Social Security Work Incentives
Work Incentive Rules
At A Glance
The Social Security Act was
signed into law in 1936. This act was amended to include the disabled in
1956. In 1956 a disability was defined by the Social Security Administration
as...
"...a condition
that is expected to last for at least a year (or result in death) and results
in the inability to do the work for which you are suited. Disability programs
give benefits when an individual is unable to work."
In 1990, The Americans with
Disabilities Act (or ADA) describes an individual who is disabled as...
"...one who has
a physical or mental impairment that substantially limits one or more of
the individual's major life activities, has a record of having a disability,
or is perceived to have disability."
The definition of the word "disability"
may change from agency to agency. For over one half century the original
Social Security Act has been patched and pieced well beyond its original
intent. In many ways it would make a very good sense to eliminate Social
Security all together and start from scratch; develop a program much better
suited to American Society at the brink of the millennium. Unfortunately,
special interests and the overall political climate — not to mention a
touch of the culture wars — simply won't permit that.
The rules described and defined
below were written to address the concerns of the more "traditionally
disabled" population; the individual with a physical or mental impairment
that inhibits or prevents his or her ability to earn a living as it was
earned prior to the handicap. HIV/AIDS
can be considered a special category with unique and uncommon conditions
as pertain to Social Security Disability. Those uncommon conditions are
being addressed by the Work Incentives Act of 1999.
Until the current work incentives
are altered, modified or otherwise changed, we must learn as much as we
can about those that currently are in place. Following is a brief description
of the rules that will help you work while you get Social Security Disability
Insurance (SSDI) benefits. Each is explained in more detail in the pages
that follow.
Definitions
Most of the rules, phrases,
acronyms and agencies discussed herein are the result of laws passed in
1980 and 1987. In addition, Congress passed the Americans With Disabilities
Act in July 1990. The ADA prohibits discrimination against people with
disabilities who wish to work. Helping people with disabilities to lead
full and independent lives is its mission.
Social Security Disability Insurance - SSDI
Most — but not all — of
us would rather work than stay home. Those of us who are disabled and haven't
held a job for quite a while — if ever — find the prospect both intriguing
and intimidating, particularly as regards the medical and financial benefits
— the "safety net" — we receive. Doctor's visits, medication, hospitalization,
rehabilitation... anything having to do with maintaining good health and
a sense of well being must be defended and protected. Therefore, when contemplating
any change to a daily routine, for whatever reason, obvious questions requiring
detailed and reliable answers arise.
Questions like:
There are many more.
Social Security Disability
Insurance (SSDI) benefits are paid to people with disabilities who
have contributed to Social Security through payroll deductions. Benefits
are also paid to these individuals’ dependents. Supplemental Security Income
(SSI) disability benefits are paid to people with disabilities with little
income and few, if any, additional resources.
Although it is important
to recognize and remember the differences between Social Security Disability
Income (SSDI) and Supplemental Security Income (SSI) , the Social Security
Administration's (SSA) work incentives are designed to apply to both by
providing some support and assistance as you attempt to return to
work or enter the workforce for the first time.
-
Substantial Gainful Activity
Social Security Law bestows
a disability status not only on the individual who is conditionally disabled
but also upon that individuals inability to engage in any substantial gainful
activity ("SGA") which exists in the national economy. Generally, monthly
earnings of over $700 trigger Social Security to declare work to be disqualifying
"SGA". In situations where someone is working, or trying to work, over
a period of several months, though, earnings as low as $200 monthly can
considered to be "SGA" thereby affecting your monthly SSDI payment.
-
Trial Work Period
If a disabled person returns
to work (or enters the workforce for the first time) and earns an income
that income will not affect Social Security Disability Insurance for nine
(not necessarily consecutive) months. If the nine months of the Trial Work
Period do not fall within a 60 month (five year) period, the Trial Work
Period may be extended.
-
Three Month Grace Period
If Social Security has deemed
your income substantial your benefits can continue 3 months beyond the
expiration of the Trial Work Period before they stop.
-
Extended Period Of Eligibility
Those employed after the
successful completion of the Trial Work Period, will receive a Social Security
Disability Insurance benefit if during any month for the a minimum of a
consecutive 36 month period, his or her earnings fall below the Substantial
Gainful Activity (SGA) level. This means, among other things,
that after the 9 month Trial Work Period — and an additional three month
period — that Social Security Disability Benefits will stop. However, if
during the next 36 months, the individual earns less than $700 Social Security
will re-instate a benefit for that short month. The benefit is not likely
to be a full benefit however, unless no outside income was earned during
that month.
