Social Security’s Work Incentives Help Individuals with Disabilities Become Self-Sufficient through Work - Articles

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Posted by: Christy Gibson on Feb 6, 2013

By Janet Mynatt[1]

The Social Security Administration (SSA) has a stated priority to assist disabled beneficiaries who want to work to work to find the right job and succeed in the workplace.  SSA employment support provisions, known as “work incentives,” make it possible for disability beneficiaries to participate in the workforce and still receive cash payments and Medicare or Medicaid health insurance until they can become self-sufficient.  This article briefly outlines the work incentives rules to provide an overview for advocates and attorneys who serve people with disabilities.[2]

The Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) disability programs for working-age individuals provide cash assistance to those who have demonstrated an inability to work at substantial levels due to a long-term, medically determinable impairment.  To meet SSA’s threshold definition of disability under either program, a person who is from age 18 to full retirement age must be unable to engage in substantial gainful activity (SGA).  A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA.    20 C.F.R. §§ 404.1571 through 404.1575, 416.971 through 416.975.  For both the SSI and DI programs, the SGA amount for individuals with disabilities, other than blindness, is $1,040 per month for 2013. The SGA monthly amount for individuals who are blind is $1,740 for 2013.

The SSI program is funded from general tax revenues for persons with limited income and resources.  There are several work incentives specific to the SSI program.  

SSI-Specific Work Incentives:

1.            Earned Income Exclusion (EIE):  SSA does not count the first $65 in earned income per month, after which SSI payments are reduced by $1 for each $2 earned.  SSA counts less than one-half of earnings when they figure the SSI payment amount.  20 C.F.R. §§ 416.1112(c)(5) and 416.1112(c)(7).

2.            Property Essential to Self-Support (PESS):  SSA does not count some resources that a beneficiary needs to be self-supporting when they decide eligibility for SSI.  For example, they exclude up to $6,000 of the equity value of land used to produce food for household consumption or of income-producing rental property.  20 C.F.R. §§ 416.1222 and 416.1224.    

3.            Section 1619(a):  Section 1619(a) of the Social Security Act allows people who continue to be disabled to receive SSI checks and Medicaid benefits when their earnings are over the SGA level but less than the SSA “break-even point” where the SSI benefit check is reduced to $0. The person continues in 1619(a) status as long as they meet all other eligibility requirements for SSI and Medicaid.  20 C.F.R. §§ 416.260 through 416.263.

4.            Section 1619(b):  Once a person’s income reaches the “break-even point” reducing their SSI check to $0, Section 1619(b) allows them to continue to receive Medicaid coverage provided they are still disabled, need Medicaid in order to work, do not have sufficient earnings to replace SSI, Medicaid benefits and other medical costs, and meet all other eligibility criteria for SSI and Medicaid, if their earned income were not counted.  The person is still considered “eligible” for SSI and Medicaid.  20 C.F.R. §§ 416.264 through 416.269.

5.            Student Earned Income Exclusion (SEIE):  Students under age 22, who are not married or head of household, who regularly attend school or a training program can work and receive their full SSI amount and Medicaid as long as their earnings are below $6,960 a year for 2013. Up to $1,730 in earnings can be excluded monthly up to the annual maximum.  20 C.F.R. § 416.1112(c)(3). 

The Social Security Disability Insurance (SSDI) program provides benefits to disabled or blind individuals who are “insured” by workers’ FICA contributions on their own earnings or by contributions of spouses or parents.

SSDI-Specific Work Incentives: 

1.              Trial Work Period (TWP):  SSDI beneficiaries have a trial work period of 9 months (not necessarily consecutive) to test their ability to succeed at work, earn any amount and still receive full benefits.  Monthly earnings above the trial work level amount count as a TWP month.  For 2013, the TWP monthly amount is $750. 

20 C.F.R. § 404.1592.  

2.              Extended Period of Eligibility (EPE):  After 9 months of a trial work period, beneficiaries enter into a re-entitlement period, known as an extended period of eligibility or EPE for up to 36 months.  After a 3-month EPE grace period, cash benefits are suspended for any month in which earnings exceed the SGA level but are paid for any months earnings are below SGA.  Once the EPE has been completed, benefits are terminated in the first month of SGA.  20 C.F.R. § 404.1592a.  

