Individual Author:
James R. Sheldon, Jr., Esq.
National Assistive Technology Advocacy Project
Neighborhood Legal Services, Inc.
295 Main Street, Room 495
Buffalo, New York 14203
(v) 716-847-0650; (fax) 716-847-0227
(tdd) 716-847-1322
(email) jsheldon@nls.org
(web page) www.nls.org
 

This Publication is Funded Through a Contract Received From the National Institute on Disability and Rehabilitation Research, U.S. Department of Education.

The Assistive Technology Funding & Systems Change Project is fully funded under Contract # HN94040001 from the National Institute on Disability and Rehabilitation Research, U.S. Department of Education, to United Cerebral Palsy Associations, Inc. and its subcontractors.

The National Assistive Technology Advocacy Project is fully funded under Contract # H224B990002 from the National Institute on Disability and Rehabilitation Research, U.S. Department of Education, to Neighborhood Legal Services, Inc. and its subcontractors.

The opinions expressed herein do not necessarily reflect the position of the U.S. Department of Education, and no official endorsement by the U.S. Department of Education of the opinions expressed herein should be inferred.
 

I. Introduction

II. The Distinction Between Social Security and SSI, Medicare and Medicaid: an Overview
        A. SSDI
        B. SSI
        C. Medicare
        D. Medicaid

III. Two Major Work Disincentives: the $700 Rule and the Continuing Disability Review
        A. The $700 Substantial Gainful Activity Rule
        B. Continuing Disability Reviews and the Medical Improvement Standard
                1. When to Expect a Continuing Disability Review
                2. The Medical Improvement Standard
                3. New Ticket to Work/WIIA Provision: The Work-Triggered
                    Continuing Disability Review is Eliminated Effective January 1, 2002
                4. New Ticket to Work/WIIA Provision: No CDR Will Take Place
                    While a Person is Using a "Ticket"
                5. Continuation of Benefits, Despite Medical Improvement, for Persons
                    Involved in Vocational Rehabilitation Programs

IV. Work Incentives and Social Security: How to Avoid the $700 SGA Rule in the SSDI Program
        A. Earnings Above $700 Per Month Create a "Rebuttable Presumption" of SGA.
        B. Establishing That Earnings Have Not Been Sustained: Income
            Averaging, Unsuccessful Work Attempts
                1. Averaging of Earnings and the SSDI Applicant
                2. Averaging Rules Will Not Apply During SSDI's Trial Work
                    Period or Extended Period of Eligibility
                3. Will Averaging Rules Apply After the Extended Period of Eligibility?
                4. A Related Concept: The Unsuccessful Work Attempt
                5. How Long Must Earnings Average $700 or More Before Work is
                    Considered To Be SGA?
        C. Establishing That "Countable Wages" Are Less Than $700
                1. Subsidies Will Be Deducted From Gross Wages
                2. Business-Related Expenses Will Be Deducted
                3. Impairment-Related Work Expenses Will Be Deducted
        D. When Sustained Earnings Above $700 Can Be Disregarded
                1. The Trial Work Period
                2. The Extended Period of Eligibility
                3. Illustrations of the Trial Work Period and Extended Period of Eligibility
                4. New Ticket to Work/WIIA Provision: Expedited Reinstatement of
                    SSDI Benefits After the EPE
                5. Continuing Eligibility for Medicare While an Individual is Working
                        a. Medicare Will Continue During the Trial Work Period.
                        b. The 39-Month Extended Period of Medicare Coverage
                        c. New Ticket to Work/WIIA Provision: The Extended Period
                            of Medicare Coverage Will be Available for an Additional Four
                            and One Half Years.
                        d. The Right to Buy-In to Medicare Following the 39-Month
                            Extended Period

V. Work Incentives Under the SSI Program
        A. The $700 Substantial Gainful Activity Rule Will Apply to SSI Applicants:
             How To Avoid It
        B. Under Section 1619(a), the $700 SGA Rule Does Not Apply to SSI Recipients.
        C. Calculating the SSI Check: The Earned Income Disregards as Work Incentives
                1. The First $65 Plus 50 Percent of the Remaining Gross Wages Will
                    Be Disregarded
                2. Impairment Related Work Expenses
                3. The Student Earned Income Exclusion
                4. Blind Work Expenses as an Earned Income Exclusion
        D. Section 1619(b): Extended Medicaid Coverage
                1. General Criteria for 1619(b)
                2. 1619(b) Eligibility in Medicaid 209(b) States
        E. New Ticket to Work/WIIA Provision: Expedited Reinstatement of SSI Benefits
             Lost Due to Earned Income

VI. The SSI Plan for Achieving Self-Support

        A. General Description of the Plan for Achieving Self-Support
        B. Criteria for PASS Approval
        C. Use of Excluded Income or Resources
        D. How the PASS Budgeting Works
        E. Likely Candidates for a PASS
        F. Using "Deemed Income" to Fund a Vocational Objective: PASSes for Spouses
            and Children
        G. Strategy Tip: Use of the PASS to Gain Access to 1619(b) Medicaid
        H. Amendment, Abandonment, or Termination of PASS
        I. A Note of Caution

VII. The Special Need for Community Outreach and Education

VIII. Conclusion

APPENDIX - A: TICKET TO WORK AND WORK INCENTIVES IMPROVEMENT
                       ACT OF 1999 - A Summary of Key Provisions
 
 

209(b) State: State which uses its own eligibility criteria to determine if an SSI recipient is eligible for Medicaid

1619(a): SSI rule that allows individual to qualify for SSI despite wages of more than $700 per month

1619(b): SSI rule that allows individual to qualify for Medicaid if budgeting of wages results in termination of SSI cash benefits

ADA: Americans with Disabilities Act

AT: Assistive technology

CDR: Continuing Disability Review

CFR: Code of Federal Regulations

EPE: Extended Period of Eligibility

IRWE: Impairment Related Work Expense

POMS: Social Security Program Operations Manual System

SGA: Substantial gainful activity

SSA: Social Security Administration

SSDI: Social Security Disability Insurance

SSI: Supplemental Security Income

SSR: Social Security Ruling

Ticket to Work/WIIA: The Ticket to Work and Work Incentives Improvement Act of 1999

TWP: Trial Work Period

U.S.C.: United States Code

VR: Vocational rehabilitation
 
 

I. Introduction

        This booklet presents a detailed discussion of the work incentives available under the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs,⁽¹⁾ with a special emphasis placed on using work incentives as a tool to fund assistive technology (AT).⁽²⁾

        Throughout the 1980s and 1990s work incentives have been a best-kept secret. This was true despite a Congressional mandate that the Social Security Administration (SSA) take steps to educate its staff, state rehabilitation agencies, and advocacy groups concerning the availability of work incentives.⁽³⁾ The recent passage of the Ticket to Work and Work Incentives Improvement Act of 1999, and SSA's funding of return-to-work demonstration projects in 12 states will create much greater awareness and thirst for knowledge about the work incentives as we move into the year 2000.

        More than ever before, persons with disabilities are working. This is the result of several factors: changes in attitudes about what persons with disabilities are capable of doing; new technologies, particularly in the personal computer field, that allow many persons with severe physical, cognitive, or visual disabilities to work and earn competitive pay; and the use of supported employment, rather than sheltered employment, as the placement of choice for individuals with developmental disabilities and chronic mental health problems. Also, for more than five years, the Americans with Disabilities Act has applied to most employers with 15 or more employees. These developments make the work incentives more important than ever before.

        Most of the work incentives have been available since the early 1980s. Some have been available for 25 years or more. Our experience, however, suggests that no more than a small percentage of persons with disabilities and the agency personnel who work with them have a good understanding of these provisions and how they can be used. For example, the section 1619(b) Medicaid provisions, which may be the most important of all the incentives discussed in this booklet, continue to be unknown and underutilized in every state.

        Where does the recently signed Ticket to Work and Work Incentives Improvement Act of 1999 (Ticket to Work/WIIA) fit in? Readers may be surprised to find so few references to Ticket to Work/WIIA in the primary text of this booklet. This is because the new, non-optional work incentive rules in the Act are limited to: elimination of work-triggered continuing disability reviews (CDRs); elimination of all CDRs for persons holding Tickets; expedited reinstatement of benefits; and expansion of the extended Medicare provisions. These changes are worked into the text below.⁽⁴⁾ Other important provisions which do not create any new or improved work incentives include: the Ticket to Work and Self Sufficiency; the creation of a Ticket to Work and Work Incentives Advisory Panel; the Work Incentives Planning and Assistance Program; the state Protection and Advocacy Program; the expansion of the optional state Medicaid Buy-In program; and the renewal of authority for SSDI demonstration projects and studies. A short summary, highlighting the provisions of Ticket to Work/WIIA, is contained at the end of this booklet as Appendix-A.

        We hope this booklet will stimulate interest in the work incentive provisions. We also hope that many protection and advocacy, legal services, and other attorneys and advocates will actively promote use of the work incentives and will assist individuals in analyzing how they can make maximum use of them. In particular, we hope many readers will begin to look at the work incentives as a way to leverage money for specialized medical services and assistive technology to enhance the work efforts of individuals with disabilities.

II. The Distinction Between Social Security and SSI, Medicare and Medicaid: an Overview

        This booklet assumes a basic understanding of SSDI and SSI. It will not discuss the criteria followed by SSA in establishing disability under either program. Since the work incentives and other provisions which determine how work affects benefits will vary greatly between SSDI and SSI, it is important to distinguish the two programs. It is also important to distinguish Medicare and Medicaid, the two major health insurance programs serving persons with disabilities.

        A. SSDI

        SSDI is an insurance program. To qualify, one must meet an earnings or "insured status" test, i.e., a wage earner must have put money into the Social Security trust fund. Both the wage earner and person with a disability who was dependent upon a wage earner may be eligible for SSDI benefits. Because it is an insurance program, current income will not affect the amount of one's SSDI check. Earnings, however, may affect whether the person is considered disabled.⁽⁵⁾

       B. SSI

   SSI is a program for individuals with limited income and resources. SSI can be a person's only source of income or it can supplement some other source of income, such as SSDI. Because SSI is a needs-based program, the amount of one's income is always relevant in determining the amount of the monthly SSI check. Under section 1619(a), however, once a person has been approved for SSI, the amount of earnings will never affect the determination of whether that person continues to be disabled.⁽⁶⁾

   C. Medicare

       Medicare, a federal health insurance program authorized by Title XVIII of the Social Security Act,⁽⁷⁾ is most frequently associated with the receipt of Social Security benefits. Adults with disabilities can establish eligibility in three ways: 1) after 24 months of eligibility for SSDI benefits; 2) after 24 months of eligibility for Railroad Retirement disability benefits; or 3) if suffering from kidney disease and not receiving SSDI benefits, upon entering end stage renal disease or developing an impairment that requires regular dialysis or kidney transplantation to maintain life.⁽⁸⁾

        A person who is eligible for Medicare qualifies automatically for Medicare Part A. Part A, known as hospital insurance benefits, covers such things as inpatient care, skilled nursing facility care, hospice care, home health services, and durable medical equipment.⁽⁹⁾ Part B, known as supplemental medical insurance, is optional and requires payment of a monthly premium. The 2000 Part B premium is $45.50 per month. Part B covers various outpatient services, including physician services, durable medical equipment, prosthetic devices, orthotic devices, and home health services.⁽¹⁰⁾

        D. Medicaid

        Medicaid,⁽¹¹⁾ like SSI, is a needs-based program. In 39 states, a person who receives SSI benefits automatically qualifies for Medicaid.⁽¹²⁾ In 11 states, known as section 209(b) states, Medicaid eligibility is not automatic for SSI recipients. Section 209(b) states use their own Medicaid eligibility criteria, which differ from SSI eligibility criteria.⁽¹³⁾ The states which exercise the 209(b) option include: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia.⁽¹⁴⁾ In any individual case, particularly those in which an individual is heavily dependent on expensive services or equipment that are covered by Medicaid, it may be important to preserve SSI eligibility to ensure the continuation of Medicaid.

III. Two Major Work Disincentives: the $700 Rule and the Continuing Disability Review

    SSDI and SSI recipients, their advocates, and other professionals who work with them often approach the subject of competitive employment with great fear. They fear loss of cash benefits, loss of health insurance coverage, and -- should a work attempt fail -- the time-consuming reapplication process. For those heavily dependent on Medicaid to fund home health care services or expensive assistive technology devices, like power wheelchairs, the loss of health care coverage could keep them from leaving their home to go to work.

        There is no foolproof way to allay every fear. But there are numerous work incentives, discussed below, that allow one relief from the fears, either temporarily or, in some cases, permanently. First, however, we will review two major disincentives that cause these fears.

        A. The $700 Substantial Gainful Activity Rule

        The general rule is that average earnings of $700 per month or more amount to substantial gainful activity (SGA).⁽¹⁵⁾ Absent the application of one of the rules discussed below, a person earning an average of $700 per month would be denied benefits as an applicant for SSDI or SSI, or would be terminated from the SSDI program if already receiving benefits.⁽¹⁶⁾ Under these rules, average earnings of less than $300 per month will not amount to SGA and will not affect entitlement. If earnings are between $300 and $700 per month, SSA is required to individually evaluate the person's work to see if it indicates that he or she is performing SGA.⁽¹⁷⁾ SSA does not typically terminate benefits under the SGA rule unless earnings are more than $700 per month.

        For the SSDI applicant or recipient who is legally blind, $1,170 in monthly earnings is considered to be SGA in 2000. That amount goes up each year, as the SGA test for the blind is adjusted annually. There is no SGA rule for the blind in the SSI program.⁽¹⁸⁾ The United States Court of Appeals for the Tenth Circuit has held that Social Security's statutes and regulations, allowing persons who are blind a higher SGA threshold than allowed for persons with other disabilities, do not violate the U.S. Constitution's equal protection clause.⁽¹⁹⁾

        Those who have worked as disability advocates know how harsh the $700 rule can be. Monthly earnings in the $700 to $1000 range will seldom, if ever, duplicate the combination of cash and medical benefits that have become the basis of no more than a subsistence existence. When one factors in the difficulties in finding permanent gainful employment, many individuals with disabilities have chosen not to seek competitive employment.

        B. Continuing Disability Reviews and the Medical Improvement Standard

        The continuing disability review (CDR) can be another major disincentive to work. Many justifiably fear that work activity in one's record increases the likelihood that a CDR will result in a termination of benefits. Indeed, many advocates have discouraged work activity for this very reason. Advocates should not discourage work activity. Instead, the advocate's role is to ensure that the person with a disability understands the potential impact of work on benefits so that he or she can make informed choices about work and use of the work incentives. Advocates must also ensure that persons with disabilities are aware of the new Ticket to Work/WIIA provisions that will eliminate CDRs in some circumstances.⁽²⁰⁾

        This section will not attempt to explain fully the CDR process and SSA's application of the medical improvement standard.⁽²¹⁾ Instead, it will provide some parameters on when a CDR can be expected and how the medical improvement standard will be applied.

            1. When to Expect a Continuing Disability Review

        There are three categories of SSDI or SSI beneficiaries for CDR purposes. Individuals in each category will have SSA review their cases more or less frequently, depending upon where they fit.⁽²²⁾ These are referred to as diaried CDRs and will occur whether or not the individual is working. The three categories are:

    (1) Medical Improvement Not Expected: Reviewed every five to seven years.

    (2) Medical Improvement Possible: Reviewed once every three years.

    (3) Medical Improvement Expected: Reviewed six to 18 months after initial entitlement.

        2. The Medical Improvement Standard

    Generally, disability benefits will be terminated only if there is medical improvement that enables the person to engage in substantial gainful activity. There are several exceptions to the medical improvement standard, allowing for termination of benefits when there has been no medical improvement. Three of these exceptions are noteworthy:

    (1) where there is no real medical improvement, but the person is now able to engage in SGA because he or she is a beneficiary of advances in medical or vocational therapy or technology;

    (2) where new or improved diagnostic techniques or evaluations show that the person's impairment or combination of impairments is not as disabling as it was considered to be when the person's case was most recently reviewed;

    (3) where substantial evidence shows that a prior determination was in error.

Where the listed criteria are present, a person can be terminated from SSDI or SSI despite the absence of medical improvement.⁽²³⁾

        If an SSDI or SSI recipient works, how can he or she avoid the implication of medical improvement? The only "safe" cases, where it is clear that the disability has not improved, will be those in which the person's disability continues to meet the criteria of a "listing."⁽²⁴⁾ The Listing of Impairments contains 14 different categories of disability and specific criteria under each category which will support a finding of disability without further analysis of the person's ability to perform work activity. Primary candidates for this treatment include persons with mental retardation, legal blindness, deafness, or severe physical disabilities, particularly those that render a person quadriplegic.⁽²⁵⁾ Since meeting a listing results in an automatic finding of disability, a medical improvement termination could not occur.⁽²⁶⁾ More problematic cases are those involving mental illness or pain as the primary disability. Since mental illness and pain symptoms cannot be as easily objectified or quantified, the work activity might be viewed as evidence of improvement.

        Advocates may not have easy answers for those who fear that work activity will result in loss of disability benefits under the medical improvement or SGA rules. What they can do is make sure persons with disabilities are aware of the parameters of those rules and of the applicable work incentive rules. Thereafter, the individual must make his or her own informed decision concerning which path to follow.

        In the end, many individuals will pursue vocational goals, despite the risk to their benefits. Hence, it is important that advocates become familiar with the rules governing how work affects benefits and with the various methods of preserving cash benefits and medical benefits for individuals who become involved in vocational activity.

            3. New Ticket to Work/WIIA Provision: The Work-Triggered Continuing Disability Review is Eliminated Effective January 1, 2002

        Under current law, a CDR is authorized after an SSDI recipient completes nine trial work months.⁽²⁷⁾ This work-triggered CDR will be eliminated effective January 1, 2002 for persons who have received SSDI benefits for at least 24 months. For such individuals, no CDR may be scheduled solely as a result of the individual's work activity. No work activity may be used as evidence that the individual is no longer disabled and no cessation of work activity may give rise to a presumption that the individual is unable to engage in work. Persons affected by this section will still be subject to regularly scheduled CDRs that are not triggered by work activity and will be subject to termination of benefits if they perform SGA activity by earning more than $700.⁽²⁸⁾

            4. New Ticket to Work/WIIA Provision: No CDR Will Take Place While a Person is Using a "Ticket"

        During the period for which an SSDI or SSI beneficiary is using a "ticket," or voucher for rehabilitation services under the new Ticket to Work and Self-Sufficiency Program, SSA may not initiate a CDR or similar review to determine if the individual is no longer disabled.⁽²⁹⁾ The effective date of the Ticket provisions is January 1, 2001 and full implementation of its provisions is not required in every state until January 1, 2004. Accordingly, a person's ability to benefit from this provision will vary from state to state depending on when the Ticket provisions get implemented.

            5. Continuation of Benefits, Despite Medical Improvement, for Persons Involved in Vocational Rehabilitation Programs

        An important exception to the medical improvement rules adds a special protection for persons who medically improve after beginning participation in a vocational rehabilitation program approved by SSA.⁽³⁰⁾ Prior to November 1, 1991, the law had required that participation had to be in a program approved under Title I of the Rehabilitation Act of 1973.⁽³¹⁾ Under 1990 amendments, effective November 1, 1991, participation may be in any vocational rehabilitation program which SSA approves and not just those developed by a state agency.⁽³²⁾ Typically, this provision would apply to persons who medically improve while attending a college or other training program, and allows benefits to continue despite the medical improvement.

        The federal statute provides two requirements for continued SSDI or SSI eligibility: (1) participation must be in an approved vocational rehabilitation program, and (2) participation must increase the likelihood that the person will be permanently removed from the disability rolls. SSA's regulations add the requirement that the person must have begun the program before his or her disability ceased.⁽³³⁾

        SSA has recently clarified that this protection also extends to persons who have been receiving child's SSI benefits and who, upon reaching age 18, will have their SSI claims reviewed for eligibility under adult disability criteria. Although SSA decision makers are to make redetermination decisions, at age 18, based on adult criteria, the SSI recipient under review is still to be afforded the same right to continued benefits as are other persons being reviewed for medical improvement under a traditional CDR.⁽³⁴⁾

IV. Work Incentives and Social Security: How to Avoid the $700 SGA Rule in the SSDI Program

        The work incentives and other rules governing the impact of work on benefits vary greatly between SSDI and SSI. Therefore, the two programs will be discussed separately. Under the SSDI program, the $700 rule applies to both applicants and recipients.⁽³⁵⁾ When it applies, it results in either a denial or termination of benefits. The theory is that a person who earns $700 per month is performing SGA. Under the sequential evaluation process for evaluating SSDI eligibility, a person who is performing SGA cannot be considered disabled.⁽³⁶⁾

        There are four approaches to avoiding the $700 rule as it applies in the SSDI program. First, as articulated by several courts, $700 in wages creates a presumption of SGA which may be rebutted by evidence concerning how well the person performs the work. Second, the rule does not apply where the average countable monthly wage is less than $700. Third, the rule does not apply if the person is not earning $700 per month in "countable wages." Fourth, average countable earnings of $700 or more monthly can be disregarded under trial work period rules.

        Remember -- independent evidence that a person has medically improved and regained the capacity for SGA can still result in a termination of benefits.

        A. Earnings Above $700 Per Month Create a "Rebuttable Presumption" of SGA.

        The SSDI regulations state that earnings above $700 per month "will ordinarily show that [the claimant has] engaged in substantial gainful activity."⁽³⁷⁾ In addition to looking at monthly wages, SSA is also required to look at the nature of work performed, the adequacy of performance, any special employment conditions, and the amount of time spent working.⁽³⁸⁾ Several courts have held that wages above $700 monthly create only a rebuttable presumption of SGA.⁽³⁹⁾

        B. Establishing That Earnings Have Not Been Sustained: Income Averaging, Unsuccessful Work Attempts

            1. Averaging of Earnings and the SSDI Applicant

        Many persons with disabilities have irregular work patterns. Under income averaging rules, if earnings are not constant, an applicant for SSDI benefits must sustain earnings averaging $700 or more monthly over a number of months before earnings can be equated with SGA. If work is steady and continuous, wages are averaged over the entire work period; if work is seasonal or sporadic, only the work months are counted in determining the average.⁽⁴⁰⁾

        An example will illustrate how this could work. Bill Smith, who has multiple sclerosis, applies for SSDI in May 2000. Bill claims he became disabled in July 1999, the month in which he substantially reduced his work hours because of his disability. At the time he applies, Mr. Smith's earnings for the 10-month period, July 1999 through April 2000, were:

                                    July - $580                    Dec. - $685
                                    Aug. - $740                  Jan. - $565
                                    Sept. - $595                 Feb. - $745
                                    Oct. - $705                  Mar. - $620
                                    Nov. - $790                 Apr. - $670

        Mr. Smith's earnings were above $700 during four of the 10 months, but his average earnings were $669.50 or below the SGA level. Based on income averaging rules, Mr. Smith will not be denied SSDI benefits based on his earnings. His eligibility for benefits will now be reviewed based on his medical condition.

            2. Averaging Rules Will Not Apply During SSDI's Trial Work Period or Extended Period of Eligibility

        The trial work period (TWP) and extended period of eligibility (EPE) are discussed in part IV.D, below. During the nine-month TWP, the SSDI recipient is entitled to keep the benefit check each month no matter how high earnings are. Therefore, income averaging rules will not apply during the TWP. During the EPE, a 36-month period immediately following the TWP, the right to an SSDI check will depend each month on whether the person is earning above or below the $700 SGA amount. Income averaging rules will not apply during the EPE.

            3. Will Averaging Rules Apply After the Extended Period of Eligibility?

        Following the TWP and EPE, will one or two isolated months of earnings above the $700 level result in a termination of benefits? The answer in the States of Connecticut, New York and Vermont, i.e., within the jurisdiction of the United States Court of Appeals for the Second Circuit, is clearly no at this time. The Second Circuit, in Conley v. Bowen, ruled that a proper interpretation of the relevant statutes and regulations governing SGA and benefits termination requires that SSA cannot terminate benefits unless "average" monthly wages exceed $700 per month following the end of the extended period of eligibility.⁽⁴¹⁾

        SSA's position in Conley was, and continues to be in the rest of the country, that income averaging rules apply only at the time of application. SSA contends that following the trial work period and extended period of eligibility, SSDI benefits can be terminated if a person earns more than $700 in any one month.⁽⁴²⁾

        SSA's position would allow termination of benefits if an SSDI recipient earned $705 in one isolated month after completing the trial work period and extended period of eligibility -- even if the person did not work at all in the 12 months preceding or following this work month. As the Second Circuit held in Conley, that is not a reasoned position as SSA's own regulations governing income averaging do not limit averaging of income to the application process.⁽⁴³⁾ Although the Second Circuit's position on this appears to be the more reasoned approach, it may take litigation in the other Circuits to combat SSA's position on income averaging.

            4. A Related Concept: The Unsuccessful Work Attempt

        Closely related to the income averaging rules is the concept of an unsuccessful work attempt (UWA). Even if a person does sustain average earnings above $700, this may be considered a UWA if employment is stopped for reasons related to the person's disability.⁽⁴⁴⁾ Under SSA policy, work at the SGA earnings level may be disregarded if it is discontinued or reduced to the non-SGA level after less than six months because of the person's impairment or the removal of special work conditions related to the impairment that are essential to the further performance of work.⁽⁴⁵⁾

        The UWA criteria differ depending on whether the work effort was for three months or less or for three to six months. The work is considered to be a UWA if it ended or was reduced to the non-SGA level within three months due to the impairment or to the removal of special conditions related to the impairment that are essential for the further performance of work. If the work lasted between three and six months, SSA requires, in addition, the presence of one or more of the following factors: frequent absences due to the impairment; unsatisfactory work due to the impairment; performance of the work during a period of temporary remission from the impairment; or performance of the work under special conditions.⁽⁴⁶⁾

            5. How Long Must Earnings Average $700 or More Before Work is Considered To Be SGA?

        There is some question about how long one can earn above the SGA level before an application is denied or benefits are terminated. When one reads the income averaging and unsuccessful work attempt provisions together, it is reasonable to argue that an application should not be denied and benefits should never be terminated if SGA has not been sustained for at least six months. Again, as discussed above, SSA's position is that benefits can be terminated if the person earns above the SGA level for one month following the extended period of eligibility.

        C. Establishing That "Countable Wages" Are Less Than $700

        Although a person's gross earnings amount to $700 or more monthly, his or her countable earnings, for SSDI purposes, may be lower because the person's earnings are subsidized or because business-related or impairment-related work expense deductions reduce the earnings below $700.

            1. Subsidies Will Be Deducted From Gross Wages

        Subsidies may exist in sheltered, supported, and competitive employment, and in some government-sponsored training programs. Under Social Security regulations, any part of one's monthly wages that can be attributed to a subsidy will not count when measuring wages against the $700 SGA rule. SSA will only count that part of wages that can be fairly attributed to a worker's productivity.⁽⁴⁷⁾ Advocates should always consider the possibility of a subsidy if the person is working in a sheltered, supported, or special environment.⁽⁴⁸⁾ In competitive employment, a person's wage may contain a hidden subsidy. The employer may, for some reason, pay a worker more than his or her productivity would justify. Perhaps this is a reward for a long-term, loyal employee who has become disabled; maybe the employee is a friend of the family; or this may be an act of charity.⁽⁴⁹⁾ Whatever the employer's motives, it is crucial to establish the real worth of the person's labors.

        Many state and federally sponsored training and job placement programs exist for persons with disabilities. If part of a wage is paid by the government agency, and is not related to productivity, there is a strong argument that the worker has not earned that part of the wage. For example, a person placed in private industry may be paid $7 per hour, but a state rehabilitation agency may be paying a $3.50 per hour subsidy toward the wage. Under these circumstances, it can probably be established that only the amount paid by the employer, i.e., $3.50 per hour, will count as earnings under the $700 rule.

        Supported employment is replacing sheltered employment as an option for persons with disabilities. In supported employment the worker usually works in a traditional job, but receives special assistance, often in the form of job coaching services. The job coach is typically provided by an agency other than the employer. SSA has recognized that the services of a job coach will often amount to a subsidy.⁽⁵⁰⁾

        The relevant regulations, POMS, and Social Security Rulings do not address how to calculate a subsidy when a person receives job coaching services. SSA, in a Regional Program Circular, states that the job coach's monthly hours should be multiplied by the worker's hourly pay rate (i.e., the hourly rate of the person with a disability) to determine the amount of the monthly subsidy.⁽⁵¹⁾ The author believes that the more appropriate measure of the subsidy would be to determine the cost of the job coach services to the providing agency (including salary, fringe benefits, and agency overhead) and deduct that amount from gross wages to determine whether the person's wages are more than $700 monthly.⁽⁵²⁾ If the worker receives additional services in connection with the job, such as case management, this cost might also be considered as a subsidy.

        Consider this SSDI recipient. Gerald, who is mentally retarded, works as a dishwasher, makes $7 per hour and earns $850 monthly. Agency X provides Gerald with 20 hours of job coach services each month. The job coach services cost agency X $20 per hour (including salary, fringe benefits, and overhead) or $400 per month.

        If we use SSA's formula for calculating the subsidy, Gerald's countable wages for SGA purposes will be $710 per month [$850 - 140 (20 job coach hours multiplied by Gerald's $7 hourly wage)]. In that case, SSA would find Gerald to be performing SGA. If we calculate the subsidy by using the actual cost of providing the job coach's services, Gerald's countable wages for SGA purposes will be $450 per month [$850 - 400 (20 job coach hours multiplied by agency's $20 hourly cost)]. By using the latter method, Gerald's wages are reduced below the $700 SGA level.⁽⁵³⁾

        Some employers may provide special assistance or accommodations to employees with disabilities under the mandates of the Americans With Disabilities Act,⁽⁵⁴⁾ or section 504 of the Federal Rehabilitation Act.⁽⁵⁵⁾ For example, an office worker who is blind may be entitled to services from a reader to allow him or her to perform a job.⁽⁵⁶⁾ Do these extra services amount to a subsidy? Current regulations and policy do not specifically address this question; however, there is no reason why this situation should not be treated the same as that involving the employee who gets help from a job coach. SSA should assign a dollar value to the extra services and deduct that amount from gross monthly wages to determine whether the person is earning more than the $700 SGA amount or corresponding SGA amount for the blind.

        What if the accommodation consists of adaptive equipment to allow an individual to do his or her job? For example, a salesperson with below-the-waist paralysis may be provided with a modified van, at greater expense than cars provided to other employees, to allow him or her to call on customers. A paralegal who is blind may be provided with specialized computer equipment, including voice output, a braille printer, and braille paper to allow him or her to do the job. To the extent that one can attach an extra cost to these accommodations, compared to what is provided to able-bodied or sighted employees, can these extra costs be considered subsidies to reduce countable wages below $700 per month? Here again, current regulations and policy are silent on the issue. However, it would appear that the same rationale for finding a subsidy with job coach services would apply here.

            2. Business-Related Expenses Will Be Deducted

        If a person is self-employed, he or she is allowed to deduct the reasonable cost of business-related expenses.⁽⁵⁷⁾ This may include costs for rent, utilities, use of a vehicle, purchasing supplies, or use of a telephone. If the business is conducted out of the home, consider the possibility of segregating certain rooms of one's house and allocating a portion of household expenses to the business. If the person has filed a tax return for the year in question, SSA should look at annual net income, after business-related deductions, and divide by 12 to determine what amount of monthly income is measured against the $700 rule.

            3. Impairment-Related Work Expenses Will Be Deducted

        Impairment Related Work Expenses (IRWEs) are the reasonable cost of items and services that, because of an impairment, one needs and uses in order to work.⁽⁵⁸⁾ This would include such items as attendant care, medical or prosthetic devices, drugs and medical services, residential modifications, and special transportation.

        To be deductible as an IRWE, the expense must meet a three-part test:

            1. The expense in question must be paid by the worker and not paid or reimbursed by another source.⁽⁵⁹⁾

            2. The item or service in question must relate to the individual's disability.

            3. It must be established that the individual could not work if he or she did not receive the item
                or service and incur the expense.

        A medical expense can be deducted as an IRWE even where that expense would be incurred in the absence of employment. The test is whether the person could work without paying the expense.⁽⁶⁰⁾ Accordingly, a person with epilepsy can deduct the cost of anticonvulsant medication as an IRWE, even though this medication would be required in any event.⁽⁶¹⁾

        Many assistive-technology related expenses could qualify as IRWEs. These include:

• a wide range of transportation-related expenses for persons who are mobility impaired (e.g., hand controls or a hydraulic lift)
• construction of ramps or lifts to allow a person to leave the home
• purchase of a telecommunication device for the deaf (TDD) to allow a person to perform work-related tasks in an office or from home
• purchase of specialized or modified office equipment (e.g., desks, phones, or computers) to work in an office or from home

        D. When Sustained Earnings Above $700 Can Be Disregarded

        After applying the rules discussed above, if the average earnings are above $700 monthly, one must look to specific work incentive rules to continue SSDI payments or Medicare coverage.

            1. The Trial Work Period

        The trial work period (TWP) is a nine-month period during which the SSDI recipient may test his or her ability to work, without losing benefits.⁽⁶²⁾ During the trial work period, the $700 rule will not be applicable. The SSDI recipient will be allowed to keep both paycheck and disability check, no matter how high the paycheck is.⁽⁶³⁾

        The work itself, when performed during the TWP, cannot be used to show medical improvement. However, after the ninth trial work month, SSA can start looking at a person's work activity to determine if the medical condition has improved.⁽⁶⁴⁾

        The nine months of the TWP need not be consecutive months. Any month in which the person earns at least $200 will be considered a trial work "services" month. For the self-employed, a trial work month is any month with 40 or more work hours, regardless of the amount of earnings.⁽⁶⁵⁾ Because the nine TWP months need not be consecutive, a person who started receiving SSDI in 1992, worked for five trial work months in 1993 and resumed work in 1995 would have only four trial work months left upon the return to work. What if this same person did not work in 1995, but returned to work in 1999? How would we compute that person's TWP?

        The TWP will be computed under a "60-Month Rolling Trial Work Period."⁽⁶⁶⁾ When an SSDI recipient works enough to be credited with a TWP services month (i.e., earns more than $200), SSA will count back 60 months to see if nine services months have been worked during that period. If not, SSA will wait until the next services month is worked to see if nine services months have been completed during the previous 60 months from that date. Each time a services month is worked, SSA will look at the past 60 months to see if the TWP has been completed.

        An SSDI recipient is allowed only one TWP for a period of disability.⁽⁶⁷⁾ The rules do allow a person to have more than nine TWP services months so long as the person does not have nine services months within any period of 60 months. However, once the person works nine TWP months within a 60 month period, the TWP will be completed and a second TWP will not be allowed during that period of disability.

        An example will illustrate how the TWP rules operate:

Mary developed severe depression in the late 1980s and began collecting SSDI benefits in 1992. She worked two services months in January and February 1994; worked four services months in April through July 1998; and worked three more services months in October through December 1999.

        What if Mary doesn't work again until the latter part of 2000 and then works (and earns at least $200) in November and December 2000? Now Mary has worked nine TWP months within a 60-month period (i.e., April through July 1998 - months one through four; October through December 1999 - months five through seven; November 2000 - month eight; and December 2000 - month nine) and her TWP will be completed.

        How long will benefits continue if the Mary finishes her TWP in December 2000 and is still earning more than $700 monthly in January 2001? In that case, entitlement to SSDI benefits ends three months after the end of the nine-month TWP. At any time following the TWP that the individual first performs SGA, the individual will be eligible for three months of benefits, i.e., the "cessation month" plus two additional months. This is often referred to as the "three month grace period." In Mary's case, these happen to be the first three months of the Extended Period of Eligibility. Thus, a person with a disability who goes to work for the first time and earns more than $700 per month can receive both an SSDI check and a paycheck for 12 consecutive months.⁽⁶⁸⁾

        Benefits can always be terminated during the TWP if the person ceases to have a disability, but termination must be based on some new evidence, other than evidence of work done during the TWP, showing that the person's condition has medically improved.⁽⁶⁹⁾

            2. The Extended Period of Eligibility

        For the SSDI recipient with a severe physical or mental disability, the TWP may not offer a strong enough shield against a loss of benefits. The recipient may lose his or her job after nine months for any number of reasons: e.g., the disability got worse, the employer became dissatisfied with job performance, or there was a layoff. Advocates and recipients may justifiably fear that the recipient will have to go through a lengthy reapplication process, and possibly an appeal process, to reestablish SSDI entitlement.

        To help allay these fears, the extended period of eligibility (EPE), or reentitlement period, allows the person to reestablish SSDI eligibility without a new application, if work activity ceases or is significantly diminished during the 36 months following the TWP.⁽⁷⁰⁾ The 36 months run consecutively following the ninth month of trial work, whether or not the person is performing SGA at the time.⁽⁷¹⁾

        What happens if a person performs SGA during the EPE? Under SSA's policy,⁽⁷²⁾ the first month of SGA during the EPE will be called the "cessation month." The person will be eligible for SSDI benefits for that month and the following two months. This is true whether the month of SGA is the first month of the EPE or some later month of that 36-month period. Thereafter, during the remainder of the EPE, the person will not receive benefits for any month in which he or she performs SGA (i.e., earns more than $700). The person will receive benefits for any month in which he or she does not perform SGA (i.e., earns less than $700).

            3. Illustrations of the Trial Work Period and Extended Period of Eligibility

        Let's consider Mary again from the example above. Her ninth trial work was December 2000. What if she continues working and earning more than $700 during the first 12 months of her EPE and then loses her job? In that case, since her wages go below $700 while she is in her EPE, her SSDI checks should be reinstated administratively, without a lengthy reapplication process. Mary's EPE will continue through December 2003. What happens if she comes to the end of her EPE and is earning above $700 monthly in countable wages? In that case, Mary's SSDI benefits are permanently terminated. If she stops working in August 2004 (i.e., after the end of the EPE), she will need to reapply for SSDI.⁽⁷³⁾ However, if Mary were to stop working in June 2003 (i.e., before the end of the EPE), the SSDI benefits would resume without a new application.

        A second example will illustrate application of the TWP and EPE rules when impairment related work expenses (IRWEs) are involved:

Consider Jennifer, who is an SSDI recipient and receives $780 in benefits each month. She is spinal cord injured and uses a wheelchair. Jennifer has worked part-time for the past eight months earning $1,050 gross per month as a part-time paralegal. This is the first work she has done as an SSDI recipient. Jennifer pays a driver $200 per month to take her to and from work in her wheelchair. This is the only way Jennifer can get back and forth to work as she does not live on a public transportation route.

It has been a struggle the past eight months to leave the home three days each week in her wheelchair. She has badly damaged two of her doorways and her driver has helped to wheel her in and out of her home using two makeshift planks. To allow her to safely leave the home for work without assistance, she has two doorways widened and a ramp constructed at her home at a cost of $4,800 which she agrees to pay in 24 monthly payments of $200.

Jennifer has been able to keep the SSDI checks the past eight months, despite her work, because she is still within her nine-month TWP. Will she be able to keep her SSDI checks as she moves into her EPE?

        Since Jennifer is about to enter her EPE, it would appear that she will be able to continue eligibility for SSDI for the next 24 months. During the EPE, Jennifer will be qualify for an SSDI check for each month that her countable income is less than $700. After she finishes paying for the home improvements, her IRWEs will be reduced to $200 per month (i.e., her transportation-related expenses) and her countable earnings will be $850 per month. At that point, Jennifer will perform her first month of SGA during the EPE. As her first month of SGA, Jennifer will be entitled to SSDI checks for that month (i.e., her "cessation month") and the two following months (i.e., for the "three-month grace period"). She would not be entitled to an SSDI check in each month of the remainder of the EPE if her countable income remained more than $700.

            4. New Ticket to Work/WIIA Provision: Expedited Reinstatement of SSDI Benefits After the EPE

        These provisions, referred to by some as the "Easy On, Easy Off" provisions, are effective January 1, 2001.⁽⁷⁵⁾ They will, under certain circumstances, allow for reinstatement of SSDI even if the individual performed SGA after the end of the EPE. Under these provisions SSDI benefits will be reinstated without a new application if the following criteria is met:

(a) The individual was eligible for SSDI;

(b) The individual lost SSDI due to performance of SGA;

(c) The individual files a request for reinstatement within 60 months of the last month of entitlement, or, if the individual files a request for reinstatement after 60 months, the individual establishes good cause for missing the 60-month deadline;

(d) The individual's disability is the same as (or related to) the physical or mental disability that was the basis for their original claim; and

(e) That disability renders the individual incapable of SGA.

Consider Tom. Assume Tom performed SGA by earning more than $700 throughout his TWP and EPE. Tom continues to perform SGA for the first 12 months following his EPE. If Tom continues to perform SGA after the end of his EPE, he will lose his entitlement to SSDI. Even in a state, like New York, which is protected by the holding in Conley v. Bowen,⁽⁷⁶⁾ Tom will lose his SSDI if his earnings have averaged more than $700 following the EPE.

Let's assume the following additional facts in his case: Tom completes his TWP in December 1998 and completes his EPE in December 2001. He earns $800 monthly January 2002 through December 2002 when his job ends. Tom's disability, degenerative multiple sclerosis, is the same or worse than at the time of his original claim for SSDI. It still renders him incapable of SGA under SSA's critieria.

            5. Continuing Eligibility for Medicare While an Individual is Working

        As noted above in part II, an SSDI recipient will be eligible to receive Medicare coverage after two years of SSDI eligibility. Although Medicare will not usually be as valuable as Medicaid, it may be the only form of health insurance for some SSDI recipients. Medicare Part B can cover expensive assistive technology devices, such as custom and power wheelchairs, under its durable medical equipment provisions. It can also cover significant home health care services for those that meet the stringent requirements.⁽⁷⁸⁾

                a. Medicare Will Continue During the Trial Work Period.

        If the SSDI recipient goes to work despite a continuing disability, Medicare eligibility will always continue throughout the nine-month TWP. Medicare Part A will continue to be automatic and Part B coverage will be optional and subject to the same premium payment.

                b. The 39-Month Extended Period of Medicare Coverage

        Medicare coverage can be extended for 39 months after the end of the trial work period if the individual's disability continues.⁽⁷⁹⁾ During this extended period, Medicare Part A will continue to be automatic and Medicare Part B will continue to be optional, subject to a premium payment.

                c. New Ticket to Work/WIIA Provision: The Extended Period of Medicare Coverage Will be Available for an Additional Four and One Half Years.

        Effective October 1, 2000, the Ticket to Work/WIIA increases the Extended Period of Medicare Coverage by an additional four and one half years (i.e., 54 months). Under the new law, the Extended Period of Medicare Coverage will now be for 93 months or seven years, nine months after the ninth trial work month.⁽⁸⁰⁾

                d. The Right to Buy-In to Medicare Following the 39-Month Extended Period

        An individual who exhausts his or her trial work period and 39-month Extended Period of Medicare Coverage (93 months effective October 1, 2000) may be able to continue Medicare eligibility through a "buy-in" program. The individual must continue to be disabled and their loss of SSDI benefits must be due solely to having earnings which exceed the $700 SGA amount ($1,170 if legally blind). Medicare eligibility, under this section, can continue indefinitely so long as the individual continues to be disabled and pays the enrollment premiums.⁽⁸¹⁾

V. Work Incentives Under the SSI Program

        The importance of SSI, for many individuals, is that it creates automatic Medicaid eligibility in most states. For this reason, the various incentives discussed below may have an impact not solely measured by the cash benefit that the person is able to maintain.

        A. The $700 Substantial Gainful Activity Rule Will Apply to SSI Applicants: How To Avoid It

        The $700 rule will apply to SSI applicants. If an SSI applicant is performing SGA, i.e., earning more than $700 monthly, his or her application will ordinarily be denied.⁽⁸²⁾ All of the analysis that applies to the SSDI applicant will, therefore, apply to the SSI applicant.⁽⁸³⁾ The SGA rule does not apply to persons who are eligible for SSI based on age or blindness.⁽⁸⁴⁾

        The $700 rule can be avoided by showing that the person's countable wages are less than $700 per month. Earnings can be reduced below $700 by showing the existence of a subsidy, business-related expenses, or impairment-related work expenses.⁽⁸⁵⁾ An SSI applicant can also avoid the $700 rule by showing that countable earnings did not average more than $700 per month.⁽⁸⁶⁾

        B. Under Section 1619(a), the $700 SGA Rule Does Not Apply to SSI Recipients.

        Sections 1619(a) and (b) of the Social Security Act started out as part of a demonstration project in 1981. The Employment Opportunities for Disabled Americans Act, effective July 1987, made sections 1619(a) and (b) permanent.⁽⁸⁷⁾ Both the section 1619(a) and 1619(b) provisions apply in every state.

        Section 1619(a) allows an SSI recipient to continue receiving benefits even when wages are more than $700 per month.⁽⁸⁸⁾ This has been the case since January 1, 1981. Because they are no longer considered a necessity, the trial work period and the extended period of eligibility were eliminated from the SSI program in 1987 when the section 1619 provisions became permanent.⁽⁸⁹⁾

        To be eligible under 1619(a) one must:

(1) continue to be disabled,

(2) meet all nondisability criteria for SSI, and

(3) meet the "prior month" requirements.⁽⁹⁰⁾

        Under 1619(a), a recipient with a continuing disability can earn well in excess of $700 monthly and still retain SSI. The earnings would simply be budgeted, following SSI's criteria for disregarding a percentage of earned income.

        C. Calculating the SSI Check: The Earned Income Disregards as Work Incentives

        The earned income disregards can be a powerful incentive for many SSI recipients who are thinking about working. Because more than 50 percent of a person's gross wages will be disregarded in the SSI check calculation, the person is frequently better off by going to work.⁽⁹³⁾

        SSI determines the monthly check by deducting countable income from the SSI base rate to determine the monthly benefit check. The SSI rates will vary from state to state, as states supplement the SSI federal benefit rate (FBR) at their option. For 2000, the SSI FBR is $512 per month for an individual.

            1. The First $65 Plus 50 Percent of the Remaining Gross Wages Will Be Disregarded

        The SSI program distinguishes between unearned and earned income. Unearned income is anything other than wages and includes SSDI payments. Earned income includes wages received from employment or self-employment.⁽⁹⁴⁾ In calculating the SSI check, the first $20 of unearned income is disregarded.⁽⁹⁵⁾ In addition, SSI disregards the first $65 plus 50 percent of the remaining gross wages. If the person has no unearned income, the $20 will be added to the $65 and SSI will disregard the first $85 of gross wages.⁽⁹⁶⁾

        Let's look at some examples:

Sam lives in a state that does not supplement the $512 FBR. He receives $512 in SSI benefits. He is offered a part-time job in which he would earn $385 in gross pay per month.

        Let's take the example one step further:

Sam is offered an increase in the number of hours he works. He would now make $785 per month. Sam is concerned because he once heard something about the $700 SGA rule.⁽⁹⁸⁾ He comes to you for advice.

            2. Impairment Related Work Expenses

            Impairment related work expenses (IRWEs) were discussed in the SSDI section, above, as a way to reduce countable income below the $700 SGA limit.⁽⁹⁹⁾ Any item(s) paid for by the SSI recipient which would meet the SSDI criteria for an IRWE, as discussed above, would also qualify as an IRWE for SSI purposes and reduce the countable income to be applied in calculating the SSI check.⁽¹⁰⁰⁾

        Consider the following example:

Ronald had polio as a child. He lives alone in a home which he owns. Recently, in his 50s, his mobility problems worsened. Ronald receives $220 in SSDI benefits and earns $765 in gross wages per month. The combined income makes him ineligible for SSI, as his state pays the federal benefit rate of $512 with no state supplement. He is eligible for Medicare, but would not be eligible for automatic Medicaid as an SSI recipient. He is not eligible for Medicaid under the section 1619(b) program because he never received SSI in the past.⁽¹⁰¹⁾

Ronald takes out a home improvement loan to make a spare bedroom into a home office that will accommodate his disability, with a widened doorway and a specially designed work station to allow him to work from his wheelchair. After obtaining the loan and having the work done, Ronald will make monthly payments of $200 per month for the next three years. These payments would qualify as IRWEs and reduce countable wages below $700 for SGA purposes. The IRWEs will also reduce his countable income for calculating the SSI check.

        Step 1              Unearned income              $220
                                                                       - 20
                                                         Counted $200

        Step 2              Earned income                  $765
                               IRWE deduction              - 200
                                                                         565
                              Earned income exclusion     - 65
                                                                         500
                              Additional 50% exclusion  - 250
                              Counted                             $250

        Step 3             Counted unearned income $200
                              Counted earned income       250
                              Total counted income         $450

        Step 4             Base SSI rate                      $512
                              Counted income                 - 450
                              SSI benefit                           $ 62

        Ron will now be eligible for SSI, but will need to file an SSI application. For every additional $2 in IRWEs, Ronald's SSI check will increased by $1. For example, if Ronald has difficulty typing due to arthritis and purchases a special keyboard for $100, he will have an additional IRWE of $100. However, under the formula above, his earned income would only be decreased by $50 and his SSI check would increase by $50 and would now be $112 per month.

        For Ronald, the eligibility for this minimal SSI check makes him automatically eligible for Medicaid in 39 states. This is important, since Medicaid may pay for many items which Medicare will not cover, including prescription drugs and more extensive home health care in many states. Also, since Medicare will pay no more than 80 percent of the cost of assistive technology, Medicaid is available to pay the copayment.

            3. The Student Earned Income Exclusion

        There is a special exclusion for the earned income of students. The student must be under age 22, not married or a head of household, and regularly attending a school, college, university, or course of vocational or technical training. The first $400 of earnings are excluded each month, up to a maximum of $1,620 per year.⁽¹⁰²⁾

    The following example illustrates application of the student earned income exclusion:

Jose, age 20, is deaf and receives SSI benefits. He attends college full time and does not work during the school year. During June, July, and August, he works and earns $885 gross each month.

            Step 1                          Unearned income                      $ 0

            Step 2                          Earned income                       $885
                                               Student deduction                 - 400
                                                                                              485

                                               Unearned income deduction
                                               (not otherwise used)                - 20
                                               Earned income exclusion         - 65
                                                                                              400

                                               Additional 50% exclusion      - 200
                                               Counted                                 $200
 

            Step 3                         Counted unearned income         $ 0
                                              Counted earned income            200
                                              Total counted income               $200

            Step 4                         Base SSI rate                          $512
                                             Counted income                      - 200
                                             SSI benefit                                $312

            4. Blind Work Expenses as an Earned Income Exclusion

        In calculating the SSI check, persons who are legally blind are allowed many deductions from earned income which are not allowed for any other disability.⁽¹⁰³⁾ The following is a list of the most common blind work expenses (BWEs):

        (1) Federal, state and local income taxes;

        (2) Social Security taxes;

        (3) Mandatory pension contributions;

        (4) Meals consumed during work hours;

        (5) Training to use an impairment-related item or an item which is reasonably attributable to work
             (e.g., cane travel, braille, computer course for computer operator);

        (6) A guide dog (cost of purchase and all associated expenses, including food, licenses and veterinary services);

        (7) Transportation to and from work;

        (8) Attendant care services (in the work setting, to get a person to and from work, and, in some cases, in the home);

        (9) Structural modifications to get a person to and from work;

        (10) Medical devices, medical supplies and physical therapy.

        In many cases a BWE might also be available as an impairment related work expense (IRWE).⁽¹⁰⁴⁾ When an item can be used as either a BWE or an IRWE, it is always to the advantage of the person to use the BWE. This is because the BWE is deducted from earned income after using the 50 percent earned income exclusion; the IRWE is deducted before using the 50 percent earned income exclusion. The practical effect is that the person sees a dollar for dollar increase in the SSI check for BWE expenditures. For IRWE expenditures, there is a 50 cent increase in the SSI check for every one dollar spent.

        The following is an example of an SSI budget using blind work expenses:

Chuck is legally blind and works as a social worker making $20,220 per year or $1,685 per month. Chuck lives alone and has the following monthly expenses that meet the SSI criteria as BWEs:

(federal, state & local)

Social Security tax 105

union dues 10

transportation 75

guide dog 20

lunches ($5 per day) 110

readers 100

braille paper 10

cassette tapes 25

computer disks 10

Total $535

Calculation of SSI check:

$1,685

- 85 ($65 + $20 exclusions)

1,600

- 800 additional 50 % exclusion

800

- 535 blind work expenses

$ 265 countable income

$ 512 Base SSI rate (FBR with no state supplement)

- 265 countable income

$ 247 Monthly SSI check

BWEs offer a tremendous opportunity to fund a wide range of work-related assistive technology:

Consider Tanya, an attorney who is blind and receives $512 in monthly SSI benefits. She would like to set up a practice in a home office. A firm is willing to pay Tanya $30,000 per year or $2,500 per month, as an independent contractor, to prepare the written arguments or briefs in up to 10 Social Security appeals that are taken to federal court. Tanya developed expertise in Social Security during a law school internship at the law firm that is now willing to contract with her. After deducting the usual business-related expenses, Tanya's self-employment income is reduced to $24,000 per year or $2,000 per month.

Tanya has done this type of work before using paid readers and a traditional dictation machine. Knowing that these methods have slowed down her productivity, she seeks to invest in state-of-the- art technology that will help her boost both the quality of her work and her efficiency. She plans to invest in the following items: a personal computer with voice activation, voice output, and a raised braille sub-screen; a high quality braille printer; and a high quality scanner. She will purchase these items through a small business loan at a total cost of $6,600. After adding in finance charges, Tanya will pay $200 per month on this loan for a 36-month period. This full $200 per month payment will qualify as a BWE.

                    income taxes                                              $ 85
                    (federal, state & local)
                    Social Security tax                                      240⁽¹⁰⁵⁾
                    transportation                                               85
                    guide dog                                                     20
                    readers                                                      100
                    braille paper                                                 30
                    cassette tapes                                               25
                    computer disks                                             10
                    payments, new equipment                          200
                    Total                                                         $795⁽¹⁰⁶⁾

        Calculation of SSI check:

                    $2,000.00
                    -      85.00                          ($65 + $20 exclusions)
                      1,915.00
                    -    957.50                          additional 50 % exclusion
                         957.50
                       - 795.00                          blind work expenses
                       $ 162.50                          countable income
                       $ 512.00                          Base SSI rate (FBR with no state supplement)
                        - 162.50                         countable income
                        $ 349.50                        Monthly SSI check

        Despite the $30,000 in revenue from the law firm contract, Tanya is able to reduce her countable monthly income, for SSI purposes, below $200 per month. She has done this by using traditional business deductions, the usual SSI earned income deductions, and BWEs. This allows her to generate an extra $349.50 per month plus automatic Medicaid eligibility (in most states) during that critical three-year period as she is building up her private law practice. With additional business-related expenses or BWEs her SSI check would even be higher.

        D. Section 1619(b): Extended Medicaid Coverage

            1. General Criteria for 1619(b)

        The ability to continue Medicaid coverage, through the section 1619(b) provisions, may be the most important incentive that currently exists within the federal disability structure. Medicaid is often the way that persons with severe disabilities pay for very expensive items or services, such as home health care, prescription drugs, psychiatric counseling, custom and power wheelchairs, augmentative communication devices, and a range of other services that will depend, in part, on whether your state has included various optional services in its State Medicaid Plan.

        Section 1619(b) provides Medicaid for individuals who lose their cash SSI benefits because their earnings become too high to continue receiving cash benefits.⁽¹⁰⁷⁾ Loss of cash benefits will occur when countable income exceeds the person's maximum SSI payment rate. For example, in states which pay the $512 FBR, with no state supplement, gross monthly income of $1,109 will result in $512 in countable income, reducing the SSI check to $0. In the majority of states where SSI eligibility results in automatic Medicaid eligibility, the loss of SSI could mean a loss of Medicaid. Under 1619(b), such a person may be able to continue his or her Medicaid entitlement.

        Under 1619(b) criteria, a person must:

        (1) continue to be blind or disabled [A person age 65 or older may qualify for 1619(b) if he
              or she is also blind or disabled.];

        (2) have unearned income less than the SSI limit;

        (3) have resources within SSI limits;

        (4) meet the prior month requirement;

        (5) meet the Medicaid use test; and

        (6) not be able to afford medical care without assistance, i.e., meet a "threshold" test.⁽¹⁰⁸⁾

        Items (2) through (6) require some discussion. The person's countable unearned income must be less than the applicable SSI limit. If a person would be ineligible for SSI, based on unearned income alone, he or she cannot be eligible for Medicaid under 1619(b). For example, in a state which does not supplement the 2000 FBR of $512, a private disability pension of $600 per month would make a person ineligible for SSI, without regard to any additional earnings. This person, then, would be ineligible for 1619(b) Medicaid, even if he or she met the rest of the 1619(b) criteria. Similarly, an individual whose resources, after exclusions, exceed $2,000 would be ineligible for 1619(b) Medicaid.⁽¹⁰⁹⁾

        The analysis of the prior month requirement is the same as discussed in the context of 1619(a) above.⁽¹¹⁰⁾ To be initially eligible, a person must have been eligible to receive an SSI check, regular or special, during the past 12 months. A person would lose prior month status for 1619(b) only if he or she went through a period of 12 consecutive months without any entitlement to regular SSI or to benefits under 1619(a) or (b).⁽¹¹¹⁾

        The Medicaid use test should be a fairly easy test to meet in most cases. The use test is met if the person (1) used Medicaid within the past 12 months; (2) expects to use Medicaid in the next 12 months; or (3) would be unable to pay unexpected medical bills in the next 12 months without Medicaid.⁽¹¹²⁾ The criteria in (1) and (2) are fairly straightforward. Most people who really need Medicaid will fit into one of the categories. Furthermore, only individuals with superior medical insurance and great job security will be outside the scope of criterion (3).

        The final criterion under 1619(b) is the "sufficiency of earnings" or financial needs test. This will vary from state to state. To meet this test, one has to have annual gross earnings below a certain "threshold." The purpose of the threshold is to measure whether an individual has sufficient earnings to provide the equivalent of SSI benefits, Medicaid, and publicly funded attendant care.⁽¹¹³⁾ The 1619(b) eligibility thresholds vary greatly from state to state, as the threshold is based on a combination of the state's SSI rate and its annual per capita expenditures for Medicaid.

        There is both a "general threshold," which applies to all individuals in a state, and an "individualized threshold," which will be specific to an individual. A person who meets the other 1619(b) criteria will be eligible for Medicaid if he or she has earnings below the general threshold. If the person's income is above that threshold, he or she may still be eligible if individual expenses are high enough.

        The general threshold is a dollar amount, calculated by adding together a base amount and a Title XIX (Medicaid) amount.⁽¹¹⁴⁾ In New York, this threshold for 1998 was $28,736 (base of $14,940 + Title XIX of $13,796. In other states, the threshold may be higher or lower.⁽¹¹⁵⁾

        If the general threshold is exceeded, 1619(b) eligibility is determined by totaling the following: Medicaid or Title XIX amount from the threshold chart, or actual Title XIX expenses, whichever is higher; blind work expenses; impairment-related work expenses; expenditures under an approved plan for achieving self-support (PASS)⁽¹¹⁶⁾; and publicly funded personal/attendant care that would be lost if the individual lost SSI eligibility. These expenses are then added to the base amount. The sum is the individualized threshold.⁽¹¹⁷⁾ For example, Ms. A has gross earnings of $30,000 and actual Medicaid expenses of $17,000 but no additional expenses in the categories listed above. In New York, since her individualized threshold of $31,940 ($14,940 + $17,000) is greater than her gross earnings ($30,000), Ms. A is eligible for 1619(b) Medicaid.

            2. 1619(b) Eligibility in Medicaid 209(b) States

        In what are commonly referred to as section 209(b) states, the state determines Medicaid eligibility for persons who are aged, blind, or disabled using more restrictive criteria than those of the SSI program. Section 209(b) states are not required to provide automatic Medicaid entitlement for SSI recipients.⁽¹¹⁸⁾

        The law governing section 1619(b) mandates Medicaid coverage in 209(b) states to those who were eligible for Medicaid, under a state's more restrictive criteria, at the time that they sought to become eligible under section 1619.⁽¹¹⁹⁾ This, in effect, becomes the prior month requirement in 209(b) states. Otherwise, the remainder of the 1619(b) criteria, as discussed above, will apply in 209(b) states.

        E. New Ticket to Work/WIIA Provision: Expedited Reinstatement of SSI Benefits Lost Due to Earned Income

        These provisions, like their corresponding SSDI provisions,⁽¹²⁰⁾ are effective January 1, 2001. They will, under certain circumstances, allow for reinstatement of SSI even if the individual has been ineligible for SSI benefits for 12 or more consecutive months. Under these provisions, SSI benefits will be reinstated without a new application if the following criteria are met:

(a) The individual was eligible for SSI;

(b) The individual lost SSI due to earned income (or earned and unearned income) for 12 or more consecutive
       months;

(c) The individual files a request for reinstatement within 60 months of the last month of entitlement, or, if the
      individual files a request for reinstatement after 60 months, the individual establishes good cause for missing
      the 60-month deadline;

(d) The individual's disability is the same as (or related to) the physical or mental disability that was the basis for
      their original claim;

(e) That disability renders the individual incapable of SGA; and

(f) The individual satisfies SSI's non-medical requirements (i.e., SSI's income and resource rules).

VI. The SSI Plan for Achieving Self-Support

        The Plan for Achieving Self-Support (PASS) is discussed in great detail in an easily accessible 1997 article.⁽¹²²⁾ Accordingly, the discussion in this booklet will be much more limited.

        A. General Description of the Plan for Achieving Self-Support

        As noted in part II, above, SSI is a needs-based program. To be eligible for SSI, one's countable income and resources must be limited. The Plan for Achieving Self-Support allows a person with a disability to shelter income and resources, which would otherwise be countable under SSI, when the sheltered money is to be used for some occupational objective.⁽¹²³⁾ By doing so, the person retains SSI, becomes eligible for more SSI, or becomes eligible for SSI as a new applicant.

        The PASS enables an individual to achieve some occupational objective, i.e., self-support, through use of this excluded income and resources. For example, the PASS may enable a person to secure training needed to become self-supporting, to make the transition into employment, or to set up a business.

        B. Criteria for PASS Approval

        The proposed PASS must be submitted to SSA in writing, using SSA Form 545.⁽¹²⁴⁾ Chances for approval are enhanced if great care is taken to document fully, on SSA's form, the person's needs and the viability of the proposal as a means of attaining self-support. Anyone, including the SSI applicant or recipient, can write a PASS. The author recommends involvement of an advocate or other trained specialist in writing the PASS.

        A number of items must be contained in the written PASS:⁽¹²⁵⁾

• a designated occupational objective;
• specific savings/planned disbursement goals directly related to the objective;
• a list of items or activities requiring savings or payments and anticipated amounts;
• a specific period of time for achieving the objective;
• identification and segregation of any money or other resources being accumulated and conserved; and
• a detailed business plan when self-employment is a goal.⁽¹²⁶⁾

        The applicable months of a PASS need not be consecutive. Only months for which the individual is eligible for SSI benefits count toward the time limit. Months for which a person's SSI benefits are suspended do not count toward the limit. Months for which SSA approves a PASS with a goal of "VR Evaluation" count toward the total time of the PASS.⁽¹²⁹⁾

            C. Use of Excluded Income or Resources

        The money set aside under a PASS can be used for anything that can be specifically tied to achieving an occupational objective.⁽¹³⁰⁾ Just as there are limitless ways that people make money, there is no real limit on the types of proposals that can be approved.

        In recent years, there has been an increase in the uses of technology and other creative approaches to allow persons with disabilities to achieve self-support. Advocates should not be shy about encouraging individuals to use the PASS for funding creative approaches to self-support. Legislative history of the 1972 amendments to the Social Security Act indicates that the provision in the law for the PASS should be liberally construed if necessary to accomplish the self-support objective.⁽¹³¹⁾

        The following is a nonexclusive list of uses for the income or resources set aside under the PASS:⁽¹³²⁾

• Attendant care
• Basic living skills training related to the work goal
• Child care
• Costs for room and board when attending educational, training, employment, trade, or business activities
• Dues and subscriptions for publications for academic or professional purposes
• Equipment, supplies, operating capital and inventory required to establish and carry on a trade or business
• Equipment/tools either specific to the individual's condition or designed for general use
• Meals consumed during work hours
• Operational or access modifications to buildings, vehicles, etc., to accommodate disabilities
• Tuition, books, supplies and all fees and costs imposed by or in connection with an educational or occupational training facility including tutoring, testing, counseling, etc.
• Uniforms, specialized clothing, safety equipment and appropriate attire (e.g., suits and dresses) for job interviews or working in an office or professional setting
• Maintenance costs for any of the above items
• Transportation costs, including: lease, rental or purchase of vehicle, subject to the limitations on installment payments,⁽¹³³⁾ public transportation and common carriers; fuel costs, registration fees and initial cost of insurance premiums
• Job coaching/counseling services
• Job search or relocation services
• Preparation fees for developing a PASS (but fees for monitoring a PASS are not allowed)
• Taxes and government-imposed user fees (e.g., permits, licenses) connected with obtaining any of the above
• Finance and service charges connected with obtaining any of the above

        D. How the PASS Budgeting Works

        The easiest way to understand how the PASS works is to give a simple example. Take the case of John, a 42-year old man with multiple sclerosis who is wheelchair-dependent. John is completing his first year of a four-year college program to become an elementary education teacher. His sole source of income is $550 per month in SSDI benefits.

        John needs a specially modified van in order to pursue full-time employment after graduation. Part of his tuition, as well as special transportation to and from school, is currently paid through his state's Vocational Rehabilitation (VR) agency. If he buys a van, the VR agency has agreed to pay for most, if not all, of the special modifications needed.⁽¹³⁵⁾

        John decides to set up a PASS to help fund the purchase of a van, depositing $530 of his monthly SSDI check into a specially designated account. As noted above, under SSI regulations and policy, John can save money under an approved PASS for up to 48 months, or for a longer period if individually approved. In this case, John chose a period of 36 months for the PASS.⁽¹³⁶⁾ He will then use the money toward purchase of a van, in order to pursue a defined occupational objective. Under SSI regulations, the money in the special bank account will not be considered a countable resource.⁽¹³⁷⁾ Thus, in 36 months' time, John will be able to accumulate $19,080 plus interest.

        In a state that pays the 2000 FBR, with no state supplement, this is how John's SSI check would be calculated:

        Total Income:                                                                     Total Expenses for PASS:

        $550 unearned                                                                                  $530 per month
           $ 0 earned

        SSI Calculation:

        $550  Unearned income
        - 530  PASS expense
            20
          - 20  Unearned income exclusion

           $ 0  Total countable income

        $512  SSI federal benefit rate
            - 0  Countable income

          $512 Total SSI check

        In the above example, the PASS will enable John to achieve a number of things:

• accumulation of more than $15,000 toward the purchase of a vehicle;
• the leveraging of $10,000 or more from his state VR agency to pay for van modifications;
• maintenance of monthly income at or near the same level;
• automatic eligibility for Medicaid in most states;
• potential eligibility for section 1619(a) SSI benefits and section 1619(b) Medicaid when he finds employment; and
• under various public and subsidized housing programs and the food stamp program, ability to disregard income set aside under a PASS.⁽¹³⁸⁾

        Since the PASS is a method for sheltering otherwise countable income and resources, it is only available to individuals who have or expect to have income or resources that will affect SSI eligibility. A person who gets SSI only, with no other source of earned or unearned income and no excess in cash resources, is not a candidate for a PASS.

        Persons who receive significant unearned income, like John in the hypothetical case above, make excellent PASS candidates. By putting income like SSDI, veteran's benefits, or private pension benefits into a PASS, the individual simply trades these benefits for SSI eligibility. This may translate into retention of SSI benefits, an increase in the benefit level, or first-time eligibility. Persons with significant earnings from employment can also use the PASS as a means to obtain, retain, or increase SSI eligibility.

        F. Using "Deemed Income" to Fund a Vocational Objective: PASSes for Spouses and Children

        If the income of a spouse or parent is high enough, a part of that income will be considered available to the SSI applicant or recipient. In determining the SSI eligibility of a married person, part of the income of an ineligible spouse is deemed available to and considered as income of that married person. Similarly, part of the income of an ineligible parent is deemed available to and considered as income of a child under 18 years old.⁽¹³⁹⁾ Like any other form of income that is considered available to an SSI recipient, deemed income can be used to fund items in a PASS.

        Consider the case of Cynthia, a 16 year old with cerebral palsy. She was getting a full $512 SSI check until her mother went to work. The countable deemed income is now $50 over the monthly limit for SSI -- i.e., $562 per month. Accordingly, Cynthia will no longer be eligible for SSI.⁽¹⁴⁰⁾

        A PASS is proposed to put $562 of the mother's monthly wage into an account to save for college to prepare Cynthia to become an engineer. When the PASS is approved, the deemed income will no longer be counted by SSI and Cynthia will qualify once again for a $512 SSI check. She will also qualify for Medicaid automatically if she lives in one of 39 states. If Cynthia saves this money for two full years, or until deeming stops on her eighteenth birthday,⁽¹⁴¹⁾ she will be able to save $12,000 or more in her college fund. She may also wish to put into the PASS account any lump sum she received for retroactive eligibility if she was recently approved for SSI following an appeal.

        In Cynthia's case, the PASS can also be used to fund any number of other items which specifically relate to her long-term vocational goal. For example, she may wish to save money toward specially adapted computer equipment or a specially designed school desk and seating system.

        Unfortunately, the PASS has been ignored as a way to use deemed income to fund items related to a person's vocational goal. For example, based on statistics compiled by SSA, as of September 1999 there were only seven PASSes in existence nationwide for children under age 18. ⁽¹⁴²⁾ It is unclear if any of them involved the use of deemed income to fund the child's vocational goal. Hopefully, that number will go up dramatically as we all look to the PASS as an option for children under age 18.

        G. Strategy Tip: Use of the PASS to Gain Access to 1619(b) Medicaid

        For a person like John in the hypothetical case above, retention of Medicaid may be a prerequisite to continued employment. John may, depending on his state's Medicaid Plan, use Medicaid to pay for home health care and a wide range of assistive technology devices. Unfortunately, as a recipient of SSDI only, if John begins earning at a $700 SGA level, he will lose his benefits after a trial work period.⁽¹⁴³⁾ If he then applies for SSI as a new applicant, he will be denied because he is performing SGA.⁽¹⁴⁴⁾ A timely PASS application can help John avoid this dilemma.

        If John is contemplating employment, he must submit his PASS proposal and SSI application in a month before he starts performing SGA. By doing so, he ensures his continued eligibility for SSI under 1619(a) when he starts earning above the $700 level.⁽¹⁴⁵⁾ Later, if he loses SSI eligibility because of his budgeted earned income, he will have established his "prior month" linkage for 1619(b) eligibility.⁽¹⁴⁶⁾

        H. Amendment, Abandonment, or Termination of PASS

        An amendment to an approved PASS is allowed under SSI policy.⁽¹⁴⁷⁾ Since SSI's regulations and POMS manual are silent on the number of amendments allowed, the assumption is that a PASS can be amended any number of times. Amendment may be needed in a number of situations: e.g., when a person finds a job and now has more income; when a person changes vocational goals and needs to spend money on different items; or when other changes in circumstances will affect compliance with the original PASS.

        SSI will begin to count income and resources that would have been excluded under a PASS if (1) the plan is abandoned; (2) conditions of the plan are not followed; (3) the plan is completed; or (4) the goal of the plan is achieved.⁽¹⁴⁸⁾

        The SSI regulations are silent on what happens with accumulated savings when a PASS is abandoned, terminated, or completed. The POMS indicates that resources will start counting in the month following termination of the plan.⁽¹⁴⁹⁾

I. A Note of Caution

        PASS development and writing can be very rewarding work. It also brings with it special challenges. The advocate who assists with a PASS proposal, must be prepared to assist the individual with what is now a 14-page PASS form, including explanatory attachments. Although the form has become more user-friendly, completing it requires considerable work.

        Advocates who plan to assist individuals in preparation of PASS proposals, must be prepared to review with their client or consumer the interrelationship of a number of regulations and policies within SSI and SSDI. They must also be prepared to discuss (or refer the individual to someone who can discuss) the availability of other sources of government assistance (e.g., vocational rehabilitation agency funding, educational loans, and grants) and the effect that the PASS may have upon eligibility for various governmental entitlements (e.g., public and subsidized housing, food stamps, etc.).

VII. The Special Need for Community Outreach and Education

        If you work for an advocacy agency or other community-based agency that intends to have extensive involvement with work incentives, you will have only limited success without an organized community outreach and education plan. Experience suggests that individuals with disabilities will not come to us in great numbers on these issues, so we must go to them. The agency must be willing to commit the time and resources necessary to inform persons with disabilities of their rights. Hopefully, funding available through the Work Incentives Outreach Program of the Ticket to Work/WIIA⁽¹⁵⁰⁾ will provide resources necessary for many advocacy and other community-based agencies to reach out to those who need this information.

        The work incentive issues and potential strategies for using the work incentive should, whenever possible, be identified very early on in the rehabilitation process -- well before any employment is started. It is important, then, that the advocacy agency plan to reach out to and educate the critical actors in this rehabilitation process: the person with a disability, his or her family, the rehabilitation counselor, the special educator, and any other provider of services who regularly assists persons with disabilities. The agency will need to identify these people and to make efforts to reach and educate them. Workshops, mailings, and use of the media can be tools for achieving these ends. It is the author's experience that there is a great thirst for knowledge in this area and, as a result, such efforts will be well received.

VIII. Conclusion

        This booklet has sought to provide a comprehensive overview of the wide range of work incentives available through SSDI, SSI, Medicare, and Medicaid. It has also emphasized the use of the work incentives to fund a wide range of specialized services and assistive technology to allow persons with disabilities to work.

        This booklet has also provided the reader with a "heads up" regarding the provisions of the Ticket to Work and Work Incentives Improvement Act of 1999 which was signed by the President on December 17, 1999. We have integrated several of the Act's key provisions into the text above and the attached Appendix provides a more comprehensive summary of most of the major provisions of the Act. It is important for the reader to be aware, however, that the provisions of Ticket to Work/WIIA will become much more definitive as SSA begins to implement it through regulations.

        Full-time disability advocates must be aware of the work incentives if they want to assist persons with disabilities to achieve independence and economic self sufficiency. Far too many of us have traditionally assumed that our job as an advocate is over when our client or consumer has established his or her initial or continued entitlement to SSDI or SSI. Some of us have even gone so far as to discourage individuals with disabilities from working, fearing that any work activity may trigger a termination of benefits. Instead of discouraging work activity, the advocate should assist the individual to understand the potential impact of work on benefits. The individual with a disability can then choose what steps to take based on that information.

        We cannot, of course, ignore the potential loss of disability benefits that could result from one's work activity. With the exception of the individual whose condition continues to meet a Social Security "listing," we are unable to guarantee that benefits will never be terminated under the medical improvement standards. It is possible, however, to ensure full utilization of the many incentives available under SSDI, SSI, Medicare, and Medicaid for the individual who is moving toward competitive employment.
 

This Act was signed by President Clinton on December 17, 1999. Many provisions will not become effective until the year 2001 or later, and many details of these provisions will appear in regulations to be enacted during 2000 or later. When enacted, the regulations should provide detail that is missing in the Act.

I.    Ticket to Work and Self-Sufficiency [Title I]

    A.    The effective date is January 1, 2001, with phase-in at sites throughout the country. Full implementation is required in every state not later than January 1, 2004.

    B.    SSA must enact regulations no later than December 17, 2000.

    C.    SSA will issue tickets to SSDI or SSI beneficiaries "to obtain employment services, vocational rehabilitation services, or other support services from an employment network which is of the beneficiary's choice ...."

    D.    A state vocational rehabilitation (VR) agency may elect to participate as an employment network.

1. Services provided will be governed by Title I of the Rehabilitation Act. The current mandates under federal law and regulations, including all of the due process appeal requirements, will apply to tickets administered by that agency.
2. Services provided by other networks are not governed by Title I. It is not clear whether SSA's regulations will incorporate any of the Title I mandates.
3. Pending full implementation of these provisions in a state, a state's VR agency will have the "right of first refusal" to provide employment network services.

1. A special concern: The Act does not mandate a due process hearing, similar to the hearing authorized under Title I of the Rehabilitation Act. The Act provides only that "[SSA] shall afford a party to such a dispute a reasonable opportunity for a full and fair review of the matter in dispute."
2. Advocates anxiously await SSA's enactment of regulations on dispute resolution, expected to come out in proposed form (i.e., published in the Federal Register, with public comment invited) during the first half of 2000.

    G.    Services are to be provided under Individual Work Plans (IWPs) which must include specific reference to:

1. The vocational goal developed with the beneficiary, including, as appropriate, goals for earnings and job advancement;
2. Necessary services and supports, and any terms and conditions related to their provision; and
3. The beneficiary's rights (such as the right to retrieve a ticket if the beneficiary is dissatisfied with the services of the employment network) and remedies available to the individual, including information on the availability of Protection and Advocacy services to resolve disputes.

1. The "outcome payment system" is a schedule of monthly payments (based on a fixed percentage formula), during a beneficiary's "outcome payment period," for which SSI or SSDI benefits are not payable because of earnings.
2. The "outcome milestone payment system" provides for one or more milestones that are directed toward the goal of permanent employment.

1. This forms a part of a payment structure that provides, in addition to payments made during the outcome payment periods, earlier payments based on the attainment of milestones.
2. It is set up so that the total payments to the network, for each beneficiary, is less than it would be if the network were paid under the outcome payment system.
3. The network that opts for the outcome milestone system will have a greater assurance of a regular, predictable cash flow compared to the potentially higher payments from the outcome payment system.

1. It begins with the 1^st month, following assignment of the beneficiary's ticket to the network, for which SSDI benefits are not payable because the person is performing substantial gainful activity or SSI benefits are not payable because of earnings from work activity.
2. It ends with the 60^th month (consecutive or otherwise) for which SSDI or SSI benefits are not payable because the person is performing SGA or because of earnings from work activity.

4.  SSA must periodically review and, if necessary to create sufficient incentives to make the Ticket system work, revise the outcome payment formulas and the number of milestone payments available.

    J.    Suspension of continuing disability reviews (CDRs): During the period for which a beneficiary is using a ticket, SSA may not initiate a CDR or similar review to determine if the individual is no longer disabled.

    K.    The Act requires ongoing, independent evaluations of the Ticket program.

II.    The Ticket to Work and Work Incentives Advisory Panel

A.    This 12-member panel will advise the President, Congress, and SSA on issues related to work incentives programs, planning, and assistance.

B.    Who appoints members? President - 4; Speaker of the House - 2; Minority leader of  House - 2; Majority leader of Senate - 2; Minority leader of Senate - 2.

C.    A majority of members must be persons with disabilities, or their representatives, with consideration given to current or former SSDI or SSI recipients.

D.    The panel must submit interim reports to the President and Congress at least annually. A final report is due not later than eight years after the Act becomes law. The report is to include recommendations for legislation and administrative actions.

A.    Work-triggered continuing disability reviews (CDRs) will be eliminated effective January 1, 2002 for persons who have received SSDI benefits for at least 24 months.

B.    No CDR may be scheduled solely as a result of the individual's work activity.

C.    No work activity may be used as evidence that the individual is no longer disabled and no cessation of work activity may give rise to a presumption that the individual is unable to engage in work.

D.    Persons affected by this section will still be subject to regularly scheduled CDRs that are not triggered by work activity and will be subject to termination of benefits if they perform substantial gainful activity by earning more than $700.

IV.    Expedited Reinstatement of Disability Benefits [section 112]

A.    These "Easy Off, Easy On" provisions are effective January 1, 2001.

B.    SSDI benefits shall be reinstated without a new application:

1.    If the individual was eligible for SSDI;

2.    The individual lost SSDI due to performance of SGA;

3.    The individual files a request for reinstatement within 60 months of the last month of entitlement, or, if the individual files a request after 60 months, the individual establishes good cause for missing the 60-month deadline;

4.    The individual's disability is the same as (or related to) the physical or mental disability that was the basis for their original claim; and

5.    That disability renders the individual incapable of SGA.

6.    SSDI dependent's benefits may be reinstated if the dependent satisfies all of the requirements for entitlement to the benefits, except requirements relating to the filing of an application.

1.    The individual was eligible for SSI on the basis of a disability or blindness;

2.    The individual became ineligible for SSI due to earned income (or earned and unearned income) for 12 or more consecutive months;

3.    The individual files a request for reinstatement within 60 months of the last month of entitlement;

4.    The individual's disability is the same as (or related to) the physical or mental disability that was the basis for their original claim;

5.    That disability renders the individual incapable of SGA; and

6.    The individual satisfies SSI's non-medical requirements (i.e., SSI's income and resource

7.    A disabled spouse's benefits will be reinstated if: the spouse was previously an eligible spouse of the individual; and the spouse satisfies all the eligibility requirements, except the requirement for filing of an application.

D.    "Provisional benefits" pending reinstatement

1.    While the SSDI or SSI reinstatement application is pending, the individual is eligible for up to six months.

2.    If SSA eventually determines that the individual was not entitled to reinstatement, any resulting overpayment cannot be recovered unless SSA determines that the individual knew or should have known that he or she did not meet the reinstatement requirements.

A.    This will be a community-based work incentives planning and assistance program established through grants, cooperative agreements, and contracts.

B.    Up to $23 million is allocated for each fiscal year, 2000 through 2004.

1.    Money will be disbursed by SSA through a competitive process, based on the population of SSDI and SSI beneficiaries within a state.

2.    Grants, cooperative agreements, and contracts awarded will range between $50,000 and $300,000.

C.    Who qualifies for funding?

1.    Any public or private agency or organization qualifies.

2.    Specifically mentioned in the Act, as eligible for funding, are Centers for Independent Living, Protection and Advocacy Organizations, Client Assistance Programs, and State Developmental Disability Councils.

D.    What services are to be provided by a funded program?

1.    A program is expected to "select individuals who will act as planners."

2.    "Planners" will provide information, guidance, and planning to SSDI and SSI beneficiaries regarding:

a.    Federal and state work incentive provisions;

b.    Adequacy of health insurance benefits offered by an employer; and

c.    Preparation and dissemination of written information explaining work incentives.

E.    Establishment of complimentary resources within SSA

1.    SSA must establish its own "corps of trained, accessible, and responsive work incentive specialists ... who will specialize in [SSDI and SSI] work incentives ... for the purpose of disseminating accurate information ..."

2.    SSA is also required to provide training and technical assistance to the private agencies receiving funding under this section.

A.    SSA is authorized, but not required, to fund each state's Protection and Advocacy (P&A) System to provide "work incentives assistance" to SSDI and SSI beneficiaries

B.    The Act is vague about what services are authorized under this new program. It states only that services may include:

1.    "[I]nformation and advice about obtaining vocational rehabilitation and employment services"; and

2.    "[A]dvocacy or other services that a disabled beneficiary may need to secure or regain employment."

C.    Funding available:

1.    $7 million per year is authorized for fiscal years 2000 through 2004.

2.    In states, including the District of Columbia and Puerto Rico, the minimum annual payment for a P&A is $100,000.

3.    In Guam, American Somoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands, the minimum annual payment for the P&A is $50,000.

A.    Background: This optional program was created by section 4733 of the Balanced Budget Act Amendments of 1997.

1.    Subject to federal criteria, a state can structure the buy-in as it sees fit.

2.    Largely due to fears of rising Medicaid costs, fewer than 10 states had initiated or were in the process of initiating buy-in programs through the date the Act was signed.

3.    A "buy-in" is designed to provide health insurance to working people with disabilities who, because of relatively high earnings, cannot qualify for Medicaid under another provision.

4.    Key federal eligibility criteria for Buy-In

a.    Eligible individuals must be in a family whose net income is less than 250 percent of the federal poverty level. A single individual is in a family of one.

b.    Except for the individual's earnings, the person would be considered disabled and eligible for SSI benefits.

c.    Each state determines its own definition of a "family."

d.    All SSI exclusions apply to the determination of family income, including the earned income exclusions.

e.    Individuals are not required to have been on SSI to be eligible for this new Buy-In provision.

f.    The State must make a disability determination if an individual was not an SSI recipient.

g.    Substantial gainful activity (i.e., earnings in excess of $700 monthly) is not an eligibility consideration.

h.    States can increase the resource limits to as high as $14,000. States, at their option, can charge premiums or other cost-sharing charges.

B.    How the Act changes the current Buy-In program

1.    One option builds on the existing provision and allows states to offer a Medicaid buy-in to persons with disabilities who work and have earnings greater than 250 percent of the poverty level.

a.    Participating states will be allowed to set income limits and require cost-sharing and premiums, based on income, on a sliding scale. A state could require some individuals to pay the full premium as long as the premiums do not exceed 7.5 percent of the individual's total income.

b.    States must require a 100 percent premium payment for individuals with adjusted gross incomes greater than $75,000 unless states choose to subsidize the premium using their own funds.

2.    A second option allows states to cover individuals who continue to have a severe disability, but lose eligibility for SSI or SSDI because their medical condition improves.

A.    This provision is effective October 1, 2000.

B.    Background: Under existing law, an SSDI recipient is entitled to continued Medicare coverage during a nine-month trial work period and for an additional 39 consecutive months following the ninth trial work month.

1.    During this entire period (48 months), Medicare Part A coverage is automatic.

2.    During this entire period, Medicare Part B continues to be optional and subject to premium payment ($45.50 per month in 2000).

C.    The new law extends Medicare eligibility for an additional 54 months.

A.    Extension of SSDI demonstration project authority [section 301]

1.    Currently, SSA has authority to conduct SSI demonstration projects, in which certain SSI rules will be waived to determine if the rule change will make the individual more likely to work. Similar SSDI authority expired in 1996.

2.    These provisions reestablish SSA's demonstration or waiver authority to test new work incentives for SSDI recipients designed to encourage them to work.

3.    SSA is authorized to develop and carry out "experiments and demonstration projects" under specific categories:

a.    Testing alternative methods of treating the work activity of SSDI beneficiaries, including reductions in benefits based on earnings.

b.    Altering "other limitations and conditions" that apply to SSDI beneficiaries, such as:

(1)    Lengthening the trial work period;

(2)    Shortening the 24-month waiting period for Medicare benefits;

(3)    Earlier referral of recipients for vocational rehabilitation; and

(4)    Making greater use of employers and others to develop, perform, and otherwise stimulate new forms of rehabilitation.

c.    Implementing sliding scale benefit offsets using variations in:

(1)    The amount of the offset as a proportion of earned income;

(2)    The duration of the offset period; and

(3)    The method of determining income earned by beneficiaries.

4.    Authority to waive compliance with benefits requirements

a.    SSA is authorized to waive compliance with any SSDI provisions for demonstration projects.

b.    The Department of Health and Human Services is authorized to waive compliance with any Medicare provisions as necessary for demonstration projects.

B.    SSDI demonstration projects based on benefits reduction formulas [section 302]

1.    SSA is required to conduct demonstration projects to evaluate a program under which SSDI benefits are reduced by $1 for each $2 of a beneficiary's earnings "that is above a level to be determined by the Commissioner."

2.    Authority to waive compliance with benefits requirements

a.    SSA is specifically authorized to waive compliance with any SSDI provisions for demonstration projects.

b.    The Department of Health and Human Services is authorized to waive compliance with any Medicare provisions as necessary for demonstration projects.

1. See 42 U.S.C. §§ 402(d), (e), (f), 423 and 1381 et seq. SSDI will be used to refer to all Social Security disability benefit categories, including disability insurance benefits, child's insurance benefits, and widow's/widower's insurance benefits.

2. This booklet borrows heavily from two other publications. See Edwin J. Lopez-Soto et al., Benefits Management for Working People with Disabilities: an Advocate's Manual (Edwin J. Lopez-Soto & James R. Sheldon, Jr. eds., Greater Upstate Law Project 2000); J. Sheldon, Work Incentives for Persons with Disabilities Under the Social Security and SSI Programs, 28 Clearinghouse Rev. 236 (July 1994). To the extent that sections of either publication are reproduced, it is done with permission.

3. See 42 U.S.C. § 1382h(d).

4. See parts III.B.3, III.B.4, IV.D.4, IV.D.5.c. and V.E, below.

5. See part III.A, below.

6. See part V.B, below.

7. 42 U.S.C. §§ 1395 et seq.

8. Id. §§ 426(b), 426-1, 1395c, 1395rr; 42 C.F.R. § 406.13(b).

9. 42 U.S.C. § 1395d.

10. 42 U.S.C. §§ 1395j, 1395k.

11. See 42 U.S.C. §§ 1396 et seq.

12. Id. § 1396a(a)(10)(A)(i).

13. Id. § 1396a(f).

14. Social Security Program Operations Manual System (POMS) SI 01715.020.

15. 20 C.F.R. §§ 404.1574, 416.974; Social Security Ruling (SSR) 83-33; POMS DI 10501.000 et seq. For self-employed persons, see 20 C.F.R. §§ 404.1575, 416.975; SSR 83-34; POMS DI 10505.001 et seq. and 10510.001 et seq. The substantial gainful activity amount was increased from $500 to $700 per month, effective July 1, 1999.

16. See 20 C.F.R. §§ 404.1520(a), 416.920(a). As noted below, the $700 SGA rule will apply to SSDI applicants and recipients. It does not apply to SSI recipients.

17. Id.. §§ 404.1574(b)(3), (b)(6), 416.974(b)(3), (b)(6).

18. 20 C.F.R. § 416.984.

19. Spragens v. Shalala, 36 F.3d 947 (10^th Cir. 1994).

20. See parts III.B.3. and 4, below.

21. For a more thorough discussion, see Benefits Management for Working People with Disabilities: an Advocate's Manual, note 2, above, ch. 9.

22. See 42 U.S.C. § 421(i); 20 C.F.R. §§ 404.1590(d), 416.990(d).

23. 42 U.S.C. §§ 423(f), 1382c(a)(4).

24. See 20 C.F.R. Part 404, Subpart P, App. 1.

25. Id. See specifically Listings 2.02, 2.03 (legal blindness), 2.08 (hearing impairments), 11.07 (cerebral palsy), 11.09 (multiple sclerosis), and 12.05 (mental retardation).

26. Benefits can still be terminated, without medical improvement, if an SSDI recipient performs SGA by earning $700 per month following a trial work period. See parts III.A, above, and IV, below).

27. 20 C.F.R. 404.1590(b)(4). Since there is no trial work period in the SSI program, there is not an automatic work-triggered CDR for SSI recipients.

28. Ticket to Work/WIIA § 111. As this booklet went to press, the new Act was not yet codified as part of title 42 of the United States Code.

29. Ticket to Work/WIIA § 101.

30. 42 U.S.C. §§ 425(b), 1383(a)(6). This is often referred to as the "section 301" provision because it was enacted by Congress as section 301 of the Social Security Amendments of 1980.

31. See 29 U.S.C. §§ 720 et seq. Title I of the Rehabilitation Act provides funding for state vocational rehabilitation programs.

32. Pub. L. 101-508, § 5113. See POMS DI 60050.001 et seq. concerning SSA's policy for approving non-state vocational rehabilitation programs on a case-by-case basis.

33. 20 C.F.R. §§ 404.316(c), 416.1338.

