TWWIIA Initiatives and Work Incentives: return-to-work implications – Ticket to Work and Work Incentives Improvement Act
Richard T. Roessler
Signed into law on December 17, 1999 by President Clinton, the Ticket to Work and Work Incentives Improvement Act (TWWIIA) addresses a very important question, “what will it take to increase the return-to-work rate for Social Security beneficiaries and recipients?” Prior to TWWIIAA, efforts to improve employment rates of beneficiaries and recipients have not had great success. Less than one percent of people receiving Social Security benefits ever resumed employment. If only twice that small number returned to work, the lifetime savings to the Disability Insurance Trust and General Revenue Funds would be approximately $3.5 billion (McManus, 2001). Effective return-to-work supports and incentives are, therefore, very important to the Federal Government and to the some 15% to 30% of beneficiaries and recipients who maintain an interest in employment (Marini & Reid, 2001).
Whether TWWIIAA initiatives have their intended impact depends a great deal on their ability to remove or reduce barriers to employment that people with disabilities experience. Although myriad barriers exist (Marini & Reid, 2001; Marini & Stebnicki, 1999), the primary concern of many people receiving Social Security benefits is the perceived cost of going to work. Their fears may be summed up very succinctly, “go to work and lose your check” or, perhaps more to the point, “go to work and lose your medical benefits” (O’Day, 1998). These costs reduce the extrinsic value of the work goal, thereby decreasing the probability that individuals will make the effort to seek employment (Moore & Powell, 1990). Thus, the success of TWWIIA initiatives rests on their ability to enable people to return to work without incurring unacceptably high costs. In this article, the provisions of TWWIIAA are reviewed, with an emphasis on their potential to help beneficiaries and recipients successfully return to work (Jensen & Silverstein, 2000).
Ticket to work. First and foremost, TWWIIA initiatives include a “no-cost” return-to-work ticket that will help individuals with significant disabilities resume employment and reduce their need for cash benefits. Individuals may use their tickets to obtain vocational rehabilitation services from an approved provider referred to as an Employment Network or EN. As of January l, 2001, cessation of continuing disability reviews (CDRs) occurs while a person is using a ticket. Moreover, it is understood that CDRs are not triggered by the attempt to work (Social Security Administration, 2001).
Referred to as the Ticket to Work and Self-Sufficiency Program, the ticket program involved 13 states in its first phase. Ticket services are provided by members of the Employment Network which is managed by Maximus, Inc. (Satterfield, 2001). Eligible beneficiaries and recipients will receive a ticket in the mail that they may assign to an Employment Network. Participation in the TWWIIA ticket program is voluntary, and ticket holders may also retrieve and reassign a ticket if they choose to do so. The ticket is a personal document with the person’s name and Social Security number on it. Employment Networks include any qualified state, local, or private organization, including state VR agencies, one-stop career centers, public or private schools, and employers. Part of an approved network of service providers, Employment Networks are commissioned to develop Individual Work Plans with beneficiaries and recipients (McManus, 2001).
Employment Networks may receive payments on either a 60 month outcome plan or an outcome-milestone plan. The proposed outcome payment for Employment Networks over 60 months is 40% of the average monthly SSDI or SSI benefit for every month the beneficiary does not receive benefits due to earnings from work. The proposed outcome-milestone payments occur for certain achievements such as working three and seven months of a 12 month period, with subsequent payments for outcomes. The outcome-milestone payment system results in slightly lower compensation to the Employment Networks. State rehabilitation agencies may decide on a case-by-case basis whether they would prefer to be paid as an Employment Network or under the traditional reimbursement for cost approach (Silverstein & Jensen, 2000).
Work Incentives Advisory Panel. TWWIIA establishes a Work Incentives Advisory Panel, appointed by the President and Congress, to advise the Commissioner of Social Security on the implementation of the ticket program. One-half or more of the Panel members are to be people with disabilities or representatives of persons with disabilities (Social Security Administration, 1999a).
Employment Support Representatives. TWWIIA initiatives include the establishment of a nationwide group of employment support representatives (ESR) within SSA to help people use work incentives, to provide outreach about work incentives, and to train claims representatives in the use of the work incentives. As of July, 2000, 32 new Employment Support Representatives were serving beneficiaries in 54 locations (Social Security Administration, 2001).
