility. SSDI EXTENDED PERIOD OF ELIGIBILITY What it is The extended period of eligibility is a consecutive 36-month period during which cash benefits will be reinstated for any month the person does not work at the SGA level. Benefit checks can be started again without a new application, disability determination or waiting period. This reinstatement of benefits saves critical time for the beneficiary and replaces the loss of earnings. When it begins The extended period of eligibility begins the month following the end of the trial work period. NOTE: Benefits can be reinstated within the 36-month period. However, benefits may be paid for an even longer period of time if a person is unable to perform SGA. How it helps people The extended period of eligibility reassures the beneficiary that disability benefits can be paid after the trial work period if he/she is unable to perform SGA anytime during the 36 months. EXAMPLES Example 1 Mr. Ray has been working at the local toy factory despite his arthritis. His 9th month of trial work was December 1987. The field office evaluated his work and found that he was performing SGA; eligibility for disability payments ceased in January 1988. He continued to earn above the SGA level through April 1988. (During this period, the Disability Determination Services made a medical severity determination and decided that Mr. Ray's impairment was still disabling.) After Easter, orders dropped off and Mr. Ray was laid off. The field office found that he did not perform SGA in May 1988 through August 1988 (inclusive). SSDI With the development of the Turnip Patch Doll, orders picked up, and Mr. Ray went back to full-time work. He performed SGA from September 1988 through December 1988 (inclusive). Mr. Ray's arthritis got worse, and from January 1989 through April 1989 (inclusive) he worked part-time, not performing SGA. In May 1989, feeling better, he went back to full-time work. His earnings have been above the SGA level ever since. Question: What was the first month of his extended period of eligibility? Answer: January 1988 (the first month immediately following the completion of the 9th month of trial work). Question: If Mr. Ray's earnings continue to be above the SGA level, what will be the last month of his extended period of eligibility? Answer: December 1990 (the month before the first month of SGA after the 36th month). Question: What were the extended period of eligibility months for which he could potentially be paid? Answer: January 1988, February 1988, March 1988 (the grace period), May 1988 through August 1988 and January 1989 through April 1989 (non-SGA months). SSDI Example 2 Mrs. Bell began receiving SSDI benefits in January 1982. She returned to work in April 1986. Her trial work period ended in December 1986. In January 1987, the field office evaluated her work and determined it not to be SGA and disability payments continued. Mrs. Bell continued to work at the non-SGA level until August 31, 1990. She then obtained a new position in which she earned above the SGA level. In October 1990, the field office made a determination that based on her work activity she no longer was eligible for disability payments as of September 1990. Question: What was the first month of her extended period of eligibility? Answer: January 1987 (the first month immediately following the completion of the 9th trial work service month). Question: What is the last month of her extended period of eligibility? Answer: November 1990 (the second month following the month in which the person's eligibility for disability payments ceases because of work activity). Question: What are the extended period of eligibility months for which she could potentially be paid? Answer: January 1987 through November 1990; i.e., all non-SGA months during the extended period of eligibility as well as the month of cessation and the following 2 months (grace period). The extended period of eligibility would terminate effective December 1990. SSDI CONTINUATION OF MEDICARE COVERAGE What it does SSDI beneficiaries can receive at least 39 months of hospital and medical insurance after the trial work period. This provision allows health insurance to continue when a person goes to work and is engaging in SGA. How it helps people Although cash benefits may cease due to work, the beneficiary has the assurance of continued health insurance. EXAMPLES Example 1 John Smith had been entitled to Medicare since May 1987, his 25th month of disability insurance entitlement. Although he continued to have a severe impairment, he completed a trial work period on September 30, 1988 (his 9th trial work period month). If he continues working over the SGA level ($500 a month) throughout the extended period of eligibility (the 36-month period after the trial work period ends), his entitlement will continue through September 30, 1991. His Medicare will continue through December 31, 1991 (39 months after the trial work period ends), unless he medically recovers prior to that time. The time line below depicts the major events in John Smith's Medicare coverage. Other work incentives must be reviewed in order to understand the total support offered to him. NOTE: The time lines below are not convertible to disk. For further information on content of these time lines, please contact your local Social Security Office. Example 2 Mary Jackson was entitled to disabled widows benefits beginning June 1986. She completed a trial work period February 1988. If she continues to engage in SGA, her extended period of eligibility will end February 1991 (36 months after the trial work period ended). Although she had only served 21 months of her Medicare waiting period (24 months are required) by the time she completed her trial work period, her disabled widow's benefit entitlement will continue for 36 months during her extended period of eligibility. The months in the extended period of eligibility will continue to count toward her Medicare qualifying period. Thus, her Medicare coverage will begin June 1988, the fourth month of her extended period of eligibility. If her medical condition remains disabling, Mrs. Jackson's Medicare entitlement will end in May 1991, 3 months after her extended period of eligibility ends. As can be seen from the time line below, Mrs. Jackson received her Medicare benefits due to the extended period of eligibility work incentives. Mrs. Jackson continues to receive the support she needs in her work attempt. The time line below depicts Mary Jackson's Medicare coverage and the work incentives support she received (trial work period and extended period of eligibility).See above time line note. SSDI MEDICARE FOR PEOPLE WITH DISABILITIES WHO WORK What it is Certain people who have returned to work may purchase continued Medicare coverage, after premium-free Medicare coverage ends, due to work as long as he/she remains medically disabled. If the person becomes medically disabled again within 5 years (7 years for widow(ers) and disabled adult children) after the prior period of disability ends, he/she does not have to serve another 5-month waiting period to get benefits or Medicare. Who is eligible Anyone who: Is not yet 65; and Continues to have a disabling impairment; and Whose Medicare stopped due to work. The kind of Medicare that can be purchased Premium Hospital Insurance (HI Part A) can be purchased at the same monthly cost which uninsured eligible retired beneficiaries pay; or Premium Supplemental Medical Insurance (SMI Part B) can be purchased at the same monthly cost which uninsured eligible retired beneficiaries pay; or Hospital Insurance can be purchased separately without Supplemental Medical Insurance, but Supplemental Medical Insurance can only be purchased if Hospital Insurance is also purchased. The enrollment period An individual may enroll: During his or her initial enrollment period; During the annual general enrollment period (January 1 thru March 31 of each year); or During a special enrollment period if covered under an employer group health plan. SSDI When the state pays premiums States are required to pay Hospital Insurance premiums for qualified working individuals pays premiums with disabilities. Qualified individuals are those who: Are eligible to enroll in premium Hospital Insurance for people with disabilities who work; Meet certain income and resource standards; and Are ineligible for Medicare on any other basis. NOTE: Workers who are disabled should contact their respective State agency for information. SSI WORK INCENTIVES SSI EARNED INCOME EXCLUSION What it does This provision allows most