Making It Easier to Go to Work: What the Changes at Social Security Mean to You
ICI Tools for Inclusion #17
Table of Contents:
The Social Security Administration (SSA) has developed a number of incentives or supports to assist people with disabilities to enter the workforce. The intent is to diminish the consequences and fears about losing benefits due to an attempt to work. Recently, there have been a number of changes to the Social Security disability programs that make it even easier for people who receive benefits to go to work.
Many of these changes are a result of the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA). SSA has also recently made other changes that increase the amount of money someone can earn before their benefits are affected. This publication explains what these changes are, and how they impact people with disabilities who want to work. Highlights of these changes, which are covered in detail, include:
The Social Security Disability Programs
The Social Security Administration (SSA) manages two disability benefit programs--Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). These programs provide cash and/or medical benefits to people who are eligible. Each program has its own set of eligibility rules, work incentives, and benefits available. It is possible to receive benefits from both SSI and SSDI.
Definition of disability
The definition of disability for purposes of initial eligibility is the same under the SSDI and SSI programs. "Disability" is defined as the inability to perform substantial gainful activity (SGA--explained below) because of a medically determinable physical or mental impairment that is expected to last for at least 12 months or to result in death.
Impact of income
Income impacts SSI and SSDI differently. For people receiving SSI, benefits are gradually reduced in relation to income (after the first $85 of income, SSI checks are reduced $1 for every $2 of income). SSDI is an "all or nothing" type of program, meaning that you receive your entire SSDI amount until your income reaches the SGA level, at which point your SSDI checks will stop after a period of time (called a "Trial Work Period," explained in detail later in this publication).
It's important for you to understand which program(s) you are receiving benefits from in order to understand the impact of income on those benefits and the changes discussed in this publication.
Changes in SGA
What is SGA?
The Substantial Gainful Activity (SGA) amount is a term used quite a bit within the Social Security system. It is a gross monthly earnings amount that SSA uses under both the SSI and SSDI programs to determine whether an impairment causes a disability in the area of work. This is only one of the ways that SSA determines disability, but it is a critical step in disability evaluation. The SGA level is different for people who are blind than for people who have any other type of disability. SGA is used in different ways, depending on the benefit program, and whether or not it is for eligibility or work incentive purposes.
What does SGA mean for people who receive SSI?
One of the criteria for an adult (over age 18) to be eligible for SSI is that they must be earning less than the SGA level. One of the work incentives, called an Impairment-Related Work Expense (IRWE), may help keep earnings below SGA if you are working at the time you apply for SSI. Once on SSI, the SGA limit no longer applies, and you may earn more than that amount and continue to receive both SSI cash [under a provision called status 1619(a)] and medical (Medicaid) benefits [under a provision called status 1619(b)].
What does SGA mean for people who receive SSDI?
SGA is used for two purposes for people on SSDI: 1) to determine eligibility and 2) to determine whether benefits will continue. In addition to the other SSDI eligibility criteria, an applicant must be earning less than the monthly SGA level in order to be eligible for SSDI benefits.
Once on SSDI, the SGA amount is used as a gauge to determine if you continue to meet SSA's definition of disability, and, therefore, if benefits will continue. Earnings at the SGA level or above may trigger your cash benefits to stop. IRWEs may be deducted from gross monthly earnings in order to help a SSDI recipient stay below SGA level. Using an IRWE to decrease the earnings counted can help you become eligible for SSDI, or to help you maintain eligibility. It is important to note that you will not be eligible for SSDI if you work at the SGA level or above within 12 months of the start of your impairment(s) or before SSA approves your claim for benefits.
Changes to SGA level
In recent years the SGA amount has been increased. In 2002, the SGA amount was $780 for non-blind disability benefit recipients and $1,300 for people who are blind. In 2003, these amounts were raised to $800 and $1,330. The SGA amount is now adjusted for inflation each year. This means that the SGA level will either increase or stay the same each year, depending on the wage growth of the country as a whole.
Changes in the Student Earned Income Exclusion
What is the Student Earned Income Exclusion?
The Student Earned Income Exclusion (SEIE) applies only to people who receive SSI. This work incentive allows a student under age 22 who is not married or the head of the household, and who is regularly attending school, to exclude a portion of his or her earned income each month, up to a maximum. These earnings, then, will not cause any reduction in the SSI check. In order to be considered "regularly attending" school, you must take one or more courses of study and attend classes:
It is possible to be homeschooled and eligible for SEIE if you meet specific criteria.