3.              Extended Medicare Coverage:  An SSDI beneficiary enrolled in Medicare and working at the SGA level, who has not medically improved will continue to receive at least 7 years and 9 months (93 consecutive months) of Hospital Insurance (Part A); Supplemental Medical Insurance (Part B), if enrolled; and Prescription Drug coverage (Part D), if enrolled. This extended coverage starts the month after the last month of the TWP. 42 C.F.R. § 406.12. 

SSI and SSDI Work Incentives:

1.              Subsidies and Special Conditions:  SSA will count only the real value of the work performed when deciding whether work is at the SGA level.  SSA will deduct the value of subsidies and special conditions, meaning support received on the job that may result in more pay than the actual value of services performed.  SSA does not deduct the value of subsidies or special conditions when they calculate the SSI payment amount.  20 C.F.R. §§ 404.1573(c), 404.1574(a), 416.973(c) and 416.974(a).

2.              Unsuccessful Work Attempt (UWA):  SSA does not count earnings from an attempt to work that stopped or where earnings were reduced below the SGA level after 6 months or less due to the beneficiary’s disability or due to elimination of special services or assistance necessary to allow a beneficiary to work.  SSA does count earnings received during an UWA when calculating the SSI payment amount.  20 C.F.R. §§ 404.1574(c) and 416.974(c)

3.              Impairment-Related Work Expenses (IRWE):  The costs of work-related items or services that a beneficiary pays for out of their own money because of their medical condition are deducted from monthly earnings when SSA decides whether work is at the SGA level and are also excluded from earned income when SSA figures the SSI payment amount. 20 C.F.R. §§ 404.1576 and 416.976.

4.               Plan to Achieve Self Support (PASS):  A PASS allows a beneficiary to set aside other income besides their SSI for a specified period of time to pursue a work goal. When SSA figures the SSI payment amount, they do not count the income set aside under an approved PASS plan.  For example, a beneficiary can set aside money to go back to school, or to get specialized training for a job or to start a business.  Having a PASS can help a disabled SSDI beneficiary qualify for SSI payments or may increase the amount of an SSI beneficiary’s cash payments.  20 C.F.R. §§ 416.1180 through 416.1182 and 416.1225 through 416.1227.

5.              Ticket to Work (TTW):  The TTW program was designed to allow disability beneficiaries more access to employment services and to encourage long-term earnings at a level that would suspend or terminate disability benefits.  It is a voluntary program.  SSA will not conduct a review to see if a person’s condition has medically improved while they are using a TTW.  20 C.F.R. §§ 404.1590(h) and 416.990(h).

6.              Continued Payment under Vocational Rehabilitation or a Similar Program (Section 301):  Monthly benefit payments can continue even after a person no longer meets SSA’s definition of disability as long as they are actively participating in an approved program that is expected to increase the likelihood that they will become self-supporting.   Some examples of appropriate programs include a Ticket to Work; a PASS; or an IEP for an individual aged 18 to 21.  20 C.F.R. §§ 404.316(c), 404.327, 404.328, 416.1320(d), 416.1331(a) , 416.1331(b) and 416.1338.

7.              Expedited Reinstatement (EXR):  EXR offers a fast track to benefits reinstatement (quick benefit restart) for beneficiaries whose benefits stop because of work earnings.  If they become unable to work again because of their medical condition, they can request reinstatement within 5 years without filing a new disability application.   They are eligible to receive provisional benefits for up to 6 months unless SSA determines they are no longer disabled.  20 C.F.R. §§ 404.1592b through 404.1592f, 416.999 and 416.999a through 416.999f.

In summary, SSI and SSDI work incentives rules provide important employment supports that allow and even encourage beneficiaries to attempt to earn more money through work.  Most notably, beneficiaries are protected from automatically facing the elimination of cash or medical benefits until they can be successful at work.  SSA’s employment support provisions help remove barriers to work by offering an opportunity for recipients to postpone SSA’s medical review of continuing eligibility as long as they are participating in an approved program and making progress toward work goals.  Finally, the work incentive rules provide an important safety net in case work efforts are not successful due to a disability, through an expedited process to re-apply for benefits with immediate, provisional cash and insurance benefits. 

[1] Janet Mynatt is a staff attorney with the Legal Aid Society of Middle Tennessee and the Cumberlands.

[2] Social Security’s online worksite includes helpful information and links to rules, regulations, research and policy materials at: