It Doesn't’t Take a Rocket Scientist:
To Understand & Use Social Security Work Incentives
Title XVI - SSI Supplemental Security Income
SSI is
a needs-based program and
provides a minimum level of monthly income ($637 for
2008 = Federal Benefit Rate, FBR). In order to be eligible
for SSI individuals
must fit into one of the following categories:
• Disabled (according to Social Security rules),
• Blind: 20/200 or less in the better eye with
glasses, or field of vision less than 20 degrees; or
• Aged 65 or older
And
• They must meet the income and resource test.
For Example:
Fred is 20 years old, disabled since birth, has no financial
resources, and receives no other income or benefits. He is
eligible for SSI benefits of $637 a month in 2008.
SSI Resource Test
The SSI program has specific resource limitations that are set
by law and include real or personal property and cash. These
resources must not exceed the specified amount at the beginning
of each month. The current limit is $2000 for individuals and
$3000 for couples.
Resources not counted include, among others:
• the home lived in and the land it is on;
• household goods and personal property that do not exceed
$2000 in value;
• burial spaces for the person and their immediate family;
• burial funds for the person and their spouses valued
at not over $1500; life insurance policies with a combined
face value of not more than $1500 per person;
• retroactive Title XVI or Title II checks—within the first
six months of receipt;
• resources for an approved PASS and Property Essential
for Self Support;
• property in trust to which the SSI recipient has no access;
payments made to a person (or spouse) to aid crime victims;
• one automobile, regardless of value, if it is necessary
for work and/or medical treatment, is modified, or is necessary
due to climate, terrain, distance, or similar factors to
perform essential daily activities;
• term life insurance policies and policies owned by others.
FBR and Other Income
Each year Congress establishes the SSI Federal Benefit
Rate (FBR), which is the maximum federal amount that individuals or couples
can receive as a monthly cash benefit. The FBR for 2008 is $637. The
amount of monthly SSI actually received, however, is affected by the
following factors:
• Living arrangement and in-kind support;
• Unearned income (Title II benefits, Veterans Administration
benefits, deemed income from a non-disabled spouse, parent, etc.);
• Earned income and any use of available Work Incentives such
as IRWE, BWE, and PASS; and State supplement, if any.
For Example:
Gail has been receiving SSI benefits of $637 a month
(the FBR). She is now working and is earning $635 a month.
Her SSI benefits are reduced (based on the formula below)
and she will receive $362/month in SSI.
SSA uses a formula to determine how much an SSI recipient
loses from his/her SSI check when earning wages.
SSA Formula
|
Example
|
1. Monthly Gross Earnings
- $85(SSI Exclusions)
= Difference
|
$635.00(earnings)
-$85.00(SSA Exclusions)
=$550.00
|
2. Difference
÷ 2
= Countable Income
|
$550.00
÷ 2
= $275.00
|
3. FBR
-Countable Income
=Amount of SSI Check
|
$637.00(FBR 2004)
-$275.00
=$362.00(SSI benefit check) |
Due to monthly earnings of $635, the FBR of $637 is reduced
and the SSI check due is $362. The $275 Countable Income deduction is
the amount available to be used in a PASS plan. More about this on page
21.
HINT: Title
XVI PASS Rule: The Countable Income that is deducted
from a recipient’s SSI check can be used to fund goods, services,
and education in a PASS Plan. Where there is no other source
of countable income or resources available to the SSI recipient,
he/she
must be working in order to have a PASS.
Medicaid Eligibility & Title XVI
In 32 states, eligibility for SSI automatically entitles the person to
Medicaid. In the remaining states, the state uses either SSA’s or
their own stricter definition of eligibility to determine Medicaid eligibility.
If a person fails to meet their state’s stricter Medicaid criteria,
their eligibility for Medicaid under 1619(a/b) depends on their receiving
medicaid in the month before they enter 1619(a/b).
Some health and medical services are mandatory under
Medicaid, while others are optional and may include: physician care,
pharmacy services, podiatry care, home health care, certain medical
supplies, communication devices, wheelchairs, x-ray services, eye examinations
and glasses, psychiatric services, and some dental care.
For Example:
Harry receives SSI and lives in Montana. He is automatically
eligible for Medicaid. When he goes to work and begins earning
$1250 a month, he will not be due an SSI check due to the
amount of his earnings, but he will keep his Medicaid because
of his 1619(b) status.