Changes to SEIE amount
In 2002, the SEIE monthly exclusion was $1,320, and the maximum annual exclusion allowed was $5,340. In 2003, the monthly exclusion was raised to $1,340 with an annual maximum of $5,410. These amounts will also now be indexed according to the national average wage index, meaning they will increase or stay the same each year.
Changes in the Trial Work Period
What is the Trial Work Period?
The Trial Work Period (TWP) is one of the work incentives available only to SSDI recipients. It means that you can work for 9 months (not necessarily in a row) within a 5-year period, receiving full benefits while you test your ability to work. Any month in which you earn over the TWP amount counts as a TWP month. During these months, you receive your earnings from work and your full SSDI check as long as you continue to have the same disability. After you have used up your 9 trial work months, your SSDI cash payments will stop if your earnings are above the SGA amount.
After the end of the TWP, SSA decides whether you are able to work consistently at the SGA level. If so, you will receive SSDI benefits for the month your eligibility for cash benefits ended (due to either medical improvement or work at SGA level) plus the next 2 months, no matter how much is earned. This "grace period" includes the cessation month plus the next 2 months. Full benefits are received for all 3 of these months, even if earnings are above SGA.
Extended Period of Eligibility (EPE)
The extended period of eligibility begins after the 9-month TWP is completed. The EPE is a 36-month period of time during which SSDI is received each month that earnings fall below the SGA level. The EPE overlaps with the grace period described above. This means that for 3 years after completion of the TWP, an individual will receive full SSDI benefits for any month in which gross earnings fall below SGA because of the same predetermined disability.
Changes to TWP amount
Like the SGA and SEIE amounts, the TWP amount will now increase or stay the same each year, according to the national average wage index. The TWP amount for 2002 was $560 of gross income per calendar month. This amount was increased to $570/month for the year 2003. Any month in which at least this amount is earned counts as one of the 9 TWP months. If you are self-employed, any month in which you earn the TWP amount or work 80 hours in the business counts as a TWP month.
New Work Incentive: Expedited Reinstatement of Benefits
Expedited Reinstatement of Benefits, a new provision under TWWIIA, is basically a "quick back on" benefits clause for people who receive SSI, SSDI, or both. If your benefits have ended because of increased work activity, it allows you to get back on benefits quickly if your disability prevents the increase in income to continue.
What does expedited reinstatement mean for people who receive SSDI?
If your SSDI benefits have ended because of earnings at SGA level after the 36-month EPE described above, you may request reinstatement of those benefits without filing a new application. This is true provided that the disability that causes you to be unable to earn SGA is the same (or related to) the disability for which you originally received benefits. This request must be made within 60 months after benefits ended. This "quick back on" policy extends the reinstatement option beyond the former 36-month EPE deadline.
What does expedited reinstatement mean for people on SSI?
Unlike people on SSDI, SSI recipients are able to move back and forth between SSI cash payments with Medicaid [1619(a)] and non-cash payments with Medicaid [1619(b)] with no time limit. Prior to TWWIIA, when a SSI recipient was no longer eligible for cash and medical benefits because of income and resources, they would move into a 12-month suspension period. During this 12-month period, benefits could be reinstated without a new application. This was true provided that the disability that caused you to be unable to earn SGA was the same (or related to) the disability for which you originally received benefits. After the 12 months, a new application/eligibility process was required.
Now, people who are no longer eligible for SSI cash and medical benefits because of earned income (or earned and unearned income) may apply for a reinstatement of cash benefits, even though they are no longer within the 12-month SSI suspension period time limit. Again, the disability must be the same or related to that for which you were originally determined eligible. All other eligibility criteria must continue to be met. The request for reinstatement must be filed within 60 months of becoming ineligible for benefits. (See the Medicaid section under "Health Care Changes" elsewhere in this publication for details on how income impacts Medicaid benefits.)
Under TWWIIA, when a determination is being made for an expedited SSI or SSDI reinstatement, the individual will receive benefits for up to 6 months. This means that whatever medical and/or cash benefits you may be eligible for will be received until the decision is made. Even if it is ultimately determined that you are not eligible for benefits, these benefits will generally not have to be repaid.
