Category Archives: Social Security Disability

The Impact of Current Resource & Income Limits on SSI Recipients

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Supplemental Security Income, often referred to as SSI, is a federal welfare program that focuses on assisting the elderly and disabled who do not qualify for benefits under the various programs that are comprise Social Security. SSI recipients can receive a monthly income equal to the Federal Benefit Rate. This currently is less than 75 percent of the federal poverty guidelines. While that is not much, it at least is subject to cost-of-living adjustments. Meanwhile, much of this program seems completely frozen in time.

Because the SSI program is basically a welfare program, it has strict limits on earnings and resources that permit eligibility for these benefits. During 2013, Representative Raúl Grijalva of Arizona introduced legislation to raise resources that are counted when determining financial eligibility for SSI as well as the monthly exclusions of both unearned and earned incomes (“income disregards”) by approximately 550 percent. While this proposal may sound excessive, it is not so extravagant when viewed in the context of history of the program.

The starting point for Supplemental Security Income dates back to the presidency of Richard Nixon, who signed legislation creating the program in 1972. Since that time, the National Senior Citizens Law Center estimates that the cost of living has grown by more than 5-and-a-half times the amount from 1972. Meanwhile, the rate of growth of countable resources, as well as both types of income disregards, has been anemic, at best.

Countable resources did experience a growth spurt in the latter half of the 1980s. When the program began, these resources, which generally consider bank accounts, cash, and similar types of property, could not exceed $1500 for an individual and $2250 for a couple who both received SSI. This was true from 1974 through 1984 before these amounts were permitted to grow. In fact, for a five-year span from 1985 into 1989, the level of countable resources increased, reaching $2000 for individuals and $3000 for a couple receiving SSI. This amounted to the resource level – so long stagnant – increasing by one third in half of a decade.

However, an even more noteworthy situation has occurred during the 25 years that followed. Countable resources have remained at the 1989 level. Due to this, SSI recipients often are unable to afford to have cars and other common household equipment repaired because repair costs have advanced with the times — liquid assets such as savings accounts need to be tapped to pay for these. Meanwhile, a person on SSI continues to be allowed have relatively small amounts of such resources for emergency expenditures. People on SSI have little room to maneuver when unexpected problems arise because their incomes generally are far below the poverty level while lack virtually any resources to have the flexibility needed to handle emergencies.

The income disregards tell much the same story. In fact, these situations have been even worse over time. In a month, a person who receives SSI can receive unearned income, such as dividends, interest, or capital gains, totaling $20 before this type of income would result in a dollar-for-dollar deduction from SSI. While there was the brief five-year period when countable resource amounts did increase, the unearned income disregard of $20 today is the same amount as the unearned income disregard established at the program’s inception in 1974. Assuming that the cost of living has jumped 550 percent during this time frame, this means, relatively speaking,  that the unearned income disregard has plummeted to a level that is roughly equivalent to $3.64 in 1974, based on the cost of living from that year to the present time.

As for the earned income disregard, it may be $65 per month instead of $20 per month, but it did not have to climb to that level. Again, today’s amount equals the value from 1974, four decades ago. It should be noted that the earned income disregard can be as much as $85 if there is no unearned income and that earned income above the disregarded amount reduces SSI benefits by 50 cents for every dollar earned. However, this does not change the basic fact that recipients of SSI have fallen even farther behind the rest of the population in keeping pace with the cost of living.

What can be gained by raising the threshold levels mentioned here? It would not be a forced transfer of wealth but, instead, would allow SSI recipients to actually be able to use their resources and any additional income to help themselves. At the very least, providing fair increases in the current levels for countable resources and income disregards can offer new, if only modest, possibilities to those who are forced by law to remain deeply impoverished to do more for themselves while not taking anything away from others, an idea that would seem worthy of consideration.

Social Security Disability: The Trial Work Period and Beyond

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The trial work period (TWP) often is misunderstood by people who receive Social Security Disability (SSD) benefits and want to supplement this income by working. You need to be aware of the impact of the TWP before you accept even a part-time job because you could end up losing your SSD benefits and, at some point, find yourself unable to remain in the workforce, leaving you without a steady income.

The trial work period can be difficult to understand because, as often is the case with the Social Security Administration, it often is a lengthy process that has various exceptions. Knowing what the trial work period really means and what rights you have after the end of your TWP can help you to protect yourself from significant difficulties later on.

The first thing to remember is that a trial work period applies only if you receive Social Security Disability. Anyone who only receives Supplemental Security Income, for example, does not have to worry about the meaning of a trial work period. However, you receive SSD (which, in general, is based on your work record), you need to be aware of the impact of completing a TWP.

As suggested above, you really must understand what a “trial work period” actually is before you make plans to attempt to get a job to increase your income.. The Social Security Administration allows people who are disabled to try to return to the work. The TWP looks at work during any period of 60 consecutive months after a person becomes eligible for SSD benefits. If, within any 60-month period after this, there are nine months in which your earnings are at or above a specific amount set by the Social Security Administration prior to each year, then you have completed the trial work period.

