Social Security Work Incentives

The Trial Work Period (TWP) is nine months, in which a beneficiary can earn any amount of money and still receive a full benefit check. The nine months do not have to consecutive. People have five years to accumulate the nine Trial Work Months. In 2002, any month in which you earn over $560 is considered a Trial Work Month. People who are self employed use a Trial Work Month any time they earn over $560 or work more than 80 hours in a month. Each beneficiary is allowed one TWP per eligibility. It is extremely important that people who receive benefits, and want to work, keep close track of the Trial Work Months used. It is also important to know and remember, even though earnings will not affect SSDI benefits during the TWP, for those of you who are receiving SSI or Adult Public Assistance, earnings above $85/ month will affect those benefits.

Extended Period of Eligibility

The Extended Period of Eligibility (EPE) begins the month following the end of the TWP whether or not you are working. The EPE is 36 consecutive months. During the EPE, you will receive a full benefit check for any month in which your income is less than Substantial Gainful Activity (SGA) level. SGA level is $780/month for non-blind individuals, and $1300/month for blind or visually impaired individuals in 2002. The first month, during the EPE, in which you earn over SGA is considered the beginning of a Grace Period. For that month and the next two you will receive a full benefit check, no matter how much you earn. After the Grace Period, you will not be eligible to receive a check if your earnings are above SGA. If your earnings are below SGA in the 36^th month of the EPE, you will receive a benefit check after the end of the EPE. You will be eligible to receive a benefit check until the first month your earnings are above SGA.

Expedited Reinstatement of Benefits

If your benefits are terminated, because of work activity and earned income, you can ask to have your benefits reinstated. Three conditions apply here:

1. Benefits were terminated because of earned income.

2. You are unable to work or perform SGA because of an impairment that is the same as or related to the impairment that allowed payment of benefits.

3. You make the request within 5 years of the month in which benefits ended.

Social Security will pay up to 6 months of provisional benefits while they determine if you meet eligibility requirements. These benefits do not have to be repaid if Social Security determines that you are not disabled according to their rules. If you meet the eligibility requirements, your benefits will be reinstated. Payment will be made for any month in which your income is below SGA. If you receive 24 benefit payments, you will become eligible for a new TWP and EPE (the 24 benefit payments do not have to be in consecutive months).

Impairment Related Work Expense

Social Security allows you to deduct costs you incur, because of your disability, that allow you to work. The cost must be reasonable, paid by you (not reimbursed by Medicaid, Medicare, or private insurance), deducted in the month in which you incurred the cost, documented, and approved by Social Security. Some of the things that Social Security allows you to deduct as Impairment Related Work Expense (IRWE): Medications, personal care attendant services, special transportation costs, non-traditional medical services, some home modification, and job-coaching. The use of IRWE may reduce countable income below SGA and allow you to receive a benefit check. If, for instance, you are working part time and earning $800/month, during the EPE you will not be eligible for a benefit check. If you have $200 in IRWE, and deduct that from your income, you will have a countable income of $600/month and be eligible for benefit check.

Subsidies and Special Supports

Social Security wants to count only the actual value of your work when they determine if you are working at SGA and eligible for a benefit check. If, because of your disability, you are expected to do less than other workers, receive help, or work less than others in the same job and receive the same pay, your work is subsidized. Social Security will only count the actual value of your work when determining if you are eligible for a benefit check. If your employer cannot or will not put a percentage value on the amount of work you do, Social Security will make the determination. For instance, you are expected to produce 75% of what other workers in the same job produce, but are paid the same as the other workers; you can deduct 25% of your income before reporting it to Social Security. This may put countable income below SGA and allow you to receive a benefit check.

Someone other than your employer provides Special Supports. If, for instance, DVR pays for a job-coach or reimburses part of your salary, the cost of the job-coach or the amount of the reimbursement is a special support. The actual cost of the job-coach or the amount of the reimbursement can be deducted from income before reporting to Social Security. The deduction may put your countable income below SGA and allow you to receive a benefit check.

Unincurred Business Expense (Self Employed Only)

Social Security allows you to deduct the value of goods or services that others contribute, without cost to you, to your self-employment, before determining if you are performing work at SGA. Generally, the cost of the item deducted must be something, which, if you paid for, would be a legitimate IRS business deduction. If someone donates retail space, the fair market value of that retail space, can be deducted from gross income before reporting to Social Security. The deduction may bring countable income below SGA and allow you to receive a benefit check. Remember, though, that working more than 80 hours a month is considered SGA regardless of how much you earn.