of a person's earned income, including pay received in a sheltered workshop or work activities center, to be excluded when figuring the SSI payment amount. The Social Security Administration excludes the first $65 of earnings in a month plus one-half of the remainder. This means that less than one-half of a person's earnings are counted when figuring his/her SSI payment amount. This exclusion is applied in addition to the $20 general income exclusion. Examples The following examples show how the earned income exclusion is advantageous to the beneficiary. In Example 1, the person receives $161 SSDI each month; in Example 2, the person receives wages of $161 per month. EXAMPLE 1 $161 (SSDI) subtract $20 (General income exclusion) total $141 (Countable income) $458 (1995 Federal Benefit Rate) subtract $141 (Countable income) totals $317 ( SSI payment) AVAILABLE INCOME $161 (SSDI) plus $317 (SSI) totals $478 (TOTAL INCOME) EXAMPLE 2 $161 (Earned income) subtract $20 (General income exclusion) total $141 subtract $65 ($65 earned income exclusion) total $76 divide by 2 (1/2 remaining earnings) totals $38 (Countable income) $458 (1995 Federal Benefit Rate) subtract $38 (Countable income) totals $420 (SSI payment) AVAILABLE INCOME $161 (Earned income) plus $420 (SSI) totals $581 (Total income) SSI STUDENT EARNED INCOME EXCLUSION What it does It allows a person who is under age 22 and regularly attending school to exclude up to $400 of earned income per month. The maximum annual exclusion is $1,620. Definition of "regularly attending school" "Regularly attending school" means that the person takes one or more courses of study and "regularly attends classes: In a college or university for at least 8 hours a week; or In grades 7-12 for at least 12 hours a week; or In a training course to prepare for employment for at least 12 hours a week (15 hours a week if the course involves shop practice); or For less time than indicated above for reasons beyond the student's control, such as illness. A person who is home taught because of a disability may be "regularly attending school" by: Studying a course or courses given by a school (grades 7-12), college, university or government agency; and Having a home visitor or tutor who directs the study. How it is applied The student earned income exclusion is applied before the general income exclusion or the earned income exclusion. SSI PLAN FOR ACHIEVING SELF-SUPPORT What it does A plan for achieving self-support (known as a PASS) allows a person with a disability to set aside income and/or resources for a specified period of time for a work goal. For example, a person could set aside money for an education, vocational training or starting a business. The plan can help a person establish or maintain SSI eligibility and can also increase the person's SSI payment amount. A PASS does not affect an SGA determination for initial eligibility decisions. Income and resources that are set aside are excluded only under the SSI income and resources tests. Who can have Any person who is blind or disabled who receives SSI or could qualify for SSI can have a plan. It is important to keep in mind that as earnings go up, the person who does not need a plan now may need one next month to remain eligible or to increase the SSI payment amount. Requirements The plan must: Be designed especially for the person; Be in writing; Have a specific work goal which the person is capable of performing; Have a specific timeframe for reaching the goal; Show what money and other resources received will be used to reach the goal; Show how the money and resources will be used; Show how the money set aside will be kept identifiable from other funds; Be approved by the Social Security Administration; and Be reviewed periodically to assure compliance. SSI Who may help Anyone may help the person with the plan, e.g., vocational counselors, social workers or employers.The Social Security Administration evaluates the plan and determines its acceptability. The Social Security Administration also helps people put their plans in writing. How a plan is used to figure SSI eligibility and/or payment amount Resources set aside under a plan are not counted towards the $2,000 resource limit. If income is set aside under a plan, it is excluded in the same way as blind work expenses, i.e., after all other applicable exclusions are applied. (See example under Blind Work Expenses on page 47.) PROPERTY ESSENTIAL TO SELF-SUPPORT What it does This provision allows a person to exclude certain resources which are essential to the person's means of self-support. How it works Property which is used in a trade or business or used by a person for work as an employee is totally excluded as of May 1, 1990. For example, the value of tools or equipment which a person needs for work is totally excluded. For periods prior to May 1, 1990, the total exclusion only applied to property which was required by an employer. Up to $6,000 of equity value of non-business property which is used to produce goods or services essential to daily activities is excluded (e.g., land used to produce vegetables or livestock solely for consumption by the person's own household). Also, up to $6,000 of equity value of non-business income-producing property is excluded provided that the property yields an annual rate of return of at least 6 percent. This $6,000/6 percent rule also applies to property used in a trade or business for periods prior to May 1, 1990. SECTION 1619 WORK INCENTIVES Special SSI Payments for People Who Work (Section 1619(a)) What it does This incentive allows SSI beneficiaries to receive SSI cash payments even when earned income (gross wages and/or net earnings from self-employment) exceeds the SGA level. NOTE: It does not apply to SSI beneficiaries who are blind because the SGA requirement has never applied to them. Requirements to qualify To qualify for this incentive, the person must: Be eligible for an SSI payment for at least 1 month before he/she begins working at the SGA level; Still be disabled; and Meet all other eligibility rules, including the income and resource tests. How it applies People who have earnings above the SGA level can continue to receive SSI cash payments as long as they are still disabled and meet all other eligibility requirements. The person's payment amount will be calculated in the same way as for someone who is not working at the SGA level. (See earned income exclusion Example 2. on page 35.) The person will remain eligible for Medicaid. Continued Medicaid Eligibility (Section 1619(b)) What it does This incentive continues Medicaid coverage for most working SSI beneficiaries under age 65 when their earnings become too high to allow an SSI cash payment. NOTE: Effective May 1, 1991, a person age 65 or over who is blind or disabled may qualify for continued Medicaid coverage under section 1619(b). Requirements to qualify To qualify for this incentive, a person must: Have been eligible for an SSI cash payment for at least 1 month; Still meet the disability requirement; Still meet all other non-disability requirements; Need Medicaid in order to work; and Have gross earned income which is insufficient to replace SSI, Medicaid and any publicly funded attendant care. The Social Security Administration uses a threshold to measure whether a person's earnings are high enough to replace his/her SSI and Medicaid benefits. What is the threshold? The threshold amount is based on: The amount of earnings which would cause SSI cash payments to stop in the person's state; and The annual per capita Medicaid expenditure for the state. If the person's gross earnings are higher than the threshold amount for his/her state, the Social Security Administration can figure an individual threshold if the person has: Impairment-related work expenses (see pages 15-22); Blind work expenses (see pages 46-47); A plan to achieve self-support (see pages 37-38); Publicly funded attendant or personal care; or Medical expenses above the state per capita amount. Continued Medicaid eligibility in certain states The following states use their own definitions of eligibility for Medicaid purposes which differ from SSI eligibility criteria: Connecticut, Minnesota, Ohio, Hawaii, Missouri, Oklahoma Illinois, New Hampshire, Virginia, Indiana, North Dakota People in these states will continue to be eligible for Medicaid under the section 1619(a & b) incentive as long as they were eligible for Medicaid in the month before they became eligible for section 1619. Special Benefits for Section 1619 Recipients Who Enter a Medicaid Facility What it does This