Supplemental security income: benefits and incentive provisions to assist people with severe disabilities toward economic self-sufficiency

Supplemental security income: benefits and incentive provisions to assist people with severe disabilities toward economic self-sufficiency – Vocational Rehabilitation and Competitive Employment

William D. Halloran

The Supplemental Security Income (SSI) Program, Title XVI of the Social Security Act, is an income support program designed to maintain people at some minimal standard of living. The SSI program has often been considered a disincentive to employment, because recipients feared losing their cash payment and medical insurance. Consequently, some well-meaning educators and rehabilitation professionals were reluctant to assist people with severe disabilities and their families to enroll in the SSI program. The notion of promoting a payment program which might act as a disincentive to participation in training and employment programs would be contrary to the commitment to assist individuals in maximizing their potential for self-sufficiency.

Several incentives to participate in training and employment have been introduced to the SSI Program since 1980. These changes sought to remove some of the economic barriers associated with working and allow for the continuation of benefits until a recipient’s earnings and employment benefits would ensure coverage. These changes were intended to be temporary, but they were made permanent by Public Law 99-643, which also has greatly strengthened the SSI work incentives and has made them easier to understand and use.

The purpose of this article is to describe the SSI Program, the criteria used to determine eligibility and the benefits available to recipients; and to explain the major work incentive provisions and show how these provisions can assist people with severe disabilities to achieve higher levels of self-sufficiency. The SSI Program benefits and incentives can represent a significant opportunity for meeting the ongoing support needs of people with severe disabilities. Educators, rehabilitation personnel and parents must become familiar with the program to assist qualified individuals in accessing benefits.

Eligibility for SSI

To be eligible for Supplimental Security Income benefits, a person must be unable to engage in Substantial Gainful Activity (SGA). SGA is defined as the performance of significant physical or mental activities for remuneration or profit. This means that a person is considered to be disabled if a physical or mental impairment or combination of impairments prevents him/her from doing any substantial gainful work. The SGA is the amount of monthly average earnings used as a guideline to assist in evaluating the work activity of people claiming or receiving disability benefits. The monetary level of SGA is an indicator of the ability to work, not a measure of adequate income. This indicator has been in use since 1957. Originally set by regulation at $100 a month, the SGA level was increased periodically and in 1980 was made commensurate with average wages at $300. In January 1990, the SGA level was set at $500 per month.

Student status is not considered in determining SSI eligibility, nor are parental income and resources taken into account in determining SSI eligibility or payment amount for those 18 and older. Having his or her income and resources evaluated in the same manner as an adult provides an incentive for the person 18 years old or older to enter a full-time training program. While 18 is the age of independent eligibility, educators, rehabilitation personnel, and families should probably start the process at an earlier age. Information such as social security number, birth certificate, payroll slips, tax returns, bank books, and other documentation of income should be available when applying. Medical records concerning the person’s disability would help to expedite the process.

One cannot receive SSI benefits and also participate in the Aid to Families of Dependent Children (AFDC) program. If a parent or child is eligible under both programs, the parent can choose the one which best suits the family. However, it must be stressed that the SSI recipient is considered an adult and will continue in the program moving back and forth among the tiers of payment status, as earnings rise and fall. A persons’s level of earned income does not affect his or her disability status once initial eligibility is established. Earned income is taken into account under SSI income criteria to measure the need for assistance.

Medical Insurance

Ordinarily, a person who is determined eligible for SSI will also be found eligible for Medicaid, a federally supported health insurance program administered by the states. This varies among states. Health insurance may not be a major concern of parents of young adults who are able to include their children in family coverage. However, when an individual with disabilities reaches age 22 they are very often excluded from coverage under the family plan. Health insurance and other fringe benefits are seldom provided to those involved in supported employment or other employment situations when they may be in less than “full-time” status. The cost of providing independent health insurance for someone over the age of 22 is quite expensive.

Work Regarding Section 1619(a) and (b) Provisions

People not familiar with the SSI program and the Medicaid provisions often ask why people would want to work if they are receiving benefits without working and are also provided free medical coverage. The level of support provided through this program would generally not constitute economic self-sufficiency. Although, many people with disabilities express legitimate concerns regarding the risk involved in becoming employed and losing benefits, recent studies indicate that unemployed people with disabilities are eager to join the nation’s work force.

