As adults, we work not only to sustain our lifestyle but to enrich our lives and contribute to society. Our work provides a sense of purpose and accomplishment. In fact, much of our identity is linked to what we do to earn a living and how we choose to do it. Individuals with developmental disabilities experience the same benefits from working. Unfortunately, they often forego employment for fear of losing their Supplemental Security Income (“SSI”) benefits. The question often arises: “Can I still receive SSI if I work?”

The simple answer is ‘yes.’ But in the world of disability nothing is as simple as it seems. An individual may work, but he or she must understand how working affects SSI benefits.

Q: What is SSI?

A: SSI is a federal program that provides cash benefits to adults and children with disabilities who have limited income and resources.

Q: What effect does earned income have on SSI benefits?

A: The calculations of a monthly benefit amount are easier to understand in an example.

Let us assume that John works and earns $500 per month, and that John receives $698 per month from SSI. The first $20 John earns will have no effect on his SSI benefits. This is a general income exclusion that is applied to either earned or unearned income. It is important to note that unearned income (such as SSDI) will also affect SSI benefits.

The next $65 John earns will have no effect on his SSI benefits. This is the earned gross income exclusion. The Social Security Administration (“SSA”) deducts the general income exclusion and the earned income exclusion from John’s earnings from employment.

John’s remaining earnings of $415 are divided in half. The resulting amount of $207.50 is deducted from his SSI benefit amount of $698, so John will receive $490.50 in SSI benefit.

Combine John’s SSI benefit with his earnings, his total income a month would be $990.50. Therefore, there is an incentive to work when receiving SSI.

However, there is a point when John’s earned income would cause him to lose his SSI benefits. This would happen if for purposes of the SSA John is engaging in substantial gainful activity (“SGA”). In 2012, an individual engages in SGA if he earns $1010 per month.

Q: How do “Impairment Related Work Expenses” impact SGA?

A: Impairment Related Work Expenses (“IRWE”) refer to services required by an individual with a disability in order to maintain employment. The SSA calculates SGA by deducting the cost of IRWE from the total amount earned. To be deducted, the IRWEs must be paid by the individual with a disability, not by any government program or by a family member. For example, certain transportation costs, medical or non-medical devices, diagnostic procedures, attendant care services, routine drugs and medical services may be deducted. For example:

Let us say Mary is employed and earns $1,200 per month. If the full amount earned is considered, the SSA would determine that Mary is no longer disabled because she engages in SGA. However, in order for Mary to sustain her employment she requires the support of a job coach. The job coach costs $400 per month and Mary directly pays the job coach. The SSA will deduct the cost of the job coach from Mary’s earnings, determining that Mary earns $800. Therefore, Mary will still be deemed eligible for SSI. Of course, her benefit amount will be decreased as explained in the first example, but she will not completely lose her SSI benefits.

Q: What is the Student Earned Income Exclusion?

A: To be eligible for the Student Earned Income Exclusion (“SEIE”) the individual with a disability must be a student under the age of 22 who “regularly attends school” (e.g. takes at least 8 college credits). This exclusion allows the first $1,700 of the student’s earnings per month to be excluded for purposes of SSI, which means it will not be counted toward the calculation of the SSI benefit amount. The maximum yearly exclusion under SEIE is $6,840. SEIE is applied before the general income exclusion or the earned income exclusion described above.

Q: What is Plan to Achieve Self-Support?

A: Plan to Achieve Self-Support (“PASS”) is another government program to help disabled individuals return to work. PASS permits the individual with a disability to set aside earnings or resources to help pay for things or services related to a specific work goal. This money will not be counted towards monthly SSI benefit calculations as well as housing assistance eligibility and food stamps. Examples of qualified expenditures related to a specific work goal include vocational training, purchase of supplies to start a business, school expenses, and transportation.

These exclusions and programs allow individuals with disabilities to work and continue to receive SSI benefits. Therefore, individuals with disabilities should be mindful of the SSI eligibility criteria, but should not forego working because they fear losing their benefits.

Social Security laws are complicated and are subject to change. It is, therefore, always advisable to seek competent legal advice before simply accepting any change or loss of benefits.

Published on Dec 27th, 2012. © Copyright 2012 Hinkle, Fingles & Prior, P.C., Attorneys at Law. All rights reserved.
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