provision allows an individual who is eligible under section 1619 to receive an SSI cash benefit for up to 2 months while in a Medicaid facility or a public medical or psychiatric facility. Medicaid facility Usually when an SSI recipient enters a Medicaid facility (i.e., a facility where Medicaid pays more than 50 percent of the cost of care), the SSI payment is limited to $30 per month minus any countable income. However, if the person is eligible under section 1619, the benefit will be figured using the full Federal Benefit Rate (see page 35) for up to 2 months. Public medical or psychiatric facility an SSI recipient enters a public medical or psychiatric facility, he/she is not eligible to receive an SSI payment while in the facility. However, if the individual is eligible under section 1619, SSI cash benefits continue for up to 2 months. For this provision to apply, the facility must enter into an agreement with the Social Security Administration allowing the person to keep all of the SSI payment. Reinstating Eligibility Without a New Application What it does This provision enables people to regain eligibility for SSI cash payments or continued Medicaid coverage after a period of in eligibility without filing a new application. Cash payments A person who is eligible for continued Medicaid coverage under section 1619(b) can begin receiving SSI cash payments at any time earnings drop below the break-even point. (See glossary for a definition of break-even point.) A person who is ineligible for continued Medicaid coverage because earnings exceed the threshold can regain eligibility for SSI cash payments if income drops below the break-even point within 12 months. Medicaid coverage A person who is ineligible for continued Medicaid coverage because earnings exceed the threshold can regain eligibility for Medicaid coverage if earnings drop below the threshold within 12 months. SPECIAL RULES FOR PEOPLE WHO ARE BLIND SSDI How they help Work incentives, in general, are special rules that help people, who are blind and people with other disabilities, return to work or work for the first time. Some of the rules apply only to people who are blind. These rules are designed specifically to make it easier for people who are blind to go to work. NOTE: Blindness for Social Security purposes means either central visual acuity of 20/200 or less in the better eye with the use of a correcting lens, or a limitation in the field of vision in the better eye so that the widest diameter of the visual field subtends an angle of 20 degrees or less (tunnel vision). HOW SGA IS APPLIED TO PERSONS WHO ARE BLIND How SGA is applied to blind beneficiaries who work The SGA level for beneficiaries who are blind changes each year to reflect changes in general wage levels. For example, in 1995 the SGA level for people who are blind is $940 per month. This amount is higher than the SGA level of $500 a month that applies to who work non-blind disabled workers. How SGA is applied to self-employed beneficiaries who are blind Self-employed persons who are blind are evaluated for SGA on the sole criterion of earnings. A separate evaluation of the time spent in the business is not made as it is for non-blind self-employed persons. How SGA is applied to blind beneficiaries who are age 55 or older After attaining age 55, if earnings exceed the SGA guidelines but the work done requires a lower level of skill and ability than that done before age 55, then benefits are only suspended, not terminated. Therefore, eligibility for Social Security benefits may continue indefinitely and benefits may be paid for any month earnings fall below SGA. NOTE: Impairment-related work expense(s) deductions apply to blind SSDI beneficiaries who work. SSI BLIND WORK EXPENSES What it does Any earned income which a blind person uses to meet expenses needed to earn that income is not counted in determining SSI eligibility and the payment amount if the person is: Under age 65; or Age 65 or older and received SSI payments due to blindness (or received payments under a former state plan for aid to the blind) for the month before he or she attained age 65. Because the blind work expenses work incentive is more advantageous, impairment-related work expenses do not apply to the blind SSI beneficiary who works. NOTE: The expenses do not need to be related to the person's blindness. Examples of blind work expenses Some examples of blind work expenses are: Dog guide expenses; Transportation to and from work; Federal, state and local income taxes; Social Security taxes; Attendant care services; Visual and sensory aids; Translation of materials into braille; Professional association fees; and Union dues. NOTE: The above listing is not all-inclusive. SSI How blind work expenses are used to figure SSI payments Blind work expenses are used to reduce the amount of earnings which is counted when expenses are used figuring the SSI payment amount. The following example shows how the blind work expense exclusion affects a person's SSI payments. This example uses the same payments circumstances as Example 2 under the SSI "Earned Income Exclusion," except this person also has blind work expenses of $40 per month. EXAMPLE $161 (Earned income) subtract $20 (General income exclusion) is $141 subtract $65 (Earned income exclusion) is $ 76 divided by 2 (1/2 of remaining earned income) is $ 38 subtract $40 (Blind work expenses) equals $ 0 (Countable income) $458 (1995 Federal Benefit Rate) subtract $0 (Countable income) equals $458 (SSI payment) AVAILABLE INCOME $161 (Earned income) plus $ 458 (SSI) equals $619 (Total income) SSDI SSI SPECIAL SERVICES PROVIDED There are a number of services and products specifically designed to ensure that beneficiaries who are blind are informed of their rights and responsibilities under the Social Security programs. Social Security letters Letters and other correspondence can be received by certified mail, by telephone, or in person by notifying the Social Security Administration. Audio cassettes The Red Book is available on a cassette tape. Also, available is the booklet "If You Are Blind...How Social Security and SSI Can Help." Publications available in braille The Social Security Administration offers the following related publications (including the Red Book) in braille and are available upon request: Disability (Publication No. 05-10029); Supplemental Security Income (SSI) (Publication No. 05-11000); Medicare (Publication No. 05-10043); Understanding Social Security (Publication No. 05-10024)--A general but comprehensive overview of the Social Security program; Working While Disabled - How Social Security Can Help (Publication No. 05-10095) A simple explanation of the work incentives under Social Security and SSI for beneficiaries who want to work; Working While Disabled (Publication No. 05-11017) A guide to plans for achieving self-support (PASS) while receiving SSI; SSDI SSI When You Get Social Security Disability Benefits - What You Need to Know (Publication No. 05-10153) A guide to your rights and responsibilities while receiving Social Security disability benefits; When You Get SSI - What You Need to Know (Publication No. 05-11011) A guide to your rights and responsibilities while receiving SSI; and If You Are Blind - How Social Security and SSI Can Help(Publication No. 05-10052) A guide to the special work incentive rules that apply only to beneficiaries who are blind. GLOSSARY Blind Work Expenses (SSI) Provides that any earned income of a person who is blind which is used to meet expenses reasonably attributable to earning the income is not counted in determining SSI eligibility and the payment amount. Break-Even Point (SSI) The dollar amount at which total income precludes SSI payment. As countable income increases, SSI payments decrease until the person is no longer eligible for any SSI payment. A person's break-even point varies with his/her earned/unearned income mix, applicable income exclusions and State supplement eligibility, if any. Continuing Disability Review (SSDI and SSI) The process of obtaining complete current information about the person's condition and any work activity to determine if the Social Security Administration should continue disability Countable Income (SSI) The amount of money remaining after certain exclusions are deducted from total income used in determining SSI eligibility and payment amounts. Deeming (SSI) The process of considering the income and resources of a parent or spouse to be the income and resources of the person who is applying for or receiving SSI benefits. Extended Period of Eligibility (SSDI) Permits the reinstatement of SSDI benefits, without a new application, disability determination or waiting period, to those people whose cash benefits were previously ceased because of SGA, if they discontinue SGA within 36 months following the trial work period. They must still meet the disability requirements. Impairment-Related Work Expenses (SSDI and SSI) Applies to all SSDI and those SSI beneficiaries who are not blind. Provides that the cost to the person with a disability of certain items and services related to the impairment and needed to work (e.g., attendant care services, medical devices, etc.) can be deducted from earnings in determining if the person is engaging in SGA. The items and services may also be needed for normal daily activities. These same impairment-related work expenses can be deducted, under certain circumstances, from earned income to determine an SSI beneficiary's countable earned income. Income (SSI) SSI income is: Earned income-money received from wages or self-employment earnings; unearned income-money received from other sources such as Social Security or Veteran's benefits pensions; in-kind income-free food, clothing or shelter; and deemed income-the portion of the income of a spouse or parent or sponsor of an alien which is used in computing the SSI payment amount. (In-kind and deemed income are types of unearned incomes.) Medicaid (Medi-Cal Medical coverage provided to a person by the state title XIX program.in California) (SSI) Medical (Medi-Cal in California)(SSI) When a disability determination is made and it is determined that the disabling impairment may improve, the case is diaried for a future medical review (medical reexamination). Medicare (SSDI) Two-part health insurance program for eligible disabled and retired people: Hospital Insurance under Medicare (HI Part A); and Supplementary Medical Insurance under Medicare (SMI Part B). Medicare for People With Disabilities Who Work(SSDI) Allows certain people with disabilities who have returned to work to purchase continued Medicare coverage after premium-free Medicare ends due to work activity. The amount of the monthly premium will be the same as the premium amount charged uninsured people for Medicare hospital insurance and for medical insurance. States are required to pay hospital insurance premiums for qualified working individuals with disabilities. Plan for Achieving Self-Support (SSDI) Applies only to the SSI program. Under a plan, a person is permitted to set aside income and/or resources over a reasonable period of time in order to obtain occupational training or education, purchase occupational equipment, establish a business, etc., thereby enabling the person to become financially self-supporting. The income and resources set aside under a plan are excluded from the SSI income and resource tests. Property Essential to Self-Support (SSI) Applies only to the SSI program. This provision allows full or partial exclusion of certain property necessary for self-support. Resources (SSI) Resources can be anything a person owns, such as a bank account, stocks, real property or personal property. Substantial Gainful Activity (SSDI and SSI) Performance of significant duties over a reasonable period of time in work for pay or profit (generally earnings averaging more than $500 per month for non-blind- both SSDI and SSI). The SGA level for beneficiaries who are blind changes each year to reflect changes in general wage levels. For example, in 1995 the SGA level for people who are blind is $940 per month. SSDI Used to denote title II Social Security Disability Insurance. SSI Used to denote title XVI Supplemental Security Income. Trial Work Period (SSDI) Begins with the month of entitlement; however, it cannot begin earlier than the month the application is filed. It ends after 9 months (not necessarily consecutive) of work for over $200 per month (or over $200 net earnings or over 40 hours of work per month if self-employed) by an SSDI beneficiary. For the 9 months to be accumulated, they must occur within a 60-month rolling period. The trial work period gives a beneficiary the opportunity to test work ability. A determination of the ability to perform SGA is not made until after the trial work period is completed. ADDRESSES OF THE SOCIAL SECURITY ADMINISTRATION REGIONAL OFFICES Boston Region I Regional Commissioner, SSA Attn: Disability Programs Branch Room 1100 John F. Kennedy Federal Office Building Cambridge Street Boston, Massachusetts 02203 New York Region II Regional Commissioner, SSA Attn: Disability Programs Branch Room 40-102, Federal Office Building 26 Federal Plaza New York, New York 10278 Philadelphia Region III Regional Commissioner, SSA Attn: Disability Programs Branch P.O. Box 8788 3535 Market Street Philadelphia, Pennsylvania 19104 Atlanta Region IV Regional Commissioner, SSA Attn: Disability Programs Branch Suite 1902 101 Marietta Tower Atlanta, Georgia 30323 Chicago Region V Regional Commissioner, SSA Attn: Disability Programs Branch 10th Floor 600 West Madison Chicago, Illinois 60661 Dallas Region VI Regional Commissioner, SSA Attn: Disability Programs Branch Room 1440 1200 Main Tower Building Dallas, Texas 75202 Kansas City Region VII Regional Commissioner, SSA Attn: Disability Programs Branch Room 436 Federal Office Building 601 East 12th Street Kansas City, Missouri 64106 Denver Region VIII Regional Commissioner, SSA Attn: Disability Programs Branch Room 1194, Federal Office Building 1961 Stout Street Denver, Colorado 80294 San Francisco Region IX Regional Commissioner, SSA Attn: Disability Programs Branch 75 Hawthorne Street San Francisco, California 94105 Seattle Region X Regional Commissioner, SSA Attn: Disability Programs Branch 2201 Sixth Avenue M/S RX-53 Seattle, Washington 98121 ---------- Social Security Working While Disabled How We Can Help Social Security Administration SSA Publication No. 05-10095 January 1997 What's Inside Part 1 Why We Want To Help You Return To Work 1 Part 2 What You Should Know About Social Security Work Incentives 2 Part 3 What You Should Know About SSI Work Incentives 7 Part 4 What And How You Should Report To Social Security 12 Part 1 - Why We Want To Help You Return To Work If you are receiving Social Security Disability Insurance or Supplemental Security Income (SSI) disability benefits but still want to work, this booklet provides information to help you treat your disability as a "bridge," not the end of the road. The decision to work and earn as much as you can is yours, of course. However, many people see their work as more than just extra cash. They cite the satisfaction they get from overcoming a disability through their abilities, making new friends, and getting back in the mainstream. Most find that their earnings gradually increase to the point where they are better off working than not working. A National Policy Most of the rules discussed in this booklet are the result of laws passed in 1980 and 1987. In addition, Congress passed the Americans With Disabilities Act in July 1990, which prohibits discrimination against people with disabilities who wish to work. Helping people with disabilities to lead independent and fuller lives is a national policy affecting both the government and the private sector. How We Can Help You Work If you're like most people, you would rather work than stay home. But working is a big step for a person with a disability, and you probably have many fears and questions about what could happen to your monthly benefits. "How will my benefits be affected?" "Will I lose my Medicare or Medicaid?" "What about the extra cost of working because of my disability?" Social Security and SSI have special rules called "work incentives" to help you overcome some of these fears and problems. These work incentives include: Cash benefits while you work; Medicare or Medicaid while you work; Help with any extra work expenses you may have as a result of your disability; Help with education, training, and rehabilitation to start a new line of work. Social Security disability insurance benefits are paid to people with disabilities or to individuals who are blind who have worked under Social Security and to their dependents. SSI disability benefits are paid to people with disabilities or to individuals who are blind who have little income and few resources. Social Security beneficiaries with low income and few resources may also qualify for SSI. Although there are differences between Social Security and SSI, the work incentives under both programs are designed to accomplish the same objective: to provide support and assistance