BENEFIT RIGHTS FOR BLIND INDIVIDUALS: A DESCRIPTION OF SOCIAL SECURITY'S WORK INCENTIVE PROVISIONS IN THE DISABILITY INSURANCE AND SUPPLEMENTAL SECURITY INCOME PROGRAMS by James Gashel Introduction This paper examines the work incentive provisions for blind persons who receive (or may receive) Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) checks as well as those who might be made eligible by applying the provisions. The two programs have somewhat different work incentive features for the blind as well as for other beneficiaries. Because of a statutory definition of blindness (found in both titles II and XVI of the Social Security Act), blind people are treated as a separate category in both programs. The Statutory Blindness Definition As a practical and legal matter the statutory definition of blindness is itself a work incentive. The definition removes the discretion which the Social Security Administration (SSA) would otherwise have in determining who is blind and, by virtue of that fact, under a disability. By law, a person is statutorily blind if the visual acuity in the better eye is no greater than 20/200 with the best correcting lens or if there is an accompanying restriction in the field of vision such that the widest diameter subtends an angle of no greater than twenty degrees. There are objective ophthalmological examinations that are used to determine the extent of vision loss, and the measurements provide a fairly reliable standard to follow in proving blindness. Those who are blind by this definition are considered to be disabled under SSDI if they are not engaged in substantial gainful activity. Substantial gainful activity for blind persons is also defined by law. In the SSI program, on the other hand, no definition of substantial gainful activity exists for the blind. In that program people who are blind as prescribed by the definition are eligible if their countable income and resources do not exceed the otherwise applicable limits. For recipients who are not blind, anxiety over the loss of disability status is perhaps the greatest work disincentive. In fact, by responding to the work incentive features of the law, many non-blind disabled individuals worry that they will prove their future ineligibility for cash benefits. For blind people this should be no concern because of the statutory definitions of blindness in titles II and XVI. As long as blindness continues, approval of an application for benefits should be relatively automatic, provided that the other eligibility criteria are met. Therefore, a blind person can feel less constrained in making repeated work attempts by fears that SSA will use successful work efforts as evidence in disapproving future claims. The work incentive features for the blind under the SSDI program differ from those available in SSI. What follows is a description of the details of the work incentives available in each program and the differences that one must understand. Work Incentives for the Blind in Title II, Disability Insurance Many beneficiaries report that SSA personnel do not give them accurate or complete information about the ways in which working will affect their entitlement to benefits. One of the most common misconceptions is that any work at all causes ineligibility. Beneficiaries say that this is what they are told by SSA's claims representatives. In some cases there may be a misunderstanding of the answer, or the question may not have been precisely put. In other cases it may be a matter of miscommunication. The SSA representative may not consider that a person is working if the work does not represent substantial gainful activity. That interpretation would certainly be understandable, but it tends to leave the beneficiary confused. Not all work activity affects entitlement to SSDI benefits. Some work activity does affect entitlement to the extent of causing ineligibility. Some work activity affects entitlement only after several months. Beneficiaries must receive competent counseling in order to understand the ways in which working affects their benefit rights. The following sections will describe the relevant eligibility conditions for blind persons and explain the effects of working. The Substantial Gainful Activity Test The statutory definition of blindness has already been discussed. Those whose vision is limited enough to meet this definition may be eligible for SSDI benefits if they are not performing substantial gainful activity (SGA). SGA is a primary evaluation factor used to measure the extent of an SSDI beneficiary's work activity. The regulations include SGA guidelines for persons who are not blind and a separate set of guidelines for blind people. This paper focuses primarily on the latter provisions. Some attention will also be paid to the differences in the ways in which the guidelines apply to employees and to self-employed persons. SGA Evaluation Guides for Blind Persons The SGA evaluation guides for blind persons are found in SSA's regulations at 20 CFR section 404.1584. The provisions in that section amount to an earnings test for work activity performed in 1978 or later. For all years before 1978 the work activity of blind persons was evaluated under exactly the same standards as are still used for non-blind disabled beneficiaries. The current earnings standards are a clear SGA guideline, following the concept of a monthly exempt amount, although that term is never used. Earnings which are below the monthly standard applicable during any year will not be found to represent SGA. Earnings above the monthly standard do represent SGA. Only countable income is considered, so certain deductions apply. The 1992 SGA guideline for blind persons is average monthly countable income of $850. Annualized, this is precisely the same as the exempt amount for retirees sixty- five to seventy. That was no accident. The amendment which created the statutory SGA guideline for blind persons established a linkage between earnings permitted under the senior citizens' retirement test and SGA for the blind. The reasoning was that blindness and retirement age (age sixty-five) are both defined and readily determinable. Therefore, the same basic exempt earnings principles should apply. One major inconsistency must be pointed out, however, between the age sixty-five retirement test and the blind persons' SGA guideline. For senior citizens who earn above the basic exempt amount, the benefit payable is reduced by one dollar for every three dollars of earnings. As earnings climb, the amount payable as a retirement benefit is reduced and more than replaced by the earnings. For blind persons, however, the SGA guideline is a barrier to higher earnings. Blind persons who have average monthly countable income of $855 per month this year will become permanently or temporarily ineligible to receive benefits and will sacrifice several hundred dollars for earning five dollars a month over the exempt amount. The SGA guideline for blind persons has no earnings offset provision as does the retirement test. Advocates and beneficiaries must be aware of this difference. Comparable Skills and Abilities Test--Age Fifty-Five and Older Under the SGA guidelines, some blind persons who have attained at least age fifty- five are treated somewhat more favorably than those under age fifty-five. They are subject to a comparable skills and abilities test, rather than a strict SGA standard. This means that the benefit eligibility of many blind persons age fifty-five to sixty-five is never actually terminated, although benefits are not due for any month during which SGA is performed. Conversely (and this is the important work incentive point), benefits are due for any month when SGA is not performed. There is no need for a new application or a new disability determination. Benefit eligibility is only suspended during periods of SGA. Subsection (c) of section 404.1584 notes that SSA will compare the work of a blind individual who has attained age fifty-five with the skills and abilities used by the individual in the work most commonly performed by the individual before reaching age fifty-five. If the skills and abilities used in working at age fifty-five or later are less than or different from those used in previous work, payment of cash benefits is only suspended during periods of SGA. If the skills and abilities used by a blind worker at age fifty-five or later are about the same as those used before, performance of SGA would actually terminate eligibility after the trial work and extended eligibility periods had been used. Comparison to Non-Blind SGA Evaluation Guides The SGA guidelines for non-blind beneficiaries are found in sections 404.1574 and 404.1575 of SSA's regulations. These sections present guidelines for employees and for self-employed persons respectively. The tests described here involve evaluations of significant services, substantial income, and a comparability and worth-of-work analysis (not to be confused with the age fifty-five and over blindness provision just discussed). However, section 404.1584 on evaluation guidelines for the blind does contain a cross reference to specific portions of these non-blind provisions. The referenced portions deal with the way to determine substantial income. It is important to underscore the fact that the significant services and worth-of-work tests do not apply to blind persons, whether they are employees or self-employed persons. Social Security Rulings 83-33 and 83-34 clearly delineate the differences in the evaluation of SGA for blind and non-blind beneficiaries. The test for blind persons is substantial income only. Substantial income is referred to as a primary evaluation guide. The test for non-blind persons involves both primary and secondary evaluation guides. The primary SGA evaluation guideline for non-blind persons is still substantial income, but the amount is determined by SSA regulations, not by statute as with the blind persons' SGA guideline. The statutory guideline for blind persons is higher than the primary guideline for non-blind persons in SSA's regulations. Also, the statutory guideline is raised annually