Changes to CDRs
What are Continuing Disability Reviews?
SSA conducts continuing disability reviews (CDRs) to determine whether or not recipients are eligible for continued benefits. This is often a very time-consuming, frustrating process for many people, as it requires obtaining updated medical information to prove that you still have your disability and are unable to work at or above the SGA level. Social Security benefits end if medical or other evidence shows that you no longer meet SSA's definition of disability. SSA must conduct CDRs at least once every 3 years for most recipients. Persons with disabilities that are considered permanent are reviewed less frequently, usually every 5 to 7 years.
What are the changes to CDRs under TWWIIA?
Previously, work activity would automatically trigger a CDR. Now, however, if you have received Social Security disability benefits for at least 24 months, you will not be medically reviewed just because of work activity. However, regularly scheduled medical reviews can still be performed, and benefits can end if earnings are above the limits. If you are using a Ticket under the Ticket to Work Program (detailed elsewhere in this publication), you are not subject to CDRs.
A New Service: Benefits Planning, Assistance & Outreach
Benefit Planners are now available in every state to provide accurate information about the work incentives and employment supports available through Social Security. The BPAO projects are grant recipients, not SSA employees, and are based in the community. Grant recipients include a variety of private and public organizations. Benefit Planners are able to provide one-to-one assistance to help people understand what will happen to their Social Security, health, housing, food stamps, and other federal benefits when they go to work. These projects also provide outreach and training in the community to help people understand SSI/SSDI work incentives. For local BPAO contacts, go to www.ssa.gov/work/ServiceProviders/BPAODirectory.html
P&A Organizations Now Available to Assist with Information & Advocacy
Protection and Advocacy (P&A) organizations are federally mandated to protect the rights of persons with disabilities through legal advocacy. There is a P&A in every state and territory. Under TWWIIA, P&A organizations are receiving funding to assist SSI/SSDI beneficiaries in getting information and advice about receiving Vocational Rehabilitation and employment services, and to provide advocacy or other related services that people may need in order to obtain gainful employment. To find your local P&A organization, go to www.ssa.gov/work/ServiceProviders/PADirectory.html or call the National Association of Protection and Advocacy Systems at 202-408-9514.
The Ticket to Work Program
A major part of TWWIIA is the Ticket to Work Program. The basic goal of the Program is to increase the choices and options available as to where you can obtain vocational services, and to increase self-sufficiency and reduce dependence on SSI/SSDI cash benefits.
The Ticket Program began in 2002, and is being phased in nationally over a three-year period according to the following schedule:
Who will receive the Ticket to Work?
When the Ticket Program begins in a state, most SSI and/or SSDI recipients between the ages of 18-65 receive a "Ticket to Work" in the mail. (If you are coded as "medical improvement expected" [MIE] or are 18 years old and have not had an age 18 review, then you are not eligible to receive a Ticket.) When you receive a Ticket, you can choose whether or not to use it and when. The Ticket Program is voluntary.
How does the Ticket work?
The Ticket is a piece of paper that allows you to choose the provider from whom you receive vocational services. In other words, you may "shop around" for an approved provider. Service providers under the Ticket Program are called "Employment Networks" (ENs). Maximus, Inc. is the Program Manager for the Ticket to Work Program, and keeps updated lists of all EN providers. When you receive your Ticket in the mail, you also receive a list of approved ENs. Examples of possible ENs include the state Vocational Rehabilitation agency, other public disability agencies, community rehabilitation providers, One-Stop Career Centers, schools, and even employers. Some ENs provide all of their services through the World Wide Web!
Before "assigning" your Ticket to an EN, you can discuss the services you would like to receive with any or all possible ENs. It is important to note that ENs also have choice as to whom they serve. Both you and the EN must agree to work together. Once you have chosen a potential EN, the EN develops an Individual Work Plan (IWP). If the state Vocational Rehabilitation agency is chosen, the plan is called an Individualized Plan for Employment (IPE). Either plan will include your stated job choice and the steps to achieve that goal. If you are satisfied with the plan that is written, you can then assign the Ticket to the EN you have chosen. When the EN decides to accept your Ticket, they are agreeing to provide services to help you get and keep a job. Then, and not before, the Ticket is considered in "active status."