Retention of medical insurance. TWWIIA provides important incentives that decrease the cost of employment for people currently receiving Social Security benefits (see Social Security Administration, 2001). Starting October 1, 2000, TWWIIA enabled individuals with disabilities to maintain medical coverage through Medicare while working for as long as 93 months after the Trial Work Period (TWP; i.e., 102 months of coverage when the 93 months are added to the nine months of the trial work period). Depending on the availability of state funding, individuals with income above 250 percent of the federal poverty level may be able to purchase Medicaid coverage, if they are working, but need assistance to cover medical costs (Social Security Administration, 1999a).
Expedited reinstatement of benefits. TWWIIA provides for expedited reinstatement of benefits. Effective January 1, 2001, when individuals’ Social Security or SSI disability benefits have ended because of earnings from work, they would be able to request reinstatement of benefits without filing a new application. They must file their applications within 60 months from when their benefits were terminated. They may receive temporary benefits, as well as Medicare or Medicaid, for up to six months while SSA reviews their cases. These benefits are not considered an overpayment if the person is found not disabled. Expedited reinstatement of benefits does not pertain if the worker has been laid off due to economic conditions (Social Security Administration, 2001).
Benefits planning, assistance, and outreach. In addition to funding expanded protection and advocacy services, TWWIIA initiatives include important community-based work incentives planning and assistance programs termed benefits planning, assistance, and outreach projects (BPAO projects). By the end of 2001, SSA had awarded $23 million to 117 organizations in 50 states and five territories to establish BPAO projects. The purpose of these community-based programs staffed by well-trained benefits specialists is to provide work incentives planning and assistance to people currently receiving Social Security benefits. The role and key functions of the benefits specialists are described in the Appendix (J. McDonough, personal communication, October 10, 2001).
Services from these new benefits planning, assistance, and outreach programs have the potential to increase a person’s motivation to return to work. First, these programs provide services that will improve the beneficiaries’ and recipients’ perceptions that they can manage their benefits and include employment in their life plans. Second, they provide a direct resource working on behalf of the individual to guard against the perceived costs of attempting to return to work exceeding the benefits of doing so. As noted, an important function of the benefits specialist is to help people understand the many work incentives available in the Social Security Disability Insurance and Supplemental Security Income programs.
Work incentives are provided under Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). Some incentives are common to both programs; some are not. For example, continuation of benefits while in vocational rehabilitation is assured under Section 301 of the Social Security Amendments of 1980 and is available to individuals receiving either SSI or SSDI. Individuals who, due to VR services, medically recover and are no longer considered disabled by SSA may retain benefits as long as they are actively involved in vocational rehabilitation. Their benefits will continue if services increase the likelihood of permanent independence and self-sufficiency. A brief review of SSDI (Social Security Administration, 1999b) and SSI (Social Security Administration, 1998) work incentives helps to clarify how Social Security provisions are attempting to reduce the cost of returning to work, and, thereby, increase a person’s instrumental motivation to seek employment.
Social Security Disability Insurance (SSDI). Social Security Disability Insurance (SSDI, Title II) requires an insured status earned through work credits accumulated in employment. To receive SSDI, the person must have a disability and be unemployed or earning less than $780 dollars a month (or $1300 if blind). These dollar amounts are referred to as SGA or substantial gainful activity. SSDI is not based on economic need, and the level of SSDI benefit is dependent on amount of money contributed to the Disability Insurance Trust Fund through FICA (Federal Insurance Contributions Act; Social Security Administration, 1999b). Important SSDI provisions and work incentives include the Trial Work Period, Extended Period of Eligibility, Expedited Reinstatement of Benefits, Unsuccessful Work Attempt, Medicare Extension, Impairment-Related Work Expenses, and Subsidies and Special Conditions (see Social Security Administration 2001).
The Trial Work Period (TWP) spans nine months (not necessarily consecutive) in which the person can work and receive full benefits, regardless of earnings. A trial work month is designated only if the person earns more than $560, an earnings level at which work is considered “services.” Beginning with the date of the month of entitlement or the month of application, whichever is later, the Trial Work Period provides opportunities to test work skills while maintaining full benefit checks. After the TWP, the individual will be paid benefits for the first month of SGA (cessation month) and the two succeeding months (regardless of SGA in those months). These three months are referred to as the “grace period.”
The extended period of eligibility (EPE) runs 36 months after the end of the trial work period, beginning with the month following the trial work period. In the EPE, the person receives benefits any time earnings are below SGA ($780 a month or $1300 if blind). An accurate and consistent reporting of earnings is necessary during the EPE. If the individual does not achieve SGA during the EPE, eligibility for benefits continues only until the first month of SGA after the 36th consecutive month. The individual will receive cash benefits for that month and two additional months, at which point eligibility for benefits ceases.
Expedited reinstatement of benefits following an unsuccessful return to work attempt is available to the person for up to 60 months after the extended period of eligibility. The person must be unable to perform SGA due to the same condition that allowed the person to receive benefits initially. Provisional benefits are available for six months; the person does have to pay these funds back if not found to be disabled. Once the person receives benefits for 24 months a new TWP and EPE is provided.
An unsuccessful work attempt is an effort to do substantial work that stops within six months due to disability, or results in lower than SGA earnings. Earnings during an unsuccessful work attempt are not counted in establishing eligibility for SSDI or SSI. An unsuccessful work attempt can also occur after the TWP during the EPE.
TWWIIA extends Medicare (Title XVIII) beyond the trial work period (nine months) to at least 93 months more for a total of 102 months or 8.5 years. The 93 months begin after the last month of the trial work period. Part A (hospitalization) of Medicare is provided, but individuals must pay a $54 monthly premium for Part B (medical insurance). The Part B premium is typically deducted from the person’s SSDI check. Individuals have the option of buying Medicare Part A and Part B once the extended coverage is exhausted, if they have low income, limited resources, and large medical expenses.
Impairment-related work expenses or IRWEs allow a beneficiary to reduce income below SGA levels. The costs of impairment-related items and services are subtracted from gross earnings in calculating SGA. There is no time limit for the person using an IRWE, and any legitimate one-time expenses may be taken either all in one month, or pro-rated over 12 months. For example, IRWE expenses include wheelchairs, transportation to and from work, prescription drugs, dialysis equipment, and a personal attendant.
Subsidies and special conditions represent support a person receives on the job resulting in more pay than the actual value of the services the person performs. Subsidies are sometimes applicable to both SSI and SSDI. Subsidies occur in cases when an employer provides extra support or supervision, or in case the employee produces at a rate below industry standards. Again dollar amounts of the subsidies are subtracted from gross monthly earnings in calculating SGA. Special conditions include items of support provided by someone other than the employer, e.g., when the VR agency purchases a computer for a client (Social Security Administration, 2001).
Supplemental Security Income (SSI). Supplemental Security Income (SSI, Title XVI) is available for persons who are disabled or blind and meet income and resource tests (e.g., personal assets having a cash value of less than $2000 for an individual and $3000 for a couple). The maximum monthly amount that an individual can receive is $545; a couple, $817. In calculating SSI cash benefit levels, Social Security allows individuals both a general income exclusion ($20) and an earned income exclusion ($65). These exclusions reduce the qualified income level of the recipient, resulting in higher SSI cash benefits. Cash benefits from SSI are also increased because the earned income remaining after the exclusions is divided in half to determine available income for the individual. Young people receiving SSI can qualify for a Student-Earned Income Exclusion as well, allowing individuals under age 22 who attend school to exclude up to $1320 of earned income per month (up to a maximum of $5340 per year).
Expedited reinstatement of benefits (for a 60 month period after returning to work) is also available for SSI recipients who start work but become too disabled to continue. Continuation of Medicaid (Title XIX) eligibility is possible, if a person is disabled and unable to afford benefits equivalent to those received if not working. New Medicaid provisions permit states greater flexibility to cover people with disabilities who work, e.g., Medicaid buyins at higher income levels. In general, a person’s Medicaid will continue, even after SSI payments stop, until his or her income reaches a level specified by the state (Social Security Administration, 2001).
The Plan for Achieving Self-Support (i.e., PASS Plan) is a SSI work incentive that sets aside income or resources, helping a person with a disability achieve a specific work goal. The plan requires that the person have income other than SSI benefits to invest such as earned income or SSDI benefits. The PASS plan has no time limitations but stipulates a reasonable timeframe. Progress toward the work goal is reviewed on a six month basis. The plan must be in writing, and the person must be willing to keep any money set aside for the work goal in a segregated account. Prepared to help the person decrease or eliminate the need for benefits, a PASS Plan can be established to cover the costs of obtaining an education, receiving vocational training, starting a business, or purchasing support services. Designed to help people start work, not for ongoing costs of working, PASS Plans must have the potential to increase the person’s earning capacity. PASS specialists and Employment Support Representatives are available at Social Security to help people develop PASS Plans (Social Security Administration, 2001). Benefits specialists with the BPAO projects will also assist in the development of PASS Plans.