-
Continuation Of Medicare
If your Social Security
disability insurance benefits stop because your earnings are at the Substantial
Gainful Activity level but you are still disabled, Medicare can continue
for at least 39 months after the trial work period ends. After that, you
can buy Medicare coverage by paying a monthly premium directly to the Social
Security Administration.
-
Impairment Related Work Expenses
Certain expenses for things
you need because of your impairment in order to work may be deducted when
counting earnings to determine if you are performing substantial work.
Again,
this "incentive" applies to the more traditionally handicapped, although
there have been cases when HIV+ and PWAs have benefited by it.
-
Recovery During Vocational
Rehabilitation
If you medically recover
while participating in a vocational rehabilitation program that is likely
to lead to becoming self-supporting, benefits may continue until the program
ends. There have been instances where voc rehab stipulations pay for
meds and care that traditional Social Security and Medicare will not.
-
Special Rules For Blind Persons
If you are blind, several
special rules will help you work.
The rules enumerated above apply
exclusively to Social Security Disability Insurance Payments. While some
may apply to other agencies, programs and profiles, it is always best to
corroborate your findings with the appropriate institution, its counselors
and caseworkers.
Supplemental Security Income - SSI
SSI is available
to individuals who have applied for and/or are receiving SSDI and who are
age 65 or older, or blind, or have a disability, whose income is low and
who have few if any tangible assets. SSI benefits are also paid to the
dependents of these individuals.
Those who are qualified
to receive Supplemental Security Income are often eligible for food stamps
and Medi-Cal as well.
Although SSDI recipients
are often eligible to receive SSI, the rules regarding a return to work
vary widely between the two. SSI benefits are immediately affected upon
a return to work. There are strict formulas by which earnings are calculated
and dollars subtracted from the monthly stipend.
To determine the dollar impact
to the SSI benefit while working take your gross earnings and subtract
$65 for the Earned Income Exclusion then subtract another $20 as
a General Income Exclusion and divide the result by two.
Example #1:
| Earned Income |
$585.00 |
| Earned Income Exclusion |
-65.00 |
| Subtotal |
520.00 |
| General Income Exclusion |
-20.00 |
| Subtotal |
500.00 |
| Divide by 2 |
÷2 |
|
$250.00 |
The money that SSA
"counts" after deducting the exclusions from your income and dividing by
two is called your countable earned income.
Countable earned income
is
what SSA considers when they re-budget your SSI. The amount of money that
SSI counts is always going to be less than half of what is earned.
To determine your new monthly
rate, your countable earned income is compared to your SSI check. If your
countable earned income is less than your SSI, it is deducted from your
monthly rate and the difference is your new SSI benefit. When the countable
income is more than your original check, your check will stop.
The following example shows
how an individual whose countable income is $250 actually earns considerably
each month by returning to work.
Example #2:
| SSI Check |
$580.00 |
| Earned Income Exclusion |
-250.00 |
| New SSI Check |
330.00 |
| Calculate Total Income: |
|
| New SSI Check |
330.00 |
| Wages |
+585.00 |
| Total Net Income |
$915.00 |
SSI recipients are automatically
eligible for Medicaid (Medi-Cal) and as long as a minimum of $1 is still
received as an SSI payment Medicaid remains in effect. In many cases if
the cash benefit is lost altogether, Medicaid may be retained, providing
all other Medicaid eligibly requirements remain satisfied. This is called
Provision 1619 (B) by the Social Security Administration. To ensure continuation
of Medicaid the disabled individual who is earning an income must:
-
Still have a disability
-
Meet all of the SSI requirements
except for the amount of earned income
-
Need to maintain Medicaid coverage
in
order to work (appropriate health insurance not available from employer)
-
Yearly earnings do not exceed
$28,580 per year.
It is imperative that both SSDI
and SSI administrators be apprised of any changes in income and they must
be notified separately. For your own protection, notify Social Security
in writing of any of the following:
-
Change in income
-
Change in hourly rate
-
Change in number of hours worked
-
Starting or leaving a job
-
Entering or leaving a hospital
-
Change in your address
Social Security will collect
any overpayments that have been made to you. Accurate and timely reporting
of any change will minimize this risk.
