It Doesn’t Take a Rocket Scientist:
To Understand & Use Social Security Work Incentives
PASS Plans & Title XVI
The Person Receiving Earned Income and SSI
People who have earned income from employment may set aside
countable earnings in a PASS. (Once the PASS is written
and approved by SSA, the person’s SSI check goes up to
FBR of $579, if all countable income is excluded in
the PASS.) This
is a typical scenario for people receiving SSI. As was
mentioned earlier, people receiving only SSI must also
be receiving a paycheck in order to have a PASS. In this
scenario below, over
a 36 month period, the person accumulates $11,970.
Note: If the SSI recipient’s
pay fluctuates significantly, the PASS plan should be adjusted.
If the PASS is originally written addressing the person’s
maximum monthly pay, and his/her earnings fall, then the person
will be responsible for paying a portion of the PASS expense
out of their personal money, or the PASS must be modified
to reflect a lower or average earnings rate.
Example:
Nick has been getting $637 in SSI. At his new job he earns
$300 a month, which reduced his SSI benefits to $471.50. He
needs uniforms for work. His PASS allows him to set aside $107.50
of his pay check for uniforms, and increases his SSI monthly
benefits by the same amount to $637.
A Person with Resources in Excess of Allowable Limits
Individuals receiving SSI benefits, who receive additional
income that threatens to put them over the Title XVI resource
limit, may use PASS plans. For example, an SSI beneficiary receives
a lump sum due to termination from a company that had supplied
him/her with a retirement plan. By setting aside the amount of
the payment into a PASS, the person remains eligible for SSI
and Medicaid.
Example: Olivia’s father recently
died and left her an inheritance of $4,000. She now has resources
that exceed the allowable limit and may lose her SSI benefits.
Her PASS plan sets aside $2,500 of her inheritance for purchase
of a computer to help her with her community college course work,
which lets her keep her SSI benefits and Medicaid.
Another example is a person who, although eligible for SSI/Medicaid
due to disability, may be above the SSI resource limit because
of trust funds, parental donation or support, or some other form
of outside funding. Using the money to support a PASS plan, thereby
reducing the resources below $2000 (see SSI Resource Test on
page 7), will allow the person to become financially eligible
for SSI/Medicaid while helping the person achieve a vocational
goal.
A third example is a person who loses a job through down-sizing
and receives a $5000 lump sum severance payment. He/she is now
$3000 above the resource limit. By putting $3000+ into a PASS
to establish a business or purchase job-related equipment and/or
education, the person remains eligible for Medicaid/SSI, and
has invested in his/her own future.
A Person with Earned Income (In the Near Future) and Receiving
SSI
Projected earnings from employment may be used to fund
goods and services in a PASS. The approved PASS plan will begin
setting aside countable wages starting with the first month of
employment. This is a pro-active approach to PASS plans. A person
who is buying into a business during his tenure as an employee,
or buying equipment or tools that will enhance his/her self-sufficiency,
may use this.
