IMPACT
Volume IV Issue 3 January/February 1999Newsletter of the Assistive Technology Advocay Project
In this issue.....
.THE SSDI AND SSI WORK INCENTIVES:
FUNDING ASSISTIVE TECHNOLOGY
TO MAKE WORK A REALITY
INTRODUCTION
Both Congress and the Social Security Administration (SSA) recently proposed major policy changes to encourage more persons with disabilities to work. On January 28th, the Work Incentives Improvement Act was introduced in the Senate. On February 16th, SSA issued a proposed regulation to raise from $500 to $700 the average monthly earnings considered to be substantial gainful activity under the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. Underlying these proposals (see boxes, pp. 157 and 159), is the belief that many SSDI and SSI beneficiaries do not work because they fear losing benefits.
Although the proposals promise better work incentives for persons with disabilities, the current rules offer some powerful incentives to work under the right circumstances. This article discusses the major SSDI, SSI, Medicare and Medicaid provisions that come into play when a person with a disability works. Although this short article cannot cover all these provisions in depth, we do key on the ways to use those provisions to help leverage money for assistive technology (AT).
SSDI AND SSI; MEDICARE AND MEDICAID: THE BASICS
SSDI is a cash benefit program administered by SSA. A person who has worked and paid a sufficient amount into the Social Security trust fund will qualify if he or she has a disability which meets SSDI’s criteria. A person can also qualify if he or she is a dependent of a wage earner who is now retired, disabled or deceased. For example, many adults who became disabled before age 22 receive SSDI benefits on the earnings record of a mother or father.
Medicare is a federal health insurance program. A person will qualify for Medicare after two years of SSDI eligibility. They will qualify for Medicare Part A automatically. Part A, known as Hospital Insurance, will pay for hospital bills and other inpatient care. Medicare Part B, known as Supplemental Medical Insurance, is optional and requires payment of a premium. The 1999 premium is $45.50 per month. In many cases, the Medicaid program will pay the Part B premium for a person who is eligible for both Medicaid and Medicare.
Medicare Part B has been used to fund AT, including custom and power wheelchairs, augmentative communication devices (ACDs) and stair glides. In the case of ACDs and stair glides, an appeal will most likely be needed to establish eligibility for funding. Our AT Advocacy Project has an appeal pending involving Medicare’s denial of funding for two stair glides. We are aware of two cases from New York, and several others from out of state, in which ACDs have been approved by Medicare following a hearing. (A feature article on Medicare appears in our July-August 1997 issue of IMPACT.)
SSI is also administered by SSA. It is available to persons with limited income and resources who are aged, blind or disabled. Our focus is on SSI for persons with disabilities. New York’s 1999 monthly SSI rates are $587 for persons who live alone and $523 for persons who live with others. (See chart of 1999 SSI rates, above.)
SSI can be one’s only source of income or it can supplement other income. For example, Karen receives $320 in SSDI benefits and lives alone. The SSI program will disregard the first $20 of SSDI and subtract the remaining income from the SSI base rate. Her monthly SSI check will be $287 ($587 - 300).
Medicaid, sometimes called Medical Assistance, is a health insurance program for persons with limited income and resources. It is generally administered by the county Departments of Social Services. In New York City, it is administered by the Human Resources Agency. A person who qualifies for any amount of SSI benefits will also qualify for Medicaid automatically.
Medicaid is important to persons with disabilities as it can pay for many health-related expenses, including expenses for doctors, therapists, prescription drugs, home health care and hospitalization. It can also pay for AT or what Medicaid calls "durable medical equipment" (DME). Items of DME which Medicaid has paid for include: custom and power wheelchairs, scooters, augmentative communication devices, specialized cribs and beds, environmental control units, ramps and stair glides. A person who is appealing the denial of Medicaid funding for DME can call the AT Advocacy Project at 716-847-0650 ext 256 . In many cases, we can provide free representation or a referral to an attorney or advocate in your area who can represent you without charge.
SSDI AND MEDICARE WORK INCENTIVES
The $500 Substantial Gainful Activity Rule
Under SSDI rules, a person who works and has average gross earnings of $500 or more per month is considered to be performing substantial gainful activity (SGA). Unless this person’s wages can be reduced below $500 by using one of the work incentive rules, this person would ordinarily be denied benefits if he or she is first applying for SSDI. For 1999, the SGA amount is $1,110 per month for persons who are legally blind. The SGA amount for the blind goes up each year. [See box, below, regarding SSA’s proposal to raise the SGA amount to $700.]