Recent changes in the SSI program have significantly reduced or eliminated the risk involved in becoming employed. The Special Cash Benefits Provision-section 1619(a)-allows special SSI cash payments to recipients in place of their regular SSI payments when earned income (gross wages and/or net self-employment income) exceeds the amount designated as the substantial gainful activity level. The reduction in SSI payment when a recipient goes to work is proportionate to the amount of earnings. The payment check will be reduced by $1 for every $2 earned above the earned income exclusion. This 1 to 2 reduction allows the recipients to earn significantly more than the payment check would provide. If the person’s earnings increase to the point at which the SSI payment is reduced to zero, he/she would have reached what is termed his or her “break even” point. This amount is much higher than the person’s cash payment would be, and any employment related work expenses would be factored out of the calculation of earned income. Medicaid coverage can continue even when the person is no longer eligible to receive cash payments.

Section 1619(b) of the SSI program enables people to retain their medical benefit when earnings are too high for cash payments but not high enough to offset the loss of Medicaid. The Social Security Administration uses a threshold concept to determine if someone’s earnings are sufficient to replace the SSI payment and Medicaid benefit lost due to work. The threshold amount varies from state to state, but is usually over $1,000 per month. Additionally, if the person has unusual medical expenses or impairment related work expenses, such as specialized transportation, attendant or personal care and adaptive or assistive devices needed to perform his/her work, these expenses would be deducted from the earned income.

If a person in section 1619(b) status were to lose employment or be prevented from continuing to work due to physical and/or mental impairment, that person would revert back to his or her initial status. The provision for reentry into the payment and medical coverage status has eliminated the risk involved with going to work and not succeeding.

SSI Work Incentive

As already discussed, the Section 1619(a) incentive allows a special cash payment to SSI recipients while employed and Section 1619(b) provides extended medical coverage to those employed, even though earned income becomes high enough to cause SSI cash payments to stop. These provisions are significant incentives to employment.

In addition to these incentives, the SSI Program also ensures reentry to those who might experience a significant reduction or loss of income. There are two additional incentive provisions which are intended to help people secure a place in the workforce. These are the Impairment Related Work Expenses (IRWE) and Plans for Achieving Self-support (PASS) provisions, two very important tools which can be utilized by school personnel and rehabilitation agencies in developing individual plans to assist people with severe disabilities to enter or advance in the workforce.

IRWE-Impairment Related Work Expenses

The IRWE provision allows for the deduction of certain expenses when calculating earnings. These expenses would be for impairment-related services or items that a person needs in order to work. The employee must be responsible for paying the out-of-pocket expenses.

The IRWE provision has the potential for being a significant resource for educators and rehabilitation personnel to assist people with severe disabilities in securing meaningful employment. Persistent problems such as special transportation, adaptive equipment or specialized devices can be addressed through the IRWE provision. The deduction for transportation can include expenses incurred by people who are unable to use public transportation because they cannot comprehend written instructions, as well as by those with physical limitations. The deduction of an IRWE can enable those earning significant incomes to pay for work expenses and continue to be eligible for cash payments.

PASS-PLAN to Achieve Self-Support

The PASS provision allows disabled people to set aside income and or resources for a specified period of time for a work goal, such as education, vocational training or starting a business. People can even set aside funds to purchase work-related equipment. PASS also can be used for hiring a job coach as part of a supported employment program plan. In the PASS program, the worker pays the cost, which is then deducted in calculating the amount of the SSI check.

Educators, rehabilitation personnel or families can help develop a PASS. This provision should be considered an incentive to qualify for SSI eligibility to enable people to secure initial employment or assist those employed to reach a higher level of self-sufficiency.

The Social Security Administration has awarded a grant to the Association for Retarded Citizens national headquarters to demonstrate how PASS can be used to enable people who are mentally retarded to increase their economic self-sufficiency. This project win be developing training materials for educators, families and rehabilitation personnel to assist more people to take advantage of the incentive program.

One Scenario

The following narration follows “Bill” through the various tiers of the SSI Program. Bill is age 17 and is currently enrolled in a nongraded secondary school program. Bin is severely mentally retarded and spends 70 percent of his school day in a special education classroom. Bill is integrated in regular physical education, industrial arts and drama classes for the remainder of his day

Bill’s special education program has been emphasizing the development of functional, age appropriate skills. Some of the functional activities of his special education program occur in the community, where he is becoming familiar with the public transportation system, with money management through shopping trips and lunch at restaurants, and exploring community work environments. At a meeting to discuss Bill’s educational program for the next school year, his teacher and vocational rehabilitation counselor described the benefits and incentives of the SSI program to Bill and his family. The education goal, related to preparing Bill to work in the community, included a plan for exploring work settings and placement in supported employment. This would take place during his last 2 years of school when he would be 19 and 20 years old. His plan for next year focuses on increasing his functional skills and expanding his awareness of the community. He would continue in regular education classes for part of the day, with greater emphasis being placed on interpersonal skills.

Bill’s parents, who have been involved in his educational planning, are giving him chores and greater responsibilities at home. They are confident that, in spite of his disabilities, he will be able to succeed in supported employment, but they are concerned that he probably will not make enough money to be self-sufficient. Bill’s family contacted their local Social Security Office and were sent more detailed information on SSI. Following instructions from an SSI pamphlet, they put the following information together to present to the Social Security people: Bill’s Social Security number; his birth certificate (original or certified copy); information about where Bill lives (he pays no rent); payroll slips, copies of tax returns, bank books, and other information about income and resources (his only work outside the home is assisting his neighbor in delivering papers, where he has managed to accumulate a bank book balance of $870.00); and medical records. Bill’s teacher assisted the family in obtaining copies of his most recent psychological, aptitude and performance testing from school records. Bill’s measured IQ was in the mid-40’s and performance testing indicated that he performs at the 7- to 9-year-old range.

The information gathered was presented at a meeting with a Social Security official who was familiar with disability programs.

Four months later Bill was notified that a determination was made making him eligible for SSI. At this time, he was 18 years old and qualified for full cash payments because his earnings were below $85 per month. His allowable cash payment of $386 per month was reduced by one-third because he was receiving in-kind support (i.e., living in his parents’ home and not paying for this expense). He was enrolled in the Medicaid program because the state in which he lives enables all SSI recipients to be Medicaid eligible.

He has continued to progress in school and has been placed by the school in a supported employment program. He works 18 hours per week and earns $3.35 per hour, for a total of $241.10 per month. The school provides a job coach and transportation to his job. The following calculations show how his earned income will effect his SSI payment: [See Table 1.)

Early in his last year of school, because Bill tired of working and wanted to spend more time in school with the activities he enjoyed, he left his job. In addition to being involved in set design and stage crew work with his drama class, he was also spending an additional period a day in his automotive class; consequently, he developed friendships with students in these classes. While he was not working, his cash payment returned to $246.00 per month.

His interest in cars and automotive work was strengthened by encouragement from the shop teacher. During the spring of his final year, he was placed in a part-time supported employment position at an automobile dealership, where he worked 15 hours a week assisting with the dealer preparation of new cars and cleaning and polishing used cars. The coaching he received from school staff became intermittent, and by the time he completed school he was working independently. The managers of the dealership offered him a full-time position. Because Bill was unable to secure transportation to and from work, his rehabilitation counselor was able to arrange special transportation with a retired neighbor to drive Bill to and from work, at a cost, or IRWE, of $30 a week. The calculations in Table 11 demonstrate how this was deducted from his gross earnings. This expense was discussed with Bill’s SSA case representative and was allowed as an IRWE because the transportation cost was related to his disability (i.e., it would not be incurred by a nondisabled person who could drive or comprehend a complex web of public transportation). Bill is working a 40-hour week and is paid $3.75 an hour. The dealership does not pay health benefits to any of its employees.

Bill has been working at the auto dealership for more than I year and is now earning 4.25 per hour and continues to work 40 hours a week. He wants to get his driver’s license and purchase a car. Bill’s father has taken him driving and feels that if he could pass the driver examination he could become a responsible driver. With the assistance of Bill’s former vocational counselor they located a driving school that has helped mentally retarded people to obtain their licenses. The course will cost $1,200 and will last for I year. Bill continues to save money to purchase a quality used car.

Bill’s father helped him prepare a Plan to Achieve Self-support (PASS). After discussions with the SSA case representative they formalized a plan which would lead to increased independence and possible access to a better paying job. It included a specific vocational objective, specific savings and disbursement schedule, and the time period for achieving the objective. The plan would pay for the driver training cost. The SSA representative advised them to eliminate the IRWE for transportation to work and include it in the PASS, because this expense would be time limited. Expenses in the PASS are shown in Table 111.

Hopefully, Bill will meet the goal of his PASS. If this doesn’t happen in a year, the timeframe may be extended if the goal continues to be feasible. Bill’s scenario has been used as an example of how a person might access the benefits and incentives of SSI. Some day Bill might reach the break even point where his SSI cash payment would be eliminated. However, the 1619(b) provision would provide continued Medicaid coverage if his income does not allow him to purchase comparable health care coverage.

