It True that SSDI
Beneficiaries Can Only
Work Part Time?
Misinformation about wages and their impact on SSDI checks and Medicare has led many SSDI recipients to limit the hours that they work and/or to turn down raises on occasion for fear that they would lose these benefits. While earning less than Substantial Gainful Activity ($830/month for 2005; or $1380/month if you are blind), is a criterion for SSDI eligibility, there are several work incentives which can be utilized to lower a person’s countable earnings, thereby allowing them to maintain SSDI eligibility. Two of the SSI work incentives covered previously (IRWE and BWE) are also available to SSDI recipients.
SSDI Work Incentives Include:
- Substantial Gainful Activity (SGA), which allows a beneficiary to earn up to the SGA level ($830 in 2005 or $1,380 (if blind) per month in 2005) without losing his/her SSDI;
- Trial Work Period (TWP), which allows people to try work without losing medical and financial benefits;
- Extended Period of Eligibility (EPE), which follows the TWP and protects a person’s disability status for up to 36 months, even if the person grosses over Substantial Gainful Activity (SGA);
- Extended Medicare coverage or purchase of Medicare following return to work (lengthened to 8 1/2 years by the Ticket to Work and Work Incentives Improvement Act);
- Impairment Related Work Expense (IRWE) (see pg. 27);
- Blind Work Expenses (see pg. 28); and
Substantial Gainful Activity (SGA)
If a person is earning income in excess of $830 ($1,380 if blind) a month (2005 figures), that person is considered to be earning at the Substantial Gainful Activity (SGA) level. However, if the worker’s productivity is equal to that of non-disabled workers in comparable positions, he/she may be determined to be earning at the SGA level even if gross earnings are less than $830/month. If SSA determines (after the Trial Work Period) that a person is earning at the SGA level, he/she will receive full benefit checks for an additional three months, and then his/her cash benefit will stop unless sufficient Social Security Work Incentives apply that can reduce how SSA looks at the earnings. Remember, for the 36 months that follow the TWP, disability status is protected and an SSDI check will be due for any month earnings are below SGA.
Trial Work Period (TWP)
SSDI/DAC recipients are entitled to a nine-month Trial Work Period (TWP), which provides opportunities to test work skills while maintaining full benefit checks regardless of earned income. The TWP begins the first month that a person is entitled to SSDI/DAC benefits or files an application for disability benefits. Only months when wages exceed $590 in 2005 (or 80 hours work for self-employed people) count as Trial Work Period months. The TWP ends after a person has performed nine months (not necessarily consecutive) of trial work within a rolling period of 60 consecutive months. The 36-month Extended Period of Eligibility (EPE) begins immediately following the nine-month TWP. Sheltered workshop earnings equal to or in excess of $590 a month in 2005 count as TWP months.
Extended Period of Eligibility (EPE)
At the conclusion of the Trial Work Period, a person will enter a 36-month Extended Period of Eligibility (EPE). During this period, a person’s Social Security disability status is protected, even if he/she grosses over $830/month in 2005 and isn’t due an SSDI check. However, during the EPE people may work and receive SSDI/DAC benefits for each month that gross earnings are below $830. The EPE ends in the first month that a person earns SGA following the 36-month EPE period.
Extended Medicare Coverage
Extended Medicare coverage is available for people who exceeded SGA during the 9-month Trial Work Period, and who continue to be disabled. The extended period of coverage is for a minimum of 39 months following the conclusion of the TWP and may extend for as long as 8 ½ years pursuant to the Ticket to Work and Work Incentives Improvement Act of 1999. Since April 1, 1990, disabled beneficiaries under the age of 65 have had the option of purchasing Medicare coverage.
Impairment Related Work Expense (IRWE)
IRWEs allow SSDI/DAC beneficiaries to reduce earnings counted toward SGA, which may keep gross monthly earnings below SGA and allow them to maintain SSDI/DAC eligibility. (IRWEs were described in full in the section on SSI work incentives.)
Blind Work Expenses (BWE)
Blind Work Expenses differ significantly from other SSA Work Incentives.
Blind Work Expenses are only available to persons who receive benefits based on being blind. An allowable BWE is any work-related expense incurred by the person, and includes those expenses that would be considered impairment related work expenses for persons with other disabilities.
As of December 1999, both the blind SGA amount and the regular SGA amount are adjusted yearly based on the national consumer price index. Before December 1999, only the blind SGA amount was adjusted each year based on the consumer price index.
2005 Amount for the Blind
Effective January 1, 2005, the monthly substantial gainful activity (SGA) amount for persons receiving Social Security disability benefits based on blindness is $1,380. The nonblind SGA amount for 2005 is $830 per month.
Subsidies generally apply to SSDI/DAC beneficiaries, but can also be used at the time of application for SSI. The dollar amount of subsidies is subtracted from gross monthly earnings of the person when calculating the amount of countable earned income. If the amount of subsidy is large enough, it will reduce countable earnings below SGA. For SSI, subsidies only apply at application if there are wages being evaluated for SGA. For SSDI/DAC recipients, however, subsides apply anytime SGA is a consideration.
Subsidies exist when employers pay workers with disabilities more in
wages than the reasonable value of the actual services performed, therefore
To qualify, the person must:
- Produce less when compared to the typical worker (employer will document this on the SSA Work Activity Questionnaire, provided by the local SSA office);
- Need extra support or supervision;
- Have fewer or easier duties;
- Have more rest periods;
- Require special equipment or transportation; and/or
- Work fewer hours, irregular hours, have frequent absences, etc.
Subsidies can be either specific or non-specific. Specific subsidies include a specific dollar amount of subsidy after calculating the reasonable value of the worker’s services. In non-specific subsidies, the employer determines the amount by comparing the work of the person with the typical employee in terms of time, skills, and job responsibilities at the workplace. This is noted as a percentage against the prevailing wage for the job.
Note: Job coach services provided to employees are an indication that the work is subsidized. If an employer cannot furnish a satisfactory explanation identifying the specific amount of subsidy, look at:
- The time, energy, skills, and responsibilities of the worker with a disability compared to the typical worker being paid the same money;
- Estimate the proportionate value of work according to the pay; and/or
- Determine how often the job coach monitors the person and how intensively involved the job coach remains.
Subsidies apply in self-employment when:
- The person has un-incurred business expenses (e.g., unpaid help in business management, tax preparation, volunteer labor, etc.);
- The person receives Soil Bank Payments (farmers/ranchers); or
- The person’s effort to provide a service or produce a product is not equal to what the standard in the community is for that type of business.
Whenever subsidies exist for working SSDI/DAC beneficiaries, SSA will reduce their countable gross monthly earnings (or net income for self-employment) by the amount of the subsidies. This often means that Social Security will then view the earnings as below SGA. When earnings are “seen” by SSA as being below SGA (even though the numbers on the paycheck are higher), SSDI checks and Medicare coverage continue.
A Rural Institute publication that
explains SSA Work Incentives