SSD recipients sometimes assume that this income level equals the amount for Substantial Gainful Activity (SGA), which are the standard usually used in disability determinations. Actually, income earned during any of the nine months needed to complete a trial work period is around 72 percent of the SGA level. For example, if you worked in 2012 (when SGA was $1010 per month) and earned at least $720 in four months and then earned at least $750 in another four months this year (when SGA equaled earnings of $1050), then you will complete your trial work period after the first month in 2014 that you earn $770 since your earnings in nine months from 2012 into 2014 would be at or above the levels set by the Social Security Administration. It also is important to remember that, counting the initial month of the TWP (which is when your earned income first was greater than the permissible monthly amount), you have to be concerned for 60 consecutive months that your gross earnings do not exceed the monthly level during eight additional months within this period

However, even though the trial work period will end when you have “excessive” income in nine of 60 (or fewer) months, all is not lost in terms of benefits. After the TWP ends, you are entitled to an “Extended Period of Eligibility” (EPE), which lasts for 36 months immediately following the final month of your trial work period. You are eligible for your SSD benefits in any month of this three-year period that your earnings drop below the Substantial Gain Activity level (which is higher than TWP earnings, as explained above). SGA earnings will rise to $1070 in 2014. This payment of SSD benefits will occur during the EPE as long as you have not had a medical improvement that ends your disabling condition – this improvement would end any right to disability benefits. During your Extended Period of Eligibility, you will not receive SSD in any month when your gross earnings are above the Substantial Gainful Activity level. However, because your earned income (and not your health) is the reason that you are not disabled, your case is viewed accordingly. Since your disabling impairment continues, whenever your gross earnings fall below the SGA level, you will receive your monthly SSD payment without having to reapply for disability.

Once the 3-year EPE ends, your right to SSD also can end quickly. In the 37th month after the trial work period ended, you still can receive your SSD benefits as long as you remain medically disabled. Your SSD benefits can continue on a monthly basis until there is a month when your earnings reach the SGA level. When this occurs, you would receive your full SSD benefits for three more months, at which time these payments generally end. There is an exception to this rule, however.

For the first five years after your Extended Period of Eligibility ends, if you cannot continue working at the SGA level due to the disabling impairment that originally made you eligible for SSD, you can request to have your benefits reinstated without being forced to reapply, which would mean starting from the beginning as you did when you first are awarded disability benefits. Instead of a new application, you would request Expedited Re-Instatement, which is a potential way to regain disability benefits that stopped only because of your work and earnings.

The major point to gain from understanding the trial work period and the steps after its completion is that you do not have to avoid working (or attempt to hide this fact from the government) if you receive Social Security Disability. Instead, this shows how you can test your ability to work again, allowing you to find out what your capabilities are despite having a disabling impairment. It also highlights the importance of knowing what the consequences of making this decision if you do not take the time to learn what is permitted under the regulations of the Social Security Administration.

Disability Claims and Unemployment Compensation

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At first glance, a disability claim filed with the Social Security Administration and a claim for Unemployment Compensation benefits would seem to be contradictory. After all, when a person files for disability, the individual basically is stating that she is unable to work for health reasons. To file for Unemployment Compensation, that same person is saying that she is “able and available” to work. However, the current position of the Social Security Administration (SSA) is that these two claims can coexist, allowing one person to file for both benefits at the same time.

This policy is found in a memorandum, dated November 15, 2006, which was written by Frank Cristaudo when he was the Chief Administrative Law Judge for the Office of Disability Adjudication and Review (ODAR). He issued the policy to clarify an issue with which some of ODAR’s Administrative Law Judges continue to struggle, even after this directive. There may seem to be something inconsistent when a person collects Unemployment Compensation, reporting to Pennsylvania’s Department of Labor and Industry that they can work, while the same person tells a federal agency that he or she is entitled to benefits because a disability prevents work. However, the issue is not as simple – or inconsistent – as this would seem.

Disability, according to the definition of the Social Security Administration, does not mean that someone is not capable of doing any work. Basically, what disability means when an individual in terms of a claim for benefits filed with the SSA is that the person cannot perform work activities on a full-time basis, which is termed “substantial gainful activity.” This does not mean that this person is unable to do any work at all.

As for Unemployment Compensation in Pennsylvania and many other states, when a person is able and available for work, this includes part-time work and not necessarily a full-time job. In this situation, there are two definitions of work being used, and neither definition actually rules out the other one.

The memorandum does advise Administrative Law Judges that Unemployment Compensation and the work being sought to qualify of this benefit should be considered in determining whether a person is disabled, but it is only one of many factors. In part, the Chief Administrative Law Judge acknowledged the reality that disability determinations by the Social Security Administration generally involve a lengthy process that can force an individual to make the decision to apply for both benefits just to survive the financial hardships that can occur while awaiting a final decision regarding a disability claim.

In fact, one of the SSA’s own regulations directs individuals who apply for Supplemental Security Income (SSI) to apply for all benefits, which includes Unemployment Compensation, for which they could be eligible. To force a person to apply for this and then automatically deny the disability claim because the individual did what was required would lack logic, at the very least.

A final note for the moment involves how receiving Unemployment Compensation affects someone who is receiving SSI, which is a needs-based program (akin to federal welfare), versus someone who gets Social Security Disability (SSD), which is based on a person’s work record. The person who receives SSI and has received Unemployment Compensation will lose some of the SSI payments that would have been received because there is a deduction from the federal payment when there is additional income, such as Unemployment Compensation, available to the individual because this means that there is less need for the SSI, which is based on need.

However, SSD benefits are not tested against a person’s additional income or resources when determining monthly payments. Therefore, the level of Social Security Disability paid to the disabled individual will not be adjusted due to the receipt of Unemployment Compensation. Also, certain other types of income – for example, Worker’s Compensation – cause an offset that is deducted from SSD benefits because Pennsylvania that would require repayment of Worker’s Compensation benefits in this instance if the recipient later is found to have been disabled by the Social Security Administration during the period that the other income was received. Since eligibility for Unemployment Compensation is not based on injury or illness, it does not trigger an offset involving disability benefits.

As always, if there are questions or any need for clarification regarding what can seem to be a complicated system of rules and regulations, you can contact me about these issues.