Harry’s cousin Ida lives in a different state and also
receives SSI, but is not automatically eligible for Medicaid.
She must meet her state’s criteria for Medicaid eligibility.
1619(a) & 1619(b)
Public Law 99-643, enacted on July 1, 1987, created two Work
Incentives for SSI recipients under Section 1619 of the Social
Security Act. These are known as 1619(a) and 1619(b)
1619(a)
Section 1619(a) allows people who continue to be disabled
to receive SSI checks and Medicaid benefits when their earnings
are over the $940 SGA level in 2008. The person continues in
1619(a) status as long as he/she meets all other eligibility
requirements for SSI/Medicaid, and his/her earnings are more
than the SGA amount per month but less than the SSA “Break-Even
Point” (BEP = $1,359 in the year 2008). Once a person
reaches the “Break Even Point,” his/her SSI check
is reduced to $0, but the person is still considered eligible
for SSI
1619(b)
Section 1619(b) provides continued Medicaid eligibility for people who aren’t
due SSI benefit checks because their monthly earnings put their countable income
above the Break-Even Point.
A second criteria for 1619(b) status requires that
a person's gross earnings fall below certain limits called "threshold
amounts." Earnings at or
above the threshold amounts are considered to be sufficient
to replace the cost of Medicaid coverage. Threshold amounts vary from
state to state.
Individual thresholds are computed when people have
higher than average medical costs, such as attendant care or frequent
hospitalizations. Individuals
are no longer eligible for 1619(b) when their earnings
exceed their individual or their state’s threshold amount.
The final criteria for 1619(b) continued Medicaid is the Medicaid
Needs Test. Does the person need Medicaid in order to work? The
individual needs to tell SSA how he/she has used Medicaid in
the last 12 months, and/or expects to use it in the next 12 months,
or the need for Medicaid if he/she should be injured or ill within
the next 12 months. Based on past, current, or future need, SSA
will decide the person meets the Medicaid Needs Test, and Medicaid
continues.
To qualify for 1619(b) Medicaid status, a person must:
• Have a disabling condition/blindness;
• Need Medicaid in order to work;
• Be unable to afford benefits equivalent to those received
if not working; and
• Meet all other requirements for SSI.
Importance of 1619(b)
Section 1619(b) not only protects Medicaid
coverage, but also
maintains eligibility to receive SSI cash benefits
in future months if countable income falls below the "Break
Even Point." A person moves into 1619(b) status if she/he
is not due an SSI check because of the amount of earned
income. If individuals no longer meet SSI eligibility criteria,
due to
any other non-disability requirement, such as resources
above $2000, eligibility is suspended until all eligibility
requirements
are met. Suspension can last for up to 12 months, beginning
when
benefits should have been suspended (regardless of when
SSA actually takes suspension action). Individuals will
be reinstated without
filing new applications for SSI if all eligibility requirements
are met again within 12 months following the first month
of ineligibility. After 12 months of suspension, a new
application must be filed.
In-Kind Support
Individuals who live in someone else's home and pay no
money for their food and
shelter expenses are considered to be receiving full "in-kind
support." People falling into this category will have
their SSI checks reduced by one-third of the FBR amount.
According to SSA rules, this is referred to as the "value
of the reduction."
For Example:
Jason has been receiving $637 in SSI monthly benefits.
He recently moved in with his sister Kathy, who gives him free
room and board. Jason’s SSI check will be reduced by 1/3
to $424.67/month because Kathy is providing him full in-kind support.
Summary Chart |
| Title II |
Title XVI |
| Social Security Disability Insurance |
Supplemental Security Income |
| SSDI & SSDAC |
SSI |
| disabled and having insured status as a worker or child
of worker |
little or no work record, limited income and resources,
and disabled |
| benefits based on earnings, age and number or recipients
on record |
benefits based on living situation and any earned and/or
unearned income
|
| either eligible and receive full benefit check or ineligible
and receive no benefits (all or nothing) |
if eligible, will receive FBR of $637, which will be reduced
based on countable earned/unearned income |
| Medicare medical coverage (Parts A and B), after 24 months |
Medicaid automatic in 32 states
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