Unsuccessful Work Attempt

Social Security will disregard Unsuccessful Work Attempts when determining whether your work is at SGA. If a work attempt is less than three months and stops due to your disability, Social Security can disregard the attempt and allow you to continue to receive benefit checks after the EPE. If you have to stop working because special supports or subsidies are removed, and you have been working six months or less, Social Security will consider that an Unsuccessful Work Attempt and will not cease paying you benefits.

Continued Payment Under a DVR Program (Section 301)

Social Security will continue to pay you benefits if you medically recover and are in a DVR program. You will continue to receive benefits until the completion of your DVR plan. Social Security must approve the DVR plan in advance. If you know that you are scheduled for a Continuing Disability Review, and think that Social Security may determine that your disability has ended because of medical recovery, you should contact Social Security to notify them that you are in a DVR employment plan.

Medicare

Medicare coverage begins 24 months after you begin to receive Social Security cash benefits. Coverage continues for 93 months after the end of the Trial Work Period. If, at that time you are still eligible for Social Security checks, Medicare coverage will continue until cash eligibility ends. At that time, if you still have a disabling condition, you may purchase Medicare coverage. There is a premium for Medicare coverage; in the state of Alaska, Adult Public Assistance pays the premium for eligible individuals.

Earned Income Exclusion

Social Security counts less than half of your income when calculating your SSI payment. You are allowed to deduct the first $65 of income plus $20 in general deductions. Social Security then divides the remainder in half. That is what they count as income.

SSI Payments for People Who Work � Section 1619(a)

You can receive SSI cash benefits even when your earned income is at or above the SGA level. This eliminates the need for a TWP or EPE under SSI. To qualify for this work incentive, you must:

� Have been eligible for an SSI payment for at least one month before you begin working at the SGA level:

� Still have a disabling impairment: and

� Meet all other eligibility rules, including the income and resources tests.

SSI will calculate your benefit amount in this way: They will deduct the earned income exclusion of $65/month and the $20 general exclusion from gross income. They will then divide the amount by 2. Then they will subtract that number from the Federal Benefit Rate (FBR) ($545 in 2002) to arrive at your SSI benefit for the month. Example:

Income	$800.00
Earned Income Exclusion	-65.00
General Exclusion	-20.00
	$715.00
Result Divided by 2 = Countable Income	715/2
Countable Income	$357.50
Subtracted From FBR	$545.00
	-357.50
	187.50
Round to next lower $ amount for SSI check	$187.00
Total Income before taxes is $987. In Alaska you can receive a SSI benefit until earnings are $1175.00 in 2002

Continued Medicaid Eligibility � 1619 (b)

Your Medicaid coverage can continue even if your earnings become too high for a SSI cash benefit. To qualify you must:

� Have been eligible for a SSI cash benefit for at least one month;

� Still have a disabling impairment;

� Still meet all other eligibility rules, including the asset and resource test;

� Need Medicaid in order to work; and

� Have gross earned income that is insufficient to replace Medicaid with private insurance.

In Alaska, you can receive Medicaid coverage under section 1619(b) until your gross income is $35,860/year or $2988/month in 2002.

1619(b) also preserves SSI eligibility. If you stop working within one year of receiving an SSI benefit, you do not have to reapply to have your benefits reinstated. Using Medicaid under 1619(b) satisfies this requirement.

Impairment Related Work Expense SSI

	With IRWE	W/O IRWE
Income	$800.00	$800.00
Earned Income Exclusion	-65.00	-65.00
General Exclusion	-20.00	-20.00
	715.00	715.00
IRWE	-200.00
Divide by 2=Countable Income	515.00/2	715.00/2
Countable Income	$257.50	$357.50
FBR	$545.00	$545.00
Minus Countable Income	257.50	357.50
SSI Benefit Check	$287.00	$187.00
Social Security rounds down to the nearest whole dollar amount when calculating SSI benefits.

Some of the things that Social Security allows you to deduct as IRWE: Medications, personal care attendant services, special transportation costs, non-traditional medical services, some home modification, and job-coaching.

Blind Work Expense

If your impairment is visual or blindness, Social Security allows you to deduct costs associated with working. These costs do not have to be related to your disability. The cost must be reasonable, paid by you (not reimbursed by Medicaid, Medicare, or private insurance), deducted in the month in which you incurred the cost, documented, and approved by Social Security. Some of the things that can be deducted as Blind Work Expense (BWE): Transportation, meals eaten at work, cloths worn at work, union dues or professional association fees, Federal, state, and local income taxes, Social Security taxes, tools, companion animal expenses. This list is not exhaustive. Using BWE, while receiving SSI benefits, will result in a larger SSI benefit. Example:

	With BWE	W/O BWE
Income	$800.00	$800.00
Earned Income Exclusion	-65.00	-65.00
General Exclusion	-20	-20.00
	$715.00	$715.00
Divide by 2	$715.00/2	$715.00/2
	$357.50	$357.00
Minus BWE=Countable Income	200.00
	$157.00	$357.50
FBR	545.00	$545.00
Minus Countable Income	-157.50	-357.50
SSI Benefit Check (SSI rounds down to the next lowest $ amount	$388.00	$188.00

If blindness or visual impairment is your disability Social Security does not look at the amount of money you earn when you apply. The asset and resource limit, however, do apply.