Impairment-related work expenses in SSI enable individuals to recover some of the work-related expenditures incurred as a result of their disability. Work-related costs are deducted from monthly gross wages, which increases SSI cash payments. The person must pay for the item without reimbursement, and expenses must be paid for in the month in which work was performed. Blind work expenses (BWEs) allow for exclusion from income of any ordinary and necessary expenses attributable to the earning of income. BWEs need not relate directly to individuals’ blindness; they need only be work-related, reasonable, and not in excess of countable income. Examples of blind work expenses include guide dogs, transportation, meals consumed during work, mandatory pension requirements, Federal and State taxes, FICA, and Medicare (Social Security Administration, 2001).
An illustration of work incentives. Using the various work incentives available in SSI (Social Security Administration, 2001) in the case of a fictitious recipient, one can illustrate how going to work does not automatically result in losing one’s cash or medical benefits. Daryl Maxwell receives an SSI payment of $545 each month along with Medicaid coverage. He has a part-time job offer in a copy shop where he can earn $215 a month, and he wants to know how his earnings will affect his SSI benefits.
Gross Monthly Earnings: $215
Subtract: $ 85 (general and earned
Divided by two = $ 65 (part of the approved
Subtract $65 from $545 $480
Plus his monthly earnings $215
Total Income $695
Daryl now earns $695 dollars instead of $545, and he retains his Medicaid. Daryl can work and not lose his cash or medical benefits.
Suppose Daryl’s pay increases to $367 a month, but he purchases an electric wheelchair, which costs $60 a month. His wheelchair cost is considered an impairment-related work expense. His gross earnings are decreased by $85 dollars (general and earned income exclusions), and the work expense is deducted from that amount, leaving $222 of earned income, which is divided by 2, leaving $111. $111 is subtracted from his SSI payment of $545, resulting in a monthly SSI payment of $434, to which Daryl can add his gross earnings of $367 dollars for a monthly income of $801, instead of $545. Daryl retains his Medicaid, once again demonstrating that he can work and not lose his cash benefits and medical coverage.
Demonstrations of benefit calculations using work incentives redirect the discussion to our original question, “What will it take to encourage more Social Security recipients and beneficiaries to return to work?” The answer may lie in the TWWIIA initiatives like the ticket to work, expedited reinstatement of benefits, BPAO projects and the work of their specialists, and the many work incentives. Whether that is the case, however, depends on the outcomes that people with disabilities achieve. If benefit outlays decrease and return-to-work rates increase, then the approach is effective. Such outcomes, should they occur, provide evidence that TWWIIAA has successfully addressed key motivational concerns on the part of people with significant disabilities.
Richard T. Roessler prepared this paper in his role as the program development specialist for Project A-WIN, a Benefits Planning, Assistance, and Outreach Project funded by the Social Security Administration. Roessler is currently the Research Coordinator at the Disability Research Institute in the College of Applied Life Studies at the University of Illinois at Urbana-Champaign.
Functions of the Benefits Specialist
Information and referral–Specialists provide written and verbal information in response to questions regarding all Federal and State benefit programs, e.g., questions about initial and continuing eligibility for programs, the impact of employment and other changes on benefit status and amount, and information on work incentive provisions. Specialists refer consumers to government agencies and to other community services and resources.
Benefits analysis and management–Specialists collect data on the person’s current benefits status; provide critical analysis of the impact of work and earnings on those benefits; and make recommendations regarding an ongoing benefits plan so as to support the person’s informed choice regarding a course of action. They assist the person in designing, implementing, monitoring, and evaluating the outcome of a long-term support plan and help the individual evaluate the effects of employment or changes in other benefits programs on the person’s benefit status, health care, or overall financial well being.
Problem solving and advocacy services–Benefits specialists provide time-limited, intensive assistance to beneficiaries and recipients with respect to federal and state benefit and work incentive problems. These services include gathering information specific to the person’s situation, analyzing that information, generating possible solutions, and advising the person on potential courses of action. Specialists may advocate on behalf of the person with other agencies and programs which can require in-person, telephone, and/or written communication with the individual and other involved parties, generally over a period of several weeks to several months.
Outreach–Specialists inform beneficiaries and recipients and their families and educational and human services professionals of available work incentives. Outreach efforts must be directed at culturally diverse audiences and conducted in a variety of languages.
Data collection–Specialists help to maintain a database on type and number of individuals served and work incentives used.
(J. McDonough, personal communication, October 10, 2001).
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Richard T. Roessler, Ph.D, CRC, Research Coordinator, Disability Research Institute, College of Applied Life Studies, University of Illinois, Champaign, IL 61820. Email: firstname.lastname@example.org
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