An SSDI recipient who works is entitled to a nine-month trial work period (TWP). During the TWP, the person can keep both paycheck and SSDI check no matter how high the wages are. At the end of the TWP, the person enters an Extended Period of Eligibility (EPE). The first three months of the 36-month EPE is a grace period and they will get benefits for those three months. After that, the person will not receive a check for any month when gross wages are more than $500. In months when wages are less than $500, the person will get an SSDI check.
Reducing Wages Below $500 Through IRWEs
An impairment related work expense (IRWE) is a cost incurred, that is related to the person’s disability which allows him or her to work. If an expense meets IRWE criteria, it will be deducted from gross monthly wages to determine countable wages. Countable wages are then mesured against the $500 rule. The IRWE criteria breaks down to a three-part test: 1) the expense must be paid by the individual; 2) the expense must be related to his or her disability; 3) the item purchased or expense paid must allow the person to work.
Many AT-related expenses could qualify as IRWEs. These include:
(Some AT-related expenses could be the employer’s obligation under the Americans with Disabilities Act, a topic we will cover in a future issue of IMPACT.)
Consider Jennifer, who receives SSDI benefits and uses a wheelchair. She has two doorways widened and a ramp constructed at her home at a cost of $4,800 which she agrees to pay in 24 monthly payments of $200. The modifications allow Jennifer to leave the home for a job which pays $650 gross per month. The $200 expense will qualify as an IRWE and allow Jennifer to reduce her countable monthly earnings to $450. Since countable earnings are now less than $500, Jennifer will not lose her SSDI benefits even if she has finished her trial work period. Under IRWE policy, installment payments can be deducted each month during the term of the loan or installment contract. (Remember, the SGA amount may have increased to $700 by the time you read this newsletter.)
Consider Sidney, who is blind, is applying for SSDI and earns $1,200 gross per month. (Remember, SGA for the blind is $1,110 per month.) Sidney must pay $200 per month to hire a driver to drive him to and from work. Since this qualifies as an IRWE, it will be deducted to reduce his countable wages to $1,000. Since $1,000 is less than the $1,110 SGA limit for the blind, he is not performing SGA and his SSDI application will not be denied on that basis. The IRWE calculation would be the same if instead of incurring the $200 for the driver, Sidney made $200 per month installment payments on the purchase of a braille printer for his home office.
Extended Medicare Coverage When A Person Loses SSDI
A person who completes a trial work period and continues earning more than $500 in monthly countable wages will lose SSDI benefits. So long as their disability continues, however, the person is eligible for continued Medicare for 39 months following then end of the TWP. During those 39 months, Medicare will provide the same coverage that it has all along. If, for example, a person needs a replacement power wheelchair two years after the end of the TWP, the wheelchair will be covered if the Medicare criteria is otherwise met.
Even after the 39 months, a person can receive continued Medicare. If the former SSDI recipient is still disabled and is willing to pay a higher monthly premium, he or she can receive continued coverage. Depending on the nature of items which Medicare covers for the individual, this additional benefit can be very valuable.
SSI AND MEDICAID WORK INCENTIVES
SSI Applicants: The Limited Application of the $500 Rule
The $500 SGA rule, described above, applies to SSI applicants but not to SSI recipients. If one is applying for SSI, $500 in average countable earnings will amount to SGA and the application will be denied on that basis alone. As discussed above, the IRWE rules can be used to reduce countable income when measuring it against the $500 rule. (There is no SGA rule in the SSI program for persons who are legally blind.)
SSI Applicants: The Use of IRWEs When Calculating Amount of the SSI Check
IRWEs can also reduce countable income when calculating the amount of an SSI check. IRWEs can be used on application to make a person eligible for SSI, or they can be used to make the recipient eligible for a larger check.
Consider Ronald, who had polio as a child. He lives alone in a home which he owns. Recently, in his 50s, his mobility problems have worsened. Ronald receives $420 in SSDI benefits and earns $565 in gross wages per month. The combined income makes him ineligible for SSI. He is eligible for Medicare, but would only be eligible for Medicaid by paying a spenddown. (Under Medicaid rules, this means that Ronald would have to pay or incur about $50 per month in medical expenses to establish Medicaid eligibility.)
Ronald takes out a home improvement loan to make a spare bedroom into a home office that will accommodate his disability, with a widened doorway and specially designed work station to allow him to work from his wheelchair. After obtaining the loan and having the work done, Ronald will make monthly payments of $200 per month for the next three years. These payments would qualify as IRWEs and reduce countable wages below $500 for SGA purposes. The IRWEs will also reduce his countable income for calculating the SSI check.