PASS To Support Job Coach Expenses

The PASS work incentive provision of the SSI program allows people with disabilities to set aside income and/or resources to be used to achieve a specific work goal. A PASS may include the purchase of ongoing coaching or job advocacy support to obtain or maintain employment. The purpose of the PASS is to increase the individual’s income producing capacity, thus reducing reliance on government support in the long run.

For a PASS to be approved by the Social Security Administration there must be a reasonable chance that the person can achieve the vocational goal and there must be a clear connection between the goal and the client’s increased earning capacity. PASS makes it financially feasible for people to set aside or save income to be used in achieving their vocational goal by enabling them to continue to be eligible for SSI or receive higher SSI benefits as they work towards self-sufficiency.

A PASS can be established either before or after a person goes to work. Initiating a PASS prior to the time a person leaves or “ages out” of school could enable a student receiving transportation, job coaching or other support services to continue them after leaving school. To be approved for SSI purposes, each PASS must meet the following requirements:

* The plan must be specially designed for the individual and have a designated and feasible occupational goal. The goal must be clearly stated indicating the type of employment or job being sought to improve self-sufficiency. The plan must also indicate that once the goal is attained, the person’s income producing capabilities will be increased.

* A specific timeframe must be established for the PASS. The PASS can be developed for an initial time period up to 18 months. An additional 18-month extension is possible as is an additional 12-month extension if a lengthy training program is involved.

* The plan must state the sources and amount of income to set aside. The plan must also state how the money set aside will be spent to achieve the goal.

The PASS must be in writing, but there is no mandatory format. The Social Security Administration has prepared a checklist for use in developing a PASS. The Social Security case representative will have the checklist and should also be available to assist in writing the plan.

The following example is used to illustrate how the PASS might be used to help another student, Mike, attain a higher level of self-sufficiency and continue support services which were available to him while he was enrolled in school.

Mike has been involved in a cooperative vocational education program for the past 2 years of school. He is employed 25 hours a week in the food services department in a nearby nursing home. He receives 2 hours of job coaching services per day to assist him in eventually achieving independent employment status. Transportation to his job is currently provided by his school. Because he will be turning 22 in the summer, Mike will be leaving school at the end of the current school year.

School personnel, Mike’s parents, his VR counselor, and his Social Security case representative have developed a PASS which will go into effect when he leaves school. His occupational goal is to become a full- time food service employee at the nursing home. The PASS is for an initial 18-month period. The income to be set aside will pay expenses for job coaching services and transportation. The amount set aside for his PASS cannot exceed his countable earned income. The calculation in Table IV demonstrates how this is figured.

Mike’s Federal Payment Rate set aside $140 per month for his coaching and travel expenses. He paid the PASS expenses out of his total monthly income. The job coach and transportation services could be provided through an adult services provider or might be arranged independently. If Mike showed progress toward his goal the PASS could be extended to a maximum of 48 months with the approval of his Social Security Case Representative.

Implications for Education and Rehabilitation Personnel

Early transition planning and gainful employment for students with more severe disabilities prior to their leaving school is being recognized as a critical element in successful education programs. School personnel are becoming increasingly involved in the employment process. This involvement has stimulated the development and implementation of curriculum changes which reflect the demands of actual jobs in the community. School personnel are beginning to interact with families, rehabilitation personnel and community service providers in an effort to ensure an orderly transition of case management responsibility from school to adult services. The benefits and incentives included in the SSI program can be used as a source of support for the person making the transition. Major studies on supported employment indicate that the majority of people with severe disabilities are working much less than a full 40-hour week. Average wages chronicled in reports on people participating in supported employment are significantly lower than the Substantial Gainful Activity (SGA) level of $500 per month. In addition to low pay, these reports indicate that many clients involved in supported employment are in jobs which do not have benefit programs such as health insurance. Transportation is also cited as a barrier for some. By ensuring that eligible people connect with the SSI program while in school, the program’s benefits and incentives can be used to strengthen and support those who have secured employment while in school.

The basic barrier to accessing these program resources relates mostly to the widespread lack of understanding of the programs by families, educators, rehabilitation counselors, and adult service providers. It is especially important to have a basic understanding of the eligibility requirements. Generally, people with severe disabilities who require ongoing support are found to be eligible for the SSI program. School personnel and rehabilitation counselors are urged to develop a collaborative working relationship with local SSA Offices and personnel to ensure that this program can be incorporated into the transition planning process occurring in the schools.

COPYRIGHT 1991 U.S. Rehabilitation Services Administration

COPYRIGHT 2004 Gale Group