while you attempt to return to work or as you enter the workforce for the first time. Part 2 - What You Should Know About Social Security Work Incentives Work Incentive Rules At A Glance Following is a brief description of the rules that will help you work while you get Social Security disability benefits. Each is explained in more detail in the pages that follow. Trial Work Period - If you return to work for nine months (not necessarily consecutive), your earnings will not affect your Social Security benefit. If the nine months of trial work do not fall within a 60-month period, you may have even longer to test your ability to work. Extended Period Of Eligibility - For at least 36 months after a successful trial work period, if you continue to work while disabled, you may receive a benefit for any month your earnings fall below the "substantial gainful activity" level (in 1996, $500 a month for people with disabilities, $1,000 a month for people who are blind). Continuation Of Medicare - If your Social Security disability insurance benefits stop because your earnings are at the substantial gainful activity level but you are still disabled, Medicare can continue for at least 39 months after the trial work period ends. After that, you can buy Medicare coverage by paying a monthly premium. Impairment-Related Work Expenses - Certain expenses for things you need because of your impairment in order to work may be deducted when counting earnings to determine if you are performing substantial work. Recovery During Vocational Rehabilitation - If you medically recover while participating in a vocational rehabilitation program that is likely to lead to becoming self-supporting, benefits may continue until the program ends. Special Rules For Blind Persons - If you are blind, several special rules will help you work. Help For Low-Income Medicare Beneficiaries - If you get Medicare and have low income and few resources, your state may pay your Medicare premiums and, in some cases, other "out-of-pocket" Medicare expenses such as deductibles and coinsurance. Only your state can decide if you qualify. To find out if you do, contact your state or local welfare office or Medicaid agency. For more general information about the program, contact Social Security and ask for a copy of the leaflet "Medicare Savings for Qualified Beneficiaries" (HCFA Publication No. 02184). Answers To Most Commonly Asked Questions How Long Will Social Security Continue While I Work? Generally, you'll receive your full monthly Social Security benefit for a year after you return to work. If you continue to work beyond that while still disabled, your eligibility for monthly cash benefits will continue for at least another 36 months. Here's how it works: You can usually have a trial work period of nine months (not necessarily consecutive) during which your benefits will not be affected by your earnings regardless of how much you earn. A trial work month is any month in which your total earnings are more than $200 or, if you are self-employed, you earn more than $200 (after expenses) or spend more than 40 hours in your own business. When nine trial work months are successfully completed within 60 months, we review your work to see if your earnings are "substantial." (Generally, $500 per month is considered "substantial" earnings.) If they are, your benefits would continue for three more months and then stop. However, if you are still medically disabled and continue to work in spite of your disability, your benefits can be reinstated anytime during the next 36 months. During this time, you will receive your full Social Security benefit for any month your earnings fall below $500. Benefits would continue as long as you remain disabled and your earnings do not exceed $500 a month. How Much Can I Earn Before I Start Losing Benefits? Usually, earnings of more than $500 a month are considered substantial. If your earnings average less than $500 a month, your benefits generally would continue indefinitely. If your earnings average more than $500 a month, this is considered an indication of your ability to work. During the trial work period, there are no limits on your earnings. During the 36-month extended period of eligibility, the $500 level is the cutoff point. But, under another work incentive rule explained in the next answer, the work expenses you have as a result of your disability are deducted when we count your earnings to see if they affect your benefits. This means your earnings could be substantially higher than $500 before they affect your benefits. What Kind Of Help With My Work Expenses Can I Expect? We deduct work expenses related to your disability from your earnings before we determine your continued eligibility for benefits. These expenses may include the cost that you pay for any item or service you need to work, even if the item or service is also useful to you in your daily living. Examples include a seeing eye dog, prescription drugs, transportation to and from work (under certain conditions), a personal attendant or job coach, a wheelchair, or any specialized work equipment. If you also receive SSI payments, see Page 10 about a special rule called a "plan for achieving self-support" (PASS) that permits you to set aside funds and resources for up to 48 months for a special work goal. What Happens If I Lose My Job? If you lose your job during a trial work period, your benefits are not affected. If you lose your job during the 36-month "extended period of eligibility" (see Page 2), call us and your benefits will be reinstated as long as you are still disabled. You do not have to reapply for benefits or undergo any "waiting period" as you did when you first applied for disability benefits. If you become unable to work due to your disability after you complete the extended period of eligibility, you would have to reapply. If you become unable to work due to your disability within five years after you complete the extended period of eligibility and your claim is approved, there would be no waiting period. If your new application for benefits is approved, you have the opportunity for another trial work period and extended period of eligibility. How Long Would Medicare Continue Once I Start Working? Your Medicare coverage will continue through the trial work period and for at least 39 months after the trial work period if you are still disabled. During this period, your hospital insurance coverage is free. Your coverage continues even for those months during this period when your earnings are too high for you to receive cash benefits. When your Medicare coverage runs out after this period and you are still disabled, you may purchase the same coverage for a monthly premium. What About Help With Rehabilitation, Training, Or Education? If you are likely to benefit from rehabilitation, you are referred to a state rehabilitation agency or private organization for rehabilitation services. Social Security pays for the services if you are successfully rehabilitated. If you recover from your disability while in an approved rehabilitation or training program that is likely to result in your becoming self-supporting, benefits will continue until the program is over. For example, if you were in a nurse's aide training program and your condition improved so that you were no longer disabled, benefits would ordinarily stop. But if you have contacted Social Security and we are aware of your participation in the program and have approved it, then your benefits would continue until the program is over. For more information on Social Security and vocational rehabilitation, ask for the special leaflet "How Social Security Can Help With Vocational Rehabilitation" (SSA Publication No. 05-10050). How Do I Find Out If I Can Work Again? Just notify any Social Security office that you want to start working on a trial basis. If a periodic review of your condition was scheduled, we will put it off until your trial work period is over. Are There Special Rules For Blind Workers? If you are a blind person who works while receiving Social Security benefits, special rules apply to you. You can earn up to $1,000 a month in 1997 before your earnings affect your benefits. If your earnings are too high to receive disability benefits, you are still eligible for a disability "freeze." This means that those years in which you had low or no earnings because of your disability will not be counted in figuring your future benefits, which are based on your average earnings over your worklife. If you are 55 to 65, a more lenient rule is used to determine your inability