The Effect of Work on Title XVI & Title II Benefits Linda - - PDF document

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Linda Landry Svetlana Uimenkova Disability Law Center Basic Benefits November 6, 2019

The Effect of Work on Title XVI & Title II Benefits

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SSI Benefits and Work: Effect of Wages

 Wages, whether in cash or in kind are

countable income for SSI purposes. 20 CFR 416.1110

 The main SSI work incentive is the

earned income deduction. 20 CFR 416.111(c)(5)&(7).

 For working SSI recipients, the question

is the amount by which monthly gross wages reduce the monthly SSI benefit.

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SSI Benefits and Work Effect of Wages

 For employees, SSA considers gross

monthly wages when paid

 To compute countable monthly wages,

deduct $65 plus ½ of the remainder. 20 CFR 416.1112(c)(5)&(7).

 A good estimate of countable wages

is ½ of gross monthly wages

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SSI Benefits and Work Effect of Wages

 SSI recipients may also deduct the $20

“general income disregard” from wages, if not used on “unearned”

• income. 20 CFR 416.1112(c)(4).

 Unearned income includes SSDI,

interest, pensions, worker’s compensation, alimony and other income that is not wages.

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SSI Benefits and Work Effect of Wages – Example 1

 Carmen receives $771 in SSI in for

disability in 2019, and has no other income.

 She takes a job paying $885 in gross

wages per month.

 Will Carmen remain eligible for SSI with

these wages?

 What should Carmen do when she

takes this job?

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SSI Benefits and Work Effect of Wages – Example 1

 SSA will count $400 of the wages [$885

– 85 ($65 + $20) divided by 2 = $400].

 Her SSI benefit will be $371 ($771 -

$400 = $371).

 Her new total gross monthly income

will be $1256 ($885 + $371).

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SSI Benefits and Work Effect of Wages – Example 2

 Joe receives $520 in SSDI and $271in

SSI benefits based on disability per month in 2019.

 He also takes a job paying $885 per

month in gross wages.

 These wages make him SSI ineligible.  More later on the effect of these wages

• n his SSDI.

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SSI Benefits and Work Effect of Wages – Example 2

 $520 SSDI - $20 = $500 countable SSDI  $885 gross wages - $65 = $820

$820 divided by 2 = $410 countable wages.

 $500 + 410 = $910, in countable income

for SSI purposes – too much to remain eligible for SSI.

 Joe’s total gross monthly income is $1405.

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SSI Benefits and Work Self Employment Income

 For self-employed SSI recipients, SSA

counts monthly net self-employment income, less $65 and ½ of the remainder.

 SSA divides net self-employment

earnings for the taxable year equally in each month. 20 CFR 416.1111.

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SSI Benefits and Work IRWE Deductions

 Impairment related work expenses

(IRWEs) may be deducted to determine countable gross monthly wages and countable net self-employment income.

 IRWE deductions are in addition to

• ther permitted earned income

deductions.

 20 CFR 416.1112(c)(6), 416.976

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SSI Benefits and Work IRWE Deductions

 IRWEs are:  impairment related items and

services

 needed in order to work  that the individual pays for and that

are not covered or reimbursed by any source, i.e., the individual must pay for them out of pocket.

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SSI Benefits and Work Examples of IRWEs

 Attendant care services provided at

work or at home to prepare for work.

 Transportation costs required because

• f disability.

 Durable medical equipment, work

assistive equipment, and prostheses.

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SSI Benefits and Work Examples of IRWEs, cont’d

 Medical treatment necessary to control or

improve a condition to permit work

 Expendable medical supplies  Medical devices and appliances  Non-medical devices and appliances where

verified as essential for control of a condition, e.g., an air cleaner for a severe respiratory condition

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SSI Benefits and Work BWE Deductions

 Blind Work Expense (BWE) deductions

are available to SSI recipients eligible

• n the basis of legal blindness.

 BWEs are in addition to other permitted

earned income deductions.

 20 CFR 416.1112(8), POMS SI SI 00820.535

Blind Work Expense (BWEs)

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SSI Benefits and Work BWE Deductions

 Examples of BWEs:  service animal expenses;  transportation to and from work;  taxes;  attendant care services;  visual aids;  translation of materials into Braille;  lunches;  professional association dues.