34. See SSA Emergency Instructions, EM-99079 (Aug. 10, 1999)

35. ³⁵As will be discussed in part V.B, below, the $700 rule does not apply to the SSI recipient. The $700 rule does, however, still apply to SSDI applicants and recipients. Thus, there is a need to analyze the SSDI and SSI programs separately.

36. 20 C.F.R. §§ 404.1520(a), (b), 416.920(a), (b).

37. 20 C.F.R. § 404.1574(b)(2)(emphasis added).

38. 20 C.F.R. § 404.1573. See Goldstein v. Harris, 517 F.Supp. 1314, 1317 (S.D.N.Y. 1981).

39. See, e.g., Boyes v. Secretary of HHS, 46 F.3d 510, 512 (6^th Cir. 1995); Corrao v. Shalala, 20 F.3d 943, 948 (9^th Cir. 1994); Payne v. Sullivan, 946 F.2d 1081, 1083 (4^th Cir. 1991); Thompson v. Sullivan, 928 F.2d 276, 277 (8^th Cir. 1991); White v. Heckler, 740 F.2d 390, 394 (5th Cir. 1984); Case v. Sullivan, 810 F.Supp. 52, 56-57 (W.D.N.Y. 1992)(presumption rebutted by evidence that plaintiff's performance of his managerial duties during the period in question was very unsatisfactory); Goldstein v. Harris, above, 517 F.Supp. at 1317.

40. SSR 83-33; SSR 83-35; POMS DI 10505.015.

41. Conley v. Bowen, 859 F.2d 261 (2d Cir. 1988)(the SGA amount was $300 when this case was decided); Social Security Acquiescence Ruling 93-2(2), Second Circuit (May 17, 1993). See 20 C.F.R. § 404.1574(b)(2), providing that earnings which have "averaged more than $700 per month" will ordinarily show that a person has engaged in SGA.

42. See Acquiescence Ruling 93-2(2), above, pp. 3-4; POMS DI 13010.210 E.2.

43. 859 F.2d at 265.

44. 20 C.F.R. §§ 404.1574(a)(1), 416.974(a)(1); POMS DI 11010.210; SSR 84-25.

45. SSR 84-25.

46. POMS DI 11010.215 C.

47. 20 C.F.R. §§ 404.1574(a)(2), 416.974(a)(2); SSR 83-33; POMS DI 10505.010 A.

48. 20 C.F.R. §§ 404.1574(a)(3), 416.974(a)(3); SSR 83-33.

49. See, e.g., Scott v. Commissioner of Social Security, 899 F.Supp. 275, 279 (S.D. W.Va. 1995)(finding probable existence of a subsidy where job was created by family members and only job requirement was to answer the telephone for 12 hours per week).

50. SSA Regional Program Circulars, New York Region 91-1 (Feb. 8, 1991) and 90-3 (June 11, 1990).

51. SSA Regional Program Circular, New York Region 91-1, p. 3 (Feb. 8, 1991).

52. ⁵²This is the way SSA would treat job coach services paid for by the worker if the worker is claiming the amount as an impairment related work expense. SSA Regional Program Circular, New York Region 90-3, p. 2. This would be the most rational measure of the job coach subsidy since it measures the true cost of the therapeutic or rehabilitative intervention.

53. In Nazzaro v. Callahan, 978 F.Supp. 452, 460-61 (W.D.N.Y. 1997), the court held that there is no support in the regulations for a finding that job coach services can amount to a subsidy. In settling the case on appeal, however, SSA agreed to apply Regional Program Circular 90-3 and determine whether a subsidy exists and its value. Thereafter, on September 27, 1999 the administrative law judge (ALJ) issued a decision finding that "[t]he claimant is unable to engage in substantial gainful activity on a sustained basis without the assistance and support of a job coach." Without specifically going through the math for each month, the ALJ reasoned: "The cost of the claimant's job coach, if deducted from his wages, would have reduced his earnings to less than a substantial gainful activity level." Two other New York ALJs have issued similar decisions, multiplying the job coach hours by the job coach hourly cost to determine the amount of the subsidy.

54. 42 U.S.C. § 12112.

55. 29 U.S.C. § 794(a).

56. See Nelson v. Thornburg, 567 F. Supp. 369 (E.D. Pa. 1983), aff'd without opinion, 732 F.2d 146 (3rd Cir. 1984), cert denied, 469 U.S. 1188 (1985).

57. 20 C.F.R. §§ 404.1575(c), 416.975(c); SSR 83-34.

58. 20 C.F.R. §§ 404.1576, 416.976; SSR 84-26; POMS DI 10520.010-.065, SI 00820.540 B.5. and .550, SI 00840.121 and .135.

59. 20 C.F.R. §§ 404.1576(b)(3), 416.976(b)(3). If the expense was paid by the employer or some third person, the expense may qualify as a subsidy in some circumstances. See part IV.B.1, above.

60. SSR 84-26.

61. 20 C.F.R. §§ 404.1576(c)(5)(ii), 416.976(c)(5)(ii).

62. 42 U.S.C. § 422(c); 20 C.F.R. § 404.1592; POMS DI 13010.035 et seq. See 20 C.F.R. § 404.1585, concerning the trial work period for persons age 55 or older who are legally blind.

63. ⁶³There is no trial work period in the SSI program. This is because the $700 SGA rule does not apply to SSI recipients.

64. 20 C.F.R. § 404.1592(a).

65. Id. § 404.1592(b).

66. See 42 U.S.C. § 422(c); POMS DI E13010.035 et seq.

67. See 20 C.F.R. § 404.1592(c)(providing that a person can have only one trial work period during a period of entitlement to cash benefits).

68. 20 C.F.R. §§ 404.1592(e), 404.1592a(a); POMS DI 13010.210.

69. 20 C.F.R. § 404.1592(e)(2). See part II.B.2, above, concerning the medical improvement standard.

70. 20 C.F.R. § 1592a; POMS DI 13010.210 et seq.

71. 20 C.F.R. § 404.1592a.

72. POMS DI 13010.210.

73. The new "expedited reinstatement" provisions of Ticket to Work/WIIA, effective January 1, 2001, may allow Mary to reestablish SSDI eligibility without a new application. See part IV.B.4, below.

74. 20 C.F.R. § 404.1576(e)(1).

75. Ticket to Work/WIIA § 112.

76. See part IV.B.3, above.

77. The reinstatement provisions would appear to offer relief from SSA's current policy that would preclude use of income averaging for a person who performs one month of SGA after the extended period of eligibility. See part IV.B.3, above. Under these new provisions, a person's SSDI benefits can be reinstated when their work attempt fails or job ends.

78. 42 U.S.C. § 1395k.

79. 42 U.S.C § 426(b); POMS HI 00820.025.

80. Ticket to Work/WIIA § 202.

81. 42 U.S.C. § 1395i-2a; POMS HI 00801.170.

82. 20 C.F.R. § 416.920(a), (b); POMS SI 02302.010 A.2.a.

83. See part IV, above.

84. 20 C.F.R. § 416.984.

85. 20 C.F.R. §§ 416.974(a)(2), 416.975(c), 416.976.

86. See part IV.B.; 20 C.F.R. § 416.974(b)(2); SSR 83-35; SSR 84-25.

87. Pub. L. No. 99-643, §§ 2-7.

88. 42 U.S.C. § 1382h.

89. See POMS SI 02302.001 A.

90. 20 C.F.R. § 416.262.

91. 42 U.S.C. § 1382h(a)(1).

92. POMS S1 02302.010 B.3, .006 B.2.f, .006 B.5.

93. The apparent benefit of the $65 plus 50 percent exclusion rule for earned income may be offset by other expenses in individual cases, including costs related to transportation expenses or child care. The benefit of the exclusion can also be offset by a loss of other government benefits which are affected by changes in income. Federal housing subsidies, food stamps, and welfare benefits for the family of an SSI recipient are just some examples of other benefits that could be affected.

94. 20 C.F.R. §§ 416.1110, 416.1120.

95. Id. § 416.1124(c)(12).

96. Id. § 416.1112(c)(4), (5) and (7).

97. See note 93, above, explaining that the SSI recipient's net gain could be affected by individual circumstances.

98. See part III.A, above.

99. See part IV.C.3.

100. 20 C.F.R. § 416.1112(c)(6).

101. See part V.D, below.

102. 20 C.F.R. § 416.1112(c)(3); POMS SI 00820.510.

103. 20 C.F.R. § 416.1112(c)(8); POMS SI 00820.535 et seq.

104. See POMS SI 00820.555.

105. Tanya will pay a higher Social Security tax rate because she is self employed.

106. Tanya has a distinct advantage in taking all of the listed expenses as BWEs, rather than as business-related deductions. As previously noted, the individual realizes a dollar-for-dollar increase in the SSI check for BWE expenditures. By contrast, for business-related expenses, like IRWE expenditures, there is a 50 cent increase in the SSI check for every $1 spent.

107. 42 U.S.C. § 1382h(b)

108. POMS S1 02302.010 B.

109. 20 C.F.R. § 416.1205(c).

110. See part V.B, above.

111. POMS SI 02302.010 D.

112. POMS S1 02302.040 B.

113. POMS S1 02302.045.

114. Id.

115. The charted thresholds for each state are published in POMS S1 02302.200. In recent years the thresholds have rarely been published on a timely basis. When the author checked with SSA in late December 1999, the updated thresholds for 1999 had still not been issued. The reader is advised to check with SSA for the most updated figure that appears in the POMS for your state and apply that figure in determining 1619(b) eligibility.

116. In the 39 states in which an SSI recipient automatically qualifies for Medicaid, an approved PASS would ensure SSI eligibility and, with it, automatic Medicaid eligibility. See part VI, below.

117. POMS SI 02302.050 C. An individualized threshold calculation worksheet can be found at POMS SI 02302.300.

118. 42 U.S.C. § 1396a(f). See part II.D, above for a listing of the section 209(b) states.

119. 42 U.S.C. § 1382h(b)(3); POMS SI 02302.010 C.

120. See part IV.D.4, above.

121. So long as the person retained 1619(b) Medicaid status during the period of ineligibility for SSI cash benefits, the person can reestablish SSI eligibility when earnings are reduced without the need to access the expedited reinstatement provisions.

122. See James R. Sheldon, Jr. & Edwin J. Lopez-Soto, PASS: Supplemental Security Income's Plan for Achieving Self Support, 30 Clearinghouse Rev. 1101 (Mar.-Apr. 1997). See also, Benefits Management for Working People with Disabilities: an Advocate's Manual, note 2, above, ch. 4 (containing up-to-date citations and forms).

123. 42 U.S.C. §§ 1382a(b)(4)(A)(iii) and (B)(iv), 1382b(a)(4); 20 C.F.R. §§ 416.1180 et seq.; POMS SI E00870.001 et seq. All references are to the POMS issued in April 1996, as supplemented in December 1996.

124. 20 C.F.R. § 416.1181.

125. 20 C.F.R. § 416.1181; POMS SI E00870.001 C.

126. POMS SI E00870.006 D.7.

127. ¹²⁷20 C.F.R. § 416.1181(d).

128. POMS SI E00870.006B.

129. POMS SI E00870.006B.4.

130. 20 C.F.R. § 416.1181(e); POMS S1 E00870.025 C.4.g.

131. Pub. L. No. 92-603, 1972 U.S. Code Cong. & Admin. News 4989, 5138; POMS SI E00870.001 A.

132. POMS SI E00870.025 C.4.g.

133. See SSA's 1997 Emergency Instructions, EM-97-191, providing that a PASS provision for installment payments can be approved if the expense is necessary to achieve the vocational goal and cannot be met out of current income.

134. See 29 U.S.C. §§ 701 et seq.

135. Under 1997 federal regulations, governing state VR agencies under Title I of the Rehabilitation Act, a state VR agency is authorized to purchase a vehicle as a means of transportation. 34 C.F.R. §§ 361.5(b)(49), 361.48(a)(8). To date, however, very few state VR agencies will provide for purchase of a vehicle through the VR program.

136. 20 C.F.R. § 416.1181(d).

137. Id. § 416.1180.

138. See, e.g., 24 C.F.R. §§ 813.106(c)(8)(ii), 913.106(c)(8)(ii)(providing that money set aside in an approved PASS will not be counted as income in calculating the tenant's rent contribution). See 7 U.S.C. §§ 2014(d)(16) and (g)(providing a similar exemption in the food stamp program).

139. See 20 C.F.R. §§ 416.1160(a)(1)(deeming of income form ineligible spouse) and (a)(2)(deeming of income from ineligible parent).

140. Under SSI's complicated deeming formula, if Cynthia and her mother are the only two persons in their household, the mother would have to earn $2,273 per month ($27,276 per year) for $562 to be deemed available to Cynthia.

141. Id. § 416.1165

142. ¹⁴²See Social Security Administration, Office of Research, Evaluation and Statistics,Quarterly Report on SSI Disabled Workers and Work Incentive Provisions, Table 15 (September 1999).

143. See, part III.A, above.

144. See, part V.A, above.

145. See part V.B, above, explaining that the SGA rule does not apply to SSI recipients.

146. See, part V.D.1, above.

147. POMS E00870.050.

148. Id. § 416.1182.

149. POMS E00870.070.

150. Ticket to Work/WIIA § 121.