to work. It says that you can receive disability benefits if you cannot do the same or similar work you did before you reached 55 or became blind, whichever is later. (The regular rule requires that a disabled person be unable to do any type of work in the general economy.) For more information on special rules for blind persons, ask Social Security for the publication "If You Are Blind - How We Can Help" (Publication No. 05-10052). Example Of What Happens When You Work Under Social Security While Disabled Pamela Watson, 24, was receiving disability benefits of $557 a month based on a childhood condition that made it difficult for her to walk. She wanted to work but was afraid of losing her benefits and Medicare. When she discussed this with a Social Security representative, she was told about disability work incentives under which she could work and still get cash benefits and Medicare. She found out that for the first nine months of work, her benefits would not be affected no matter how much she earned. Pamela started working in a local laundry part time and earned $650 a month. Here's how her income changed. Gross earnings: $650 Social Security check plus $557 Total Income $1,207 At the end of the nine months of work, Social Security evaluated Pamela's work to see if it was substantial. Since she was earning more than $500, her work was considered substantial. Her benefits continued for three more months and then stopped. However, because she was still disabled, her benefits could be reinstated anytime during the next 36 months if her earnings drop below $500. During the first year after her trial work period, her company relocated outside the city, where there were no bus lines. She hired a neighbor to drive her to work and paid a coworker to bring her home. Her transportation expenses totaled $120 a month. In addition, she purchased a special motorized wheelchair so she could get around the new suburban plant. This cost $75 a month. Let's figure Pamela's "countable" earnings after deducting her work expenses. Gross earnings $650 Subtract work expenses minus $195 Countable earnings $455 Because her countable earnings are less than $500, Pam's Social Security checks were reinstated. Her total income now is: Countable earnings $455 Social Security check plus $557 Total income $1,012 After a year, she paid off the motorized chair and her earnings increased to $890 a month. Her countable earnings now are: Gross earnings $890 Subtract work expenses minus $120 Countable earnings $770 Because her countable earnings now exceed the "substantial" level ($500), her Social Security benefits will stop. As you can see, at each point in her working life, Pamela's income was greater than it would have been if she had not worked. In addition, her Medicare coverage continued for 39 months following the trial work period. Part 3 - What You Should Know About SSI Work Incentives Work Incentive Rules At A Glance Following is a brief description of the rules that will help you work while you get SSI benefits. Each is explained in more detail in the pages that follow. Continuation Of SSI - If you work, you may continue to receive payments until the income we count exceeds the SSI limits. Continuation Of Medicaid Eligibility - Your Medicaid will usually continue even if you earn over the SSI limits if you cannot afford similar medical care and depend on Medicaid in order to work. Plans For Achieving Self-Support - You may set aside income and resources toward an approved plan for achieving self-support (PASS). See Page 10 for more information. Work Expenses Related To Your Disability - Certain work expenses you have because of your impairment may be subtracted from your earnings when we determine your eligibility and payment amount. If you are blind, the work expenses need not be related to the impairment. Recovery During Vocational Rehabilitation - If you recover while participating in a vocational rehabilitation program that is likely to lead to becoming self-supporting, benefits may continue until the program ends. Sheltered Workshop Payments - If you work in a sheltered workshop, special rules allow us to exclude some of your earnings when we figure your SSI payment. Disabled Students - Most scholarships or grants used to pay for tuition, books, and other expenses directly related to getting an education may not be counted as income if you go to school or are in a training program. You may also exclude up to $400 of earnings a month (up to a maximum of $1,620 a year). Help For Low-Income Medicare Beneficiaries - If you get Medicare and have low income and few resources, your state may pay your Medicare premiums and, in some cases, other "out-of-pocket" Medicare expenses such as deductibles and coinsurance. Only your state can decide if you qualify. To find out if you do, contact your state or local welfare office or Medicaid agency. For more general information about the program, contact Social Security and ask for a copy of the leaflet "Medicare Savings for Qualified Beneficiaries" (HCFA Publication No. 02184). Answers To Most Commonly Asked Questions How Long Will My SSI Payments Continue After I Go Back To Work? It depends on how much you earn. The amount of your SSI check is based on how much other income you have. When your other income goes up, your SSI check usually goes down. So when your earnings push your income over the SSI limits, your checks will stop for that month. (We discuss these limits in the answers to the next two questions.) But, they will start up again without a new application for any month your income drops below the SSI limits. If you're off both SSI and Medicaid for 12 months or more, you may need to apply again. How Do Earnings Reduce My Payments? If your only income besides SSI is the money you make from your job, then we don't count the first $85 in earnings you get each month. One-half of what you earn over $85 is deducted from your SSI check. If you have other income besides earnings (such as a Social Security check), then we don't count the first $65 in earnings you get each month. One-half of what you make over $65 is deducted from your SSI payments. But, $20 of your other income, such as your Social Security check, is not counted either. How Much Can I Earn Before I Lose All My Benefits? If you have no other income besides earnings, you may earn up to $1,053 a month in 1997 before losing your entire federal SSI payment. But if you live in a state that adds money to your federal SSI payment, you may earn more. If you have other income, such as Social Security benefits, the amount you can earn before losing any payment may be lower. However, when you apply for SSI disability payments, we consider earnings of $500 or more an indication that you are able to do "substantial work" and you would not qualify for SSI on the basis of disability. What Happens If I Lose Or Quit My Job? If you lose your job while you are still getting SSI, your payments will be increased because of your reduced income. If you lose your job within 12 months after your payments were stopped because your earnings were too high, and you are still disabled, your benefits would start again without an application. If you work for more than 12 months after your SSI or Medicaid stopped and then lose your job, you may need to reapply for SSI. How Long Will Medicaid Continue While I'm Working? In general, your Medicaid coverage will continue, even after your SSI payments stop, until your income reaches a certain level. That level varies with each state and reflects the cost of health care in your state. (Your Social Security office can tell you the Medicaid level for your state.) However, if your health care costs are higher than this level, you can have more income and keep your Medicaid. Also, for Medicaid to continue, you must: Need it in order to work; Be unable to afford similar health insurance coverage without SSI; Continue to have a disabling condition; and Meet all nondisability requirements other than earnings. If you qualify for Medicaid under these rules, we will review your case to see if you are still disabled or blind. How Can SSI Help Me With My Work Expenses? The rules work the same as if you were receiving Social Security benefits. Work expenses that are related to your disability are deducted from your earnings when we figure if they are high enough to affect your benefits. These expenses may include work equipment, such as a special typewriter or desk, or modifications to your car or home to help you get to and from work. This means you can earn well over the SSI income limits and still