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SSI and the Student Earned

Income Deduction

 The student earned income

deduction is for SSI recipients who:

 are under age 22, and  are regularly attending school.  20 CFR 416.1112(c)(3). 17 Disability Law Center

SSI and the Student Earned

Income Deduction

 Regularly attending school means:

 For grades 7-12, attending at least 12 hrs

per week;

 For college or vocational program,

attending at least 8 hrs per week

 20 CFR 416.1861

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SSI Benefits and Work

Student Earned Income Deduction

 In 2019, the student earned income

deduction is $1870 per month, up to a maximum of $7550 per year.

 This amount is indexed to the yearly

cost of living increase.

 This deduction is in addition to other

permitted earned income deductions.

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Federal Educational Assistance

 All student financial assistance received

under Title IV of the Higher Education Act of 1965, or under BIA Student Assistance Programs, is excluded from income and resources, regardless of

• use. Title IV programs include: Pell

Grants; federal work study programs; Upward Bound, and others specified in

POMS SI 00830.455

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Other Educational Assistance

 Any portion of a grant, scholarship, or

fellowship used for paying tuition, fees,

• r other necessary education expenses

is not countable income.

 Any grant scholarship, fellowship, or

gift for the cost of tuition or fees does not count as a resource for nine months.

 20 CFR 416.1124(c)(3).

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Plan to Achieve Self-Support (PASS)

 Set aside income and resources to use

to achieve an occupational goal.

 Occupational goal must be feasible.  PASS must be in writing and include

budget (& business plan if self-empl.).

 If PASS is followed, income and

resources don’t count for SSI.

 20 CFR 416.1112(c)(9), .1124(c)(13).

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Keeping Medicaid While Working: Loss of SSI Cash

 Will SSI recipients lose Medicaid

coverage if they make too much money to receive SSI benefits, even with all the deductions they can take?

 Probably not if under age 65– they may

remain eligible under “1619b Medicaid”

• r a state Medicaid Expansion (Check

for Medicaid expansions in your state).

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SSI Benefits and Work 1619b Medicaid

 1619b Medicaid is continued Medicaid for SSI

recipients who make too much money to be eligible for an SSI cash payment

 These individuals can be “deemed” eligible

for MedicaidHealth - if they continue to meet all other SSI eligibility criteria, including the asset limit, AND if they meet the “Medicaid Test.”

 POMS SI 02302.000 et seq.

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SSI Benefits and Work 1619b “Medicaid Test”

 The individual must:  have been eligible for SSI for at least

1 month;

 remain medically disabled;  need Medicaid in order to work; and  have insufficient income to replace

Medicaid and SSI.

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SSI Benefits and Work 1619b Medicaid

 The advantage of 1619b Medicaid is

that individuals can move back and forth between SSI cash eligibility and 1619b Medicaid as the ability to fluctuate – as long as they remain medically disabled – without having to reapply for SSI.

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SSI Benefits and Work 1619b Medicaid

 The bad news is having to continue

to meet the SSI asset test – which can be hard while working.

 $2,000 for individual  $3,000 for couples

SSI Benefits and Work MassHealth CommonHealth

 MassHealth CommonHealth is available

for those who lose SSI cash eligibility due to income from work and who do not meet the 1619b Medicaid Test – or who prefer MassHealth CommonHealth to 1619b Medicaid.

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SSI Benefits and Work MassHealth CommonHealth

 To be eligible for MassHealth CommonHealth,

an individual must:

 Meet a one-time deductible; OR  Meet the SSI disability standard, except for

the inability to work at the substantial gainful activity level; and

 Work an average of 40 hrs per month (or 240

hrs over a 6 month period); and

 Pay a premium based on income and family

size.

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How Do SSI Recipients Avoid Problems When Working?

 Report to SSA anything that might affect

SSI eligibility, e.g., new job, pay change, bonus, loss of job, etc.

 Report w/in 10 days of the month after the

the month of the change & keep records.

 Understand SSI income counting rules.  Provide SSA with verifications for all

applicable income deductions.