Student Earned Income Exclusion

If you are under age 22, not married nor head of your household, and regularly attending school, Social Security does not count up to $1,320/month of earned income when calculating SSI payments. The allowable yearly exclusion for 2002 is $5,340. To be considered �regularly� attending school you must:

� Attend college or university classes for at least 8 hours a week; or

� Be in grades 7-12 for at least 12 hours a week; or

� In a training course to prepare for employment for at least 12 hours a week (15 hours a week if the course involves shop practice); or

� For less time than indicated above for reasons beyond the student�s control, for example illness.

The Student Earned Income Exclusion is applied to income before the Earned Income Exclusion and the General Exclusion.

Plan for Achieving Self Support (PASS)

A Plan for Achieving Self Support (PASS) allows you to set aside income (earned or unearned) and resources for a specified time for a work goal. Social Security does not count the income that you set aside under your PASS when they calculate your SSI cash benefit. They do not count money you set aside under your PASS when determining initial and continuing eligibility for SSI cash benefits. A PASS can help you establish and maintain eligibility for SSI and can increase your SSI cash benefit. You must have income or resources other than SSI to contribute to a PASS. Earned income, SSDI payments, Veteran�s Benefits, Permanent Fund Dividends, or Native Corporation Dividends can all be included in a PASS. At a minimum a PASS must:

� Be designed specifically for you;

� Be in writing, preferably on Social Security form SSA-545-BK;

� Have a specific work goal which you are capable of performing;

� Have a specific timeframe for reaching your vocational goal;

� Show what money will be included in your PASS;

� Show how the money will be used to reach your vocational goal;

� Show how money you set aside will be kept identifiable from other funds;

� Be approved by Social Security; and

� Be reviewed periodically to assure you are complying with the Plan.

A PASS involves a long-term commitment. There are stringent monitoring and compliance requirements involved with a PASS. If you are interested in a PASS, it is strongly recommended that you consult a benefits specialist or a professional PASS writer to help you. The cost of writing the PASS can be included as one of the services paid for by the Plan.

Property Essential for Self Support

Social Security does not count some resources that are essential to your means of self-support when deciding your initial and continuing eligibility for SSI cash benefits. They do not count property used in a trade or business (for example inventory) or you use for work as an employee (for example tools or equipment). Social Security can also disregard some liquid assets if those assets are demonstrably part of a business. Social Security can disregard up to $6000 of equity value of property that is used exclusively for production of vegetables or livestock to feed your household.

Reinstating Eligibility Without a New Application

If you have been ineligible for a SSI benefit for 12 months or less for any reason other than medical recovery, you may be able to restart you SSI cash benefit and continued Medicaid coverage without a new application. When your situation changes, contact Social Security and ask to have your benefits reinstated. Here are some examples of how this can help you.

Example 1 � If:

� You are eligible for continued Medicaid coverage under section 1619(b); and,

� Your countable income drops enough to allow a payment.

Then: Social Security can start your SSI cash benefit payments again.

Example 2 � If:

� You become ineligible for SSI benefits because your earnings exceed the threshold amount; and,

� Your countable income drops enough to allow payment within 12 months.

Then: Social Security can start your SSI cash benefit payments again and notify the State to start your Medicaid coverage again.

Example 3 � If:

� You become ineligible for continued Medicaid coverage under section 1619(b) because your earnings exceed the threshold amount, and

� Your earnings drop below the threshold amount.

Then: Social Security can notify the State to restart your Medicaid coverage.

Expedited Reinstatement of Benefits SSI

If your benefits are terminated, because of work activity and earned income, you can ask to have your benefits reinstated. Three conditions apply here

Benefits were terminated because of earned income
You are unable to work or perform SGA because of an impairment that is the same as or related to the impairment that allowed payment of benefits
You make the request within 5 years of the month in which benefits ended.

Social Security will pay up to 6 months of provisional benefits while they determine if you meet eligibility requirements. These benefits do not have to be repaid if Social Security determines that you are not disabled according to their rules. If you meet the eligibility requirements, your benefits will be reinstated. You will have to meet all eligibility requirements including asset and resource limitations. Substantial Gainful Activity (SGA) is applied at initial application and upon requesting Expedited Reinstatement unless you are blind or have a visual impairment.

Continued Payment Under a DVR Program (Section 301) SSI