continue to get payments. What About Training And Rehabilitation Help? Under SSI, there's a special rule called a "plan for achieving self-support," or PASS. A PASS permits you to put aside money and assets toward a plan designed to help you support yourself. The money set aside won't reduce your SSI payment. The goal of your plan may be to start a business or get a job. If you have too much income to get SSI, a PASS may help you qualify. You may set aside the necessary income and assets to accomplish a work goal, and these funds will not count when we decide if you are eligible for SSI or how much SSI you receive. In addition, as under Social Security, if you recover from your disability while you are in an approved vocational rehabilitation program, your SSI payments will continue until you have completed the program. For more information on vocational rehabilitation opportunities, ask for the special leaflet "How Social Security Can Help With Vocational Rehabilitation" (SSA Publication 05-10050). How Do I Get Started On A PASS? Anyone can help you with a PASS, including your vocational rehabilitation worker, employer, or the Social Security office. In general, the following rules apply. The PASS must state a clear and realistic work goal. The PASS must state the amount and sources of income or resources that will be set aside. The PASS must state how you will spend the money. You must be able to achieve the goal of the PASS within a specified period of time. The PASS must be approved by Social Security. For more information about setting up a PASS, ask for the booklet "Working While Disabled - A Guide To Plans For Achieving Self-Support" (Publication No. 05-11017). Are There Special Rules For The Blind? If you are blind, most work expenses you have (not just those related to your disability) may be deducted from your income when we decide if you are eligible for SSI. For example, special clothes needed on the job or special equipment needed to work can be deducted. For more information on special rules for blind persons, ask Social Security for the publication "If You Are Blind How - We Can Help" (Publication No. 05-10052). What About Special Rules For Students With Disabilities? Most scholarships or grants used to pay for tuition, books, and other expenses related to getting an education may be deducted from your income if you go to school or are in a training program. Are There Special Rules For Sheltered Workshops? If you work in a sheltered workshop, special rules allow us to exclude some of your earnings when we figure your SSI payment. Example Of What Happens When You Work Under SSI Denni Hunt receives an SSI paymentof $484 each month and has Medicaid coverage. This is her only income. She was offered a job in a local fast food restaurant and contacted Social Security to see how this would affect her SSI payment. She was told that Social Security would not count the first $85 of earnings if she had no other income. Only half of the earnings over $85 would be counted against the SSI payment. Here is how her SSI payment would be affected: Gross monthly earnings $215 Subtract the $85 earnings deduction minus $85 Total $130 Divide by 2 to get earnings we count divided by 2 $65 Subtract earnings we count from SSI payment $484 minus $65 New SSI payment $419 Add monthly earnings plus $215 Total income $634 Note that before she started working, Denni's total income was her SSI check of $484. Now that she's working, she has that extra income in addition to her SSI check ($419), so her total income is $634, even though her SSI payment is slightly reduced. Denni's pay increased to $367 a month after 18 months. She purchased an electric wheelchair, which costs $52 a month, to help her move around better at work. Here's how the work expense deduction helps her: Gross earnings $367 Subtract the $85 earnings deduction minus $85 Total $282 Subtract work expenses minus $52 Total $230 Divide by 2 to get earnings we count divided by 2 Total $115 Subtract earnings we count from SSI payment $484 minus $115 New SSI payment $369 Add monthly earnings plus $367 Total income $736 So, even though her earnings went up by $152 (from $215 to $367), her SSI payment was reduced by only $50 (from $419 to $369) because of the work expense deduction. And her total income now is $736, substantially more than the $484 she had before she started working. Denni decided that she wanted to get a college degree. Her sister helped her write a PASS which described her plans to work and save money for school. Under the plan, she wanted to save $75 each month for school. Here's how the PASS helps her: Gross earnings $367 Subtract the $85 earnings deduction minus $85 Total $282 Subtract work expenses minus $52 Total $230 Divide by 2 to get earnings we count divided by 2 Total $115 Subtract PASS minus $75 Total $40 Subtract earnings we count from SSI payment $484 minus $40 New SSI payment $444 Add monthly earnings plus $367 Total income (SSI payment plus earnings) $811 ) So even though her earnings continue as high as they were in the previous example, her SSI checks are increased because we don't have to count the income she is setting aside to go to school. Her total income now is $811 monthly ($367 in earnings plus $444 in SSI). Part 4 - What And How You Should Report To Social Security Whether you're receiving Social Security or SSI disability payments, it's important that you stay in touch with Social Security while you're working. The people there will be able to help you plan your work effort and to show you how you can use other work incentives to achieve your work goals. You should immediately notify Social Security to report the following: Change of address; Change in the number of people in your household; Marriage or divorce; Change in income; Change in savings or investments, including selling your home, real estate, car, or personal property; Change in work expenses; Starting or ending a job; Leaving the United States for any period of time; Developing or changing your PASS; Your health improves; Entering or leaving a hospital or other institution; If you start receiving worker's compensation (including Black Lung) or a public disability benefit or if the amount of these benefits changes. For More Information For more information about working while disabled, you should call the Social Security office to speak to somebody about work incentives. You can call our toll-free number 1-800-772-1213 between 7 a.m. and 7 p.m. any business day. Recorded information is available 24 hours a day, including weekends and holidays. Our lines are busiest early in the week and early in the month, so if your business can wait, it's best to call at other times. Whenever you call, have your Social Security number handy. People who are deaf or hard of hearing may call our toll-free "TTY" number, 1-800-325-0778. You also can reach us on the Internet. Type http://www.ssa.gov to access Social Security information. The Social Security Administration treats all calls confidentially -whether they're made to our toll-free numbers or to one of our local offices. We also want to ensure that you receive accurate and courteous service. That is why we have a second Social Security representative monitor some incoming and outgoing telephone calls. ---------- Working While Disabled - A Guide to Plans for Achieving Self-Support Social Security Administration SSA Publication No. 05-11017 January 1997 What Is A Plan For Achieving Self-Support? Basically, a plan for achieving self-support, or PASS for short, is a plan for your future. Many people with disabilities want to work, and you're probably one of them. But maybe you need to go back to school before you can get a job. Or maybe you'd like to start your own business, but you don't have the money. Whatever your work goal may be, a PASS can help you reach it. A PASS lets you set aside money and/or other things you own to help you reach your goal. For example, you could set aside money to start a business or to go to school or to get training for a job. Your goal must be a job that will produce sufficient earnings to reduce your dependency on Supplemental Security Income (SSI) payments. A PASS is meant to help you acquire those items, services or skills you need so that you can compete with able-bodied persons for an entry level job in a professional, business, or trade environment. If you have graduated from college or a trade/technical school, we usually consider you capable of obtaining such a position without the assistance of a PASS. You can contact your local Social Security office to find out