This will be Ronald’s SSI budget if he applies for SSI after taking out the loan:
Step 1 Unearned income
$420
Exclusion
- 20
Counted
$400
Step 2 Earned income
$565
IRWE
deduction
-200
$365
Earned
income exclusion - 65
300
Additional
50% exclusion -150
Counted
$150
Step 3 Counted unearned income $400
Counted
earned income 150
Total
counted income $550
Step 4 Base rate
$587
Counted
income
-550
SSI
benefit
$ 37
For every additional $2 in IRWEs, Ronald’s SSI check will increase by $1. For example, if Ronald has difficulty typing due to arthritis and purchases a special keyboard for $100, he will have an additional IRWE of $100. However, under the formula above, his earned income would only be decreased by $50 and his SSI check would increase by $50 to $87 per month.
For Ronald, the eligibility for this minimal SSI check makes him automatically eligible for Medicaid and would eliminate his Medicaid spenddown. This is important, since Medicaid will pay for many items which Medicare will not cover, including prescription drugs and more extensive home health care. Also, since Medicare will pay no more than 80 percent of the cost of AT, Medicaid is available to pay the 20 percent copayment.
Blind Work Expenses
In calculating the SSI check, persons who are legally blind are allowed many deductions from earned income which are not allowed for any other disability. The most common blind work expenses (BWEs) include: federal, state and local income taxes; Social Security taxes; mandatory pension contributions; meals consumed during work hours; training to use an impairment related item or an item that is reasonably attributable to work (e.g., cane travel, braille, computer course for computer operator); a guide dog (cost of purchase and all associated expenses, including food, licenses and veterinary services); transportation to and from work; attendant care services (in the work setting, to get a person to and from work, and, in some cases, in the home); structural modifications to the home to get a person to and from work; and medical devices and supplies.
Consider Sam, who is legally blind, lives alone and makes $20,220 in gross wages per year, or $1,685 per month. He has the following monthly expenses that qualify as BWEs:
Income taxes (federal, state and local)
$ 70
Social Security tax
105
Union dues
10
Transportation
75
Guide dog
20
Lunches ($5 per day)
110
Readers
100
Cassette tapes
25
Computer discs
10
Total
$ 535
Calculation of SSI check:
Step 1 Total earned income
$ 1685
Exclusions ($65 + $20)
- 85
1600
Additional 50% exclusion
- 800
800
Blind work expenses
- 535
Countable income
265
Step 2 Base rate
$ 587
Counted income
- 265
SSI benefit
$ 322
For every additional $1 in BWEs, Sam’s SSI check will increase by $1. For example, if Sam purchases a special mini-computer to take notes at meetings and makes payments of $65 per month on the item, he will have an addition $65 in BWEs. This would increase his total BWEs to $600, reduce his countable income to $200 and increase his SSI check to $387.
Like IRWEs, BWEs are only deductible if they are paid by the SSI recipient. In this example, if Sam’s employer had paid for his readers, braille paper and cassette tapes as a reasonable accommodation under the Americans with Disabilities Act, those expenses would not qualify as BWEs.
1619(b) Medicaid
Persons with disabilities who lose SSI because of increased wages will often continue to qualify for Medicaid. This is very important because many jobs provide either no health insurance coverage or inadequate coverage. Even very good health insurance plans typically do not cover extensive home health care benefits such as the benefits available from Medicaid. Although some plans may cover a wide array of AT devices, this will vary from policy to policy. When AT devices are covered, most policies require a copayment of 20 percent or higher. (For a more extensive discussion, see our two-part series on private insurance in our November-December 1997 and January-February 1998 issues of IMPACT.)
Consider Mark, who is deaf and receives SSI benefits of $587 per month. Mark obtains a job which pays $24,000 per year or $2,000 per month. With that level of income, Mark will lose his right to an SSI check. He can probably continue to get Medicaid benefits under the 1619(b) program.
A person who loses SSI benefits because of wages will qualify for 1619(b) Medicaid if:
In New York, the 1998 annual wage limit or threshold for 1619(b) was $28,736. The 1999 threshold has not yet been announced. So long as annual wages are below the threshold and the other criteria are met, Medicaid will continue and can continue indefinitely. If a person has very high expenses, such as those covered by Medicaid or those that would qualify as IRWEs, a much higher "individualized threshold" can be established. For example, we are aware of persons with very high expenses related to home health care (covered by Medicaid) who have 1619(b) eligibility thresholds of $40,000 or higher.
The right to continued Medicaid under 1619(b) can be very important to persons with high medical costs, such as those related to psychiatric treatment, prescription drugs, home health care or AT. For example, a person could use 1619(b) Medicaid to obtain expensive replacement power wheelchairs or augmentative communication devices despite income of $25,000 or more per year.
SSI’s Plan for Achieving Self Support
SSI’s Plan for Achieving Self Support (PASS) can also be a very important source of funding for AT. The PASS allows an SSI applicant or recipient to exclude or not count income and/or resources that are specifically earmarked to pay for items related to an employment goal.