 SSA must provide receipt for a work report

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 Telephone wage reporting

 Applies only to certain SSI wage reporting  Requires training by SSA.  POMS SI 00820.143

 Electronic Wage Reporting

 Through a my Social Security account  Applies to both SSI and SSDI wage reports  Can only report wages, no IRWE, etc.

deductions

Telephone and Electronic Wage Reporting- POMS SI 00820.143

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SSDI Work Incentive Scheme

9 Month Trial Work Period 36 Month Re-entitlement Period in The Extended Period Of Eligibility The Cliff: Benefit Termination if over SGA

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What SSDI Recipients Need to Know

 Have I completed my 9-month Trial

Work Period? When?

 If yes, when does/did my 36 month

Re-entitlement Period end?

 Are my countable earnings above the

Substantial Gainful Activity level?

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Trial Work Period

 9 “service” months in any 60-month

period

 Benefits no matter how much

earned as long as recipient remains medically disabled

 ONLY 1 Trial Work Period per period

• f disability

 20 CFR 404.1592

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Trial Work Period

 A trial work month used if “services”

performed, meaning:

 Earn more than $880 gross wages per month in

2019 (this amount changes every year) See POMS

DI 13010.060 for prior year amounts.

 If self-employed, earn more than $880/month

gross or work more than 80 hours/month

 Not just training or therapy

 No deductions for IRWEs; no averaging

earnings during TWP. However, sick and vacation pay do not count.

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Trial Work Period – Example 1

 Joe went back to work for the first time after

getting on SSDI. His gross earnings were:

 $600 in January 2019  $800 in February 2019  $1000 in May 2019  $900 in June 2019  $700 in July 2019

 How many trial work months has he used?  Should he get his SSDI for all these months?

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Trial Work Period – Example 2



Jill’s gross earnings went over the trial work month “services” limit in the following months:



• 1. June 2011



• 2. January 2012



• 3. February 2012



• 4. March 2012



• 5. April 2012



• 6. May 2012



• 7. June 2012



• 8. August 2018



• 9. September 2018



• 10. October 2018



• 11. November 2018



What month of her TWP is she in as of November 2018?

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Example 2 – The Answer



TWP 1 - June 2011



TWP 2 - January 2012



TWP 3 - February 2012



TWP 4 - March 2012



TWP 5 - April 2012



TWP 6 - May 2012



TWP 7 - June 2012



TWP 1 - August 2018 (60-mo. look back to Aug. 2013)



TWP 2 – September 2018



TWP 3 - October 2018



TWP 4 - November 2018

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Extended Period of Eligibility (EPE)– An All or Nothing Deal

 The EPE starts with the month after the

9th month Trial Work month for those who remain medically eligible.

 The first 36 months of the EPE are the

Re-entitlement Period.

 In the Re-entitlement Period, whether

recipients are payment eligible depends

• n whether they are working at the

Substantial Gainful Activity (SGA) level.

 20 CFR 404.1592a - .1592f.

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Extended Period of Eligibility – An All or Nothing Deal

 During Re-entitlement Period, one can go

back and forth on SSDI payment eligibility depending on SGA, by reporting earnings.

 After the Re-entitlement Period, SSDI

entitlement terminates w/SGA level work.

 Otherwise, the EPE continues, if the

recipient remains medically eligible, until the first month of SGA level work.

 SGA after the 36th month is “the Cliff.”

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EPE Example

 Joe’s 9th Trial Work month was Dec. 2016.

When does his EPE start? When is his Re- entitlement Period?

 Answer: January 2017 and January 2017

through December 2019.

 Between 1/2017 and 12/2019, he can go

back and forth on SSDI payment eligibility depending whether he works at SGA level.

 After 12/2019, SGA results in termination of

entitlement to SSDI.

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Is it SGA?

 Work must be substantial and gainful.  In 2019, work presumed SGA with

gross countable earnings of $1220/mo.

• r higher ($2040/mo. or higher if SSDI

for statutory blindness). See POMS DI

10501.015 for prior year amounts.

 Three additional SGA tests for self-

employed, based on worth of work.

 20 CFR 404.1571 - .1575

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How to Count Earnings for SGA

 Earnings count when they are earned, not

when the paycheck is received, unlike SSI.

 Count gross earnings unless self-employed.  Only pay for work activity counts.