whether a PASS is appropriate for you. How Will A Plan Affect My SSI Benefit? Under regular SSI rules, your SSI benefit is reduced by the other income you have. But the income you set aside for a PASS doesn't reduce your SSI benefit. This means you can get a higher SSI benefit when you have a PASS. But you can't get more than the maximum SSI benefit for the State where you live. Money you save or things you own such as property or equipment that you set aside for a PASS won't count against the resource limit of $2,000 (or $3,000 for a couple). Under regular SSI rules, you wouldn't be eligible for SSI if your resources are above $2,000. But with a plan, you may set aside some resources so you would be eligible. Who Can Have A PASS? You can, if: You want to work; and You get SSI (or can qualify for SSI) because of blindness or a disability; and You have or expect to receive income (other than SSI) and/or resources to set aside toward a work goal. What Kinds Of Expenses Can A Plan Help Pay For? A plan may be used to pay for a variety of expenses that are necessary to help you reach your work goal. For example, your plan may help you save for: Supplies to start a business; Tuition, fees, books, and supplies needed for school or training; Supported-employment services, including payments for a job coach; Attendant care or child care expenses; Equipment and tools to do the job; Transportation to and from work; and Uniforms, special clothing, and safety equipment. These are only examples. Not all of these will apply to every plan. You might have other expenses depending on your goal. How Do I Set Up A Plan? Your plan must be in writing, and Social Security must approve it. The following chart shows you how to set up your plan. 1. Choose a work goal. It should be a job that you're interested in doing, and that you think you'll be able to do when your plan is completed. We can refer you to a vocational rehabilitation counselor who can help you choose your goal. You can also set up a PASS to cover any costs for the vocational services, including testing. 2. Find out all the steps you need to take to reach your goal, and how long it will take you to complete each step. 3. Decide what items or services you will need to reach your goal. Note: Each person will need different things to reach his/her goal. For example, if you want to work in a restaurant, you may need training to learn how to cook. If you want to become a computer programmer, you may need a college degree and a computer in order to reach your goal. If you want to start a business, you may need to buy equipment and supplies. 4. Get several cost estimates for the things you need to reach your goal. 5. Find out how much money you'll need to set aside each month to pay for them. Note: If you're setting aside income for your plan, your SSI benefit usually will increase to help pay your living expenses. The people at Social Security can estimate what your new SSI payment will be if you set up your plan. 6. Keep any money you save for the goal separate from any other money you have. The easiest way to do this is to open a separate bank account for the money you save under your plan. But, if you don't open a separate bank account, you must be able to tell us exactly how you're keeping the money separate. 7. Also include a business plan if you intend to start a business. Your business plan should explain: What kind of business you want to start (e.g., a restaurant, a print shop); How you will finance your business; Where you will set up your business( e.g., rent a store, share a space); Your hours of operation; How you will market your product or service; Who your suppliers and customers will be; and Your expected earnings. Note: We encourage you to talk with a local banker, the Small Business Administration, a vocational counselor, or other knowledgeable people about writing your business plan. 8. Write the plan, and then sign and date it. 9. Bring or mail your plan to your local Social Security office. Who May Help Me Set Up A Plan? You may set up a plan yourself or get help from: a vocational rehabilitation counselor; an organization that helps people with disabilities; an employer; a friend or relative; or the people at your Social Security office. Note: Some organizations charge a fee for writing a PASS. The Social Security office may be able to refer you to someone who does not charge a fee. How Do I Write A Plan? You should use the new PASS form SSA-545-BK. The form collects most of the information that Social Security needs to review your plan. You can get a copy at your local Social Security office. Be sure to answer all the questions on the form, and sign and date it. Then, bring or mail the completed form to Social Security. What Does Social Security Do After I Submit My Plan? After you submit your plan, Social Security will: review the plan to make sure it is complete; decide if there is a good chance that you can reach your goal; decide if any changes are needed and discuss those changes with you; and send you a letter to tell you if the plan is approved or denied. If your plan is approved, Social Security will contact you from time to time to make sure that you are doing what your plan says you will do to reach your goal. Make sure that you keep receipts for the items and services you have bought under the plan. What Happens If My Plan Is Not Approved? If your plan is not approved, you have a right to appeal the decision. The letter you'll get will explain your appeal rights and tell you what you need to do to file an appeal. You may also submit a new plan to Social Security. Can I Change My Plan After It Is Approved? Yes. However, you must get approval from Social Security in writing what changes you want to make, such as a change in the amount of money you set aside monthly, or a change in the expenses you will have. Social Security will review your request, and let you know if the changes are approved. It is very important that you tell Social Security as soon as possible about any changes that might affect your plan. What Happens If I Cannot Complete My Plan? If you cannot complete your plan, you may set up a new plan with a new work goal. If you don't set up a new plan, any money or other things set aside under the original plan may count toward the $2,000 resource limit for getting SSI. If your resources are over the limit, it's possible you may lose your eligibility for SSI. Also, Social Security will start counting the income you were setting aside under the plan. Tell Social Security as soon as possible that you cannot complete your plan. Then, you won't have to pay back any extra SSI you got while you were following your plan. How Will A Plan Affect Other Benefits I Get? You should check with the agency that is responsible for those benefits to find out if the plan (and the extra SSI) might affect those benefits. In many cases, income and resources set aside under a plan will not be counted for food stamps and housing assistance provided through the U.S. Department of Housing and Urban Development. But, it's important that you contact the particular agency to find out how your benefits will be affected. Are There Any Other Rules That May Help? Yes. Other SSI rules may help you while you work. They can help you keep more of your SSI benefit, and they can help you keep your Medicaid. There are also some special rules for students. For more information, ask Social Security for the booklet, "Working While Disabled - How We Can Help." (SSA Publication No. 05-10095). For More Information If you want more information or if you want to make an appointment with a Social Security representative, just give us a call. Our telephone number is 1-800-772-1213. Recorded information is available 24 hours a day, including weekends and holidays. You can speak to a service representative between 7 a.m. and 7 p.m. on business days. Our lines are busiest early in the month so, if your business can wait, it's best to call at other times. When you call, have your Social Security number handy. People who are deaf or hard of hearing may call our toll-free "TTY" number, 1-800-325-0778, between 7 a.m. and 7 p.m. on business days. You also can reach us on the Internet. Type http://www.ssa.gov to access Social Security information. The Social Security Administration treats all calls confidentially - whether they're made to our toll-free numbers or to one of our local offices. We also want to ensure that you receive accurate and courteous service. That is why we have a second Social Security representative monitor some incoming and outgoing telephone calls