Social Security pays the EN based only on a successful outcome, which is defined as getting you a job that pays enough income to eliminate your SSI/SSDI check. The amount and timing of when the EN gets paid depends on which benefits the job seeker received and how much was received.
If I'm not happy with the services I'm getting, can I change Employment Networks?
Yes. You may choose to withdraw your Ticket from the provider if you are not satisfied with the provider's services, and either assign the Ticket to a different entity or hold on to it for optional future use. Similarly, service providers have the option of discontinuing services to an individual at any time under the Ticket Program if they feel the person is not making sufficient progress towards his or her employment goals.
Changes to CDRs under the Ticket to Work Program
One of the major benefits for SSI/SSDI recipients using a Ticket is the suspension of CDRs. While you are using your Ticket, you will not undergo a Continuing Disability Review. However, benefits can still be terminated if your earnings go above income limits.
What is my responsibility as the Ticket user?
Under the Ticket Program, it is necessary to demonstrate to SSA that you are making "timely progress" toward your employment goals. If SSA thinks that you are not making timely progress, then CDRs will no longer be suspended. The guidelines for timely progress are as follows:
Is the Ticket to Work Program for me?
As noted already, the Ticket Program is strictly voluntary. There are a few things to consider in deciding whether or not to use the Ticket Program:
Health Insurance Changes
Many people with disabilities rely on two publicly funded health care systems, Medicaid and Medicare, for their health insurance. A major issue for people with disabilities who want to go to work is concern over losing their health coverage. People with disabilities have often assumed incorrectly that when they no longer receive a SSI or SSDI check, their medical coverage automatically ends. Prior to TWWIIA, people with disabilities who remained medically disabled could keep their medical coverage for a certain length of time, or up to certain income amounts, even when they were no longer receiving a Social Security check. TWWIIA further reduces the connection between eligibility for cash benefits and eligibility for health insurance coverage, making it even easier for you to earn more through work and still keep your Medicaid and/or Medicare coverage.
People on SSDI are covered under Medicare, which is funded and operated by the federal government in Washington, D.C. Medicare has two parts. Part A is hospital insurance, which people typically do not have to pay for. Part B is medical insurance (for non-hospital expenses, such as doctor's visits and medication). Most people pay a monthly premium for Part B (in 2003 this monthly premium is $58.70, increased from the 2002 premium of $54 per month).
Expanded period of free Medicare coverage
If you are covered by Medicare and have income below the SGA amount--$800 per month ($1,330/month for people who are blind) for 2003--you receive Medicare hospital insurance at no charge, and are eligible for Medicare medical insurance (for which you pay a premium). If your monthly income increases above the SGA amount, you will now receive free Medicare hospital insurance, and remain eligible for Medicare medical insurance, for 7 years and 9 months. (This time period was extended as a result of TWWIIA.) At the end of this time period, you can then purchase Medicare hospital insurance for a monthly premium ($316/month for 2003). If you cannot afford to pay this premium, however, you may be eligible for state assistance under the Qualified Disabled and Working Individuals (QDWI) program. To be eligible for this program, you must:
To learn more, call the QDWI contact in your county, local, or state social services or medical assistance office. (Information on obtaining contacts is listed under "Resources on Health Care Coverage" at the end of this publication.)
What does this mean?
The bottom line is that if you are covered under Medicare, you can go to work and earn income (with no limits) and keep your premium-free Medicare hospital coverage for almost eight years. And even after you are no longer eligible for premium-free Medicare, you can purchase it (and your state may help pay the premium).
Example: Raul is not working and has not worked for several years. He receives a monthly SSDI check and is covered by premium-free Medicare hospital insurance. He gets a job in June 2003 that pays him $1,200 per month. Since this job pays more than the SGA amount ($800 for 2003), he will receive his last SSDI check in May 2004 (when he will have used up his 9-month Trial Work Period and 3 month grace period). However, he will continue to receive premium-free Medicare hospital coverage until March 2011. At that point, his options are: a) use the hospital insurance provided by his employer (if his employer provides coverage) or b) pay the Medicare monthly premium (which could possibly be subsidized under his state's QDWI program, if he is eligible).
People on SSI are typically covered under Medicaid. The federal government oversees the Medicaid program, but each state operates its own program. As a result, the name of the state's program and how it operates are different in each state. Medicaid is funded by a combination of federal and state funds.
Although the federal government requires that each state's Medicaid program follow certain federal requirements, each state makes its own decisions about how the program operates. Therefore, the Medicaid program varies from state to state concerning which services are covered, income limits, etc. Under TWWIIA, states have been given much more flexibility concerning the ability of people with disabilities to keep their Medicaid coverage and earn income from employment. However, please remember that any of the changes under TWWIIA for Medicaid are optional, and individual states must decide whether or not to make the changes that the federal government is now allowing.
How income impacts Medicaid coverage
If you are receiving a monthly SSI check, you will stop receiving a check when your income exceeds a certain amount (based on the formula of a loss of $1 in benefits for every $2 in income, after the first $85 of earned income). However, even when you stop receiving a check from SSA, you can still keep your Medicaid coverage until your income exceeds the annual "threshold" amount under what is known as 1619(b). This threshold amount varies quite a bit state-by-state, but it can be relatively high and is adjusted every year (for example, in Massachusetts it was over $27,000 per year in 2002). To find out the amount in your state, you should contact your state medical assistance or Medicaid office. (Contact information is listed under "Resources on Health Care Coverage" at the end of this publication.) This provision is not new under TWWIIA, but people with disabilities and advocates are often unaware of the specifics of 1619(b), and assume incorrectly that when they stop receiving an SSI check they will lose their Medicaid coverage.
As well as the income guidelines for keeping Medicaid, there are also resource limits. To continue to remain eligible for Medicaid, your liquid resources (such as cash savings) or assets cannot go over a certain amount. Under federal rules, you can have up to at least $2,000 in assets, and married couples can have at least $3,000 in assets. Some states allow you to have an even higher amount of liquid assets and still keep your Medicaid coverage. To find out the amount in your state, you should contact your state medical assistance office.
Before the passage of TWWIIA, states had the option of allowing people with disabilities whose income was above the state threshold amount to buy Medicaid coverage on a sliding fee basis, as long as their income did not exceed 250% of the federal poverty level (2002 figure: $22,150 for an individual living anywhere in the United States, except Alaska and Hawaii. This figure is expected to increase early in 2003).
Changes in state Medicaid options under TWWIIA
Under both of these options, states can set asset, resource, and income limits that differ from federal SSI requirements.
What do these changes mean to me?
The bottom line of these changes is that you can potentially keep your Medicaid coverage and earn a much higher income than was permitted before (although you may have to pay a monthly premium). Please remember, though, that income and resource limits vary from state to state, and it is very important that you understand the specifics of how your state's program operates.
The need for advocacy
Many states have a number of activities that are looking at how people with disabilities can go to work and advance in their careers while keeping health care coverage. These activities include proposed changes in laws and regulations, research studies, and demonstration projects. As states are considering making changes, there are two important areas for people with disabilities to be involved in:
There are already organizations in many states working on these issues, such as Independent Living Centers and disability advocacy organizations. You should feel free to contact the advocacy groups in your area to find out if they are working on expanding health care for working people with disabilities.
Resources on Work Incentives/Employment Supports
Resources on the Ticket to Work
Resources on Health Care Coverage
The following resources can help you find out:
BPAO - Benefits Planning, Assistance and Outreach projects
CDR - Continuing Disability Review
ILC - Independent Living Center
IRWE - Impairment-Related Work Expense
P&A - Protection & Advocacy Organizations
PASS - Plan for Achieving Self Support
SGA - Substantial Gainful Activity
SSA - Social Security Administration
SSDI - Social Security Disability Insurance
SSI - Supplemental Security Income
TWWIIA - Ticket to Work and Work Incentives Improvement Act
Our thanks to Ray Cebulla and Matthew Olds for their editorial assistance.
Funding for this publication was provided by the Office of Disability Employment Policy--U.S. Department of Labor, and by the Rehabilitation Services Administration--U.S. Department of Education grant #H235A980216. The opinions contained in this publication are those of the grantees and do not necessarily reflect those of the U.S. Department of Labor or the U.S. Department of Education.
For more information, contact:
This publication will be made available in alternate formats upon request.
Contributing author: Lisa O'Connor