 Pay for sick or vacation time doesn’t count  Bonus pay counts if based on productivity  Earnings put into pre-tax Cafeteria and retirement

plans count

 POMS DI 10505.010

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Is It SGA?–Deductions Available During EPE

 Impairment Related Work Expenses

 20 CFR 404.1576

 Subsidies

 Employer pays more than actual value of

services performed ($ amount or % reduction)

 20 CFR 404.1574(a)(2)

Is it SGA? - Continued

 Special Conditions

 E.g., close and continuous supervision;

work done by job coach; frequent rest periods

 20 CFR 404.1573(c)

 Unincurred Business Expenses (self-

employment only) – e.g., free help

 POMS DI 10510.012 44 45 Disability Law Center

Is it SGA? - Continued

 Unsuccessful Work Attempt (UWA)

 Yes - If work ended or reduced below SGA within

6 months due to the impairment or removal of special conditions related to the impairment.

 No – If work lasted more than 6 months.  20 CFR 404.1574(c).

 If it’s a UWA, it’s not SGA – BUT UWA can’t

be used after the first EPE SGA month .

 20 CFR 404.1492a(2).

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Is it SGA? - Continued

 Averaging Earnings

 Can average until first month of SGA in

• EPE. 20 CFR 404.1592a(2)

 Average over entire work period unless:  Significant change in work patterns or

earnings, or

 Change in SGA level (e.g., yearly COLA)

 20 CFR 404.1574a

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SGA Example

 Carmen gets SSDI based on disability. She is

in her EPE. Her gross earnings in September 2019 were $1250.

 In September 2019 she paid for the following

impairment related work expenses:

 $10 for prescription co-pays  $60 for therapy  $30 for her support dog Max

 Are her countable earnings presumed SGA

for September 2019?

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SGA Example: The Answer

 NO. Her wages are presumed SGA, but she

has IRWEs that reduce her wages below SGA and rebut the presumption.

 IRWEs: $10 + $75 + $30 = $100  Gross income $1250 – $100 IRWEs

= $1150 countable income for SGA purposes., which is less than the 2019 presumed SGA amount of $1220.

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Cessation and Grace Period

 1st month of SGA after TWP is called

the cessation month. 20 CFR 40.1592a

 Despite SGA, SSDI benefits are payable

for the cessation month and the following 2 months. 20 CFR 404.1592a(1)

 Income averaging or unsuccessful work

attempt concepts do not apply after the cessation month. 20 CFR 404.1592a(2)(i)

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After the Re-entitlement Period – The Cliff

 SSDI entitlement ends with the earlier of SGA

in the 36th month of the Re-entitlement Period, or with the first SGA month after the 36th month. 20 CFR 404.1592a(3)

 IRWEs, subsidies and special conditions

deductions continue to apply after throughout the EPE.

 Averaging and Unsuccessful Work Attempt do

not apply after the first SGA EPE month.

 If SSDI entitlement terminates due to SGA,

no right to continuing benefits during appeal, unlike medical Continuing Disability Review.

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Getting Back on SSDI After SGA Termination

 New Application; OR  Expedited Reinstatement of Benefits (SSDI and SSI)  If benefits terminated due to earnings;  Unable to perform SGA in month of application;  Disabled due to the same or related impairments

as those for which previously on benefits; and

 Request reinstatement within 60 months from

date of termination.

 Up to 6 months of “provisional” benefits available

while eligibility is decided.

 EXR benefits can be retroactive up to 12 months

from the date of application.

 20 CFR 404.1592b - .404.1592f.

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Extended Medicare

 Medicare continues during EPE even if

not eligible for SSDI cash.

 If SSDI terminates after EPE due to

SGA, Medicare continues for up to 54 additional months, if remain medically disabled.

 Must pay Medicare Part B premiums

quarterly if no SSDI to deduct from.

 42 C.F.R. 406.12(e). POMS HI 00801.146.

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How To Avoid Problems with SSDI When Working

Understand the Trial Work Period, the EPE, SGA, and how Social Security counts earnings for SSDI.

 Keep records of monthly earnings and deductions

such as IRWEs and subsidies.

 Track use of trial work months and Re-entitlement

Period months.

 Report changes in jobs and earnings to SSA within

10 days of the end of the month in which the change occurs. The sooner the better.

 Get benefits counseling from a Community Work

Incentive Coordinator. http://www.chooseworkttw.net/index.html