Consider Jerry, a college freshman who has cerebral palsy and uses a wheelchair. Jerry receives $620 per month in SSDI benefits. Jerry sets aside $600 per month in an approved PASS and is able to save $18,000 in 30 months to purchase a van. This will allow Jerry to pursue a work goal as a history teacher. Since the full $620 of his monthly SSDI check is now excluded ($20 under normal rules and $600 under the PASS), Jerry now qualifies for a full $587 SSI check as a person who lives alone. After Jerry purchases the van as a college junior or senior, New York’s Office of Vocational and Educational Services to Individuals with Disabilities (VESID) should be able to pay the $10,000 or more needed to modify it for his use as a wheelchair user. (For a full discussion of the PASS, see our May-June 1997 issue of IMPACT.)
CONCLUSION
The SSDI, SSI, Medicare and Medicaid rules which apply to persons with disabilities who work can be powerful incentives to work. They can also be a major funding source for AT, either directly or indirectly. In future issues of IMPACT we will report on any changes that result from the proposals that are pending in Congress or proposed by SSA.
WORK INCENTIVES IMPROVEMENT ACT OF 1999
INTRODUCED IN SENATE
On January 28, 1999, Senators Jeffords, Kennedy, Moynihan and 36 co-sponsors introduced S.331, the Work Incentives Improvement Act of 1999. This proposal seeks to: expand opportunities to retain Medicaid or Medicare benefits when working; expand the availability of vocational rehabilitation (VR) services by creating a "ticket" which would allow individuals to purchase VR services outside the traditional state systems; and expand access to information about work incentives by creating a grant program to fund benefits counseling and assistance centers. In its current form, the Medicaid provisions would simply provide states with authority to make Medicaid more readily availabel to persons with disabilities, it would not mandate it. The bill if passed, would also renew SSA’s authority to approve demonstration projects that would test the viability of eliminating the $500 substantial gainful activity rule for SSDI and replacing it with a benefits reduction formula that is similar to SSI’s (i.e., exempting an amount of monthly earnings and then reducing a check by $1 for every $2 earned). The full text of this bill can be obtained on the "Thomas" web site: http:///thomas.loc.gov/home/thomas.html.
NEW YORK STATE: SSI BENEFIT LEVELS
Effective January 1, 1999
Status Individual Couple
Living Alone
$587
$855
Living with Others
$523
$797
Living in the Household of Another
$356.34
$546.67
Adult Care Facilities & Community Residences
-NY City, Nassau, Suffolk Westchester Counties
$935
$1,870
-Rest of NY State
$905
$1,810
REFERENCE MATERIALS ON SSDI/SSI WORK INCENTIVES
Benefits Management for Working People with Disabilities: An Advocate’s Manual (Greater Upstate Law Project, July 1998) - 10 chapters, 156 pages; order forms available through the AT Advocacy Project.
Check out the growing number of resources on the Neighborhood Legal Services web site, www..nls.org, under our Social Security/SSI page. Two actual chapters for the Benefits Management manual are on this web site.
NYS DEPARTMENT OF LABOR HEADS UP DEMONSTRATION PROJECT
TO ASSIST SSDI AND SSI RECIPIENTS WHO WANT TO WORK
New York is one of 12 states that have received demonstration grants through the Social Security Administration to promote the employment of SSDI and SSI recipients. The New York State Department of Labor (DOL) heads up a multi-agency steering committee that is currently in the middle of a planning year. The project will begin serving individuals in late 1999 or early 2000 in demonstration sites in Erie County and New York City. The purpose of the demonstration grants is to allow states to test new approaches that will result in more persons with disabilities going to work and leaving the disability roles. Those seeking more information about the "New York Works" project can call Carolyn Peterson-Vaccaro at DOL (518-485-6176) or Valerie Melburg at the State Office of Mental Health (518-474-9916).
SOCIAL SECURITY ADMINISTRATION’S PROPOSEDIn the February 16, 1999 issue of the Federal Register, pp. 7559-7561, SSA issued a proposed regulation that would increase from $500 to $700 the average monthly earnings considered to be substantial gainful activity (SGA). The SGA amount was last increased from $300 to $500 effective January 1,1990. The Social Security Administration is accepting comments on this proposal through March 18, 1999. The full text of the proposed regulation appears on our web site, www.nls.org, under "What’s New."
Welcome to Neighborhood Legal Services’ data bank!
Do you have decisions of interest relating to
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(716) 847-0650
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In our Upcoming Issues
—— Special Education:
1999 Federal Regulations
—— The American with Disabilities Act
(ADA) and AT
—— SSI and Family Law: Structuring Child
Support & Alimony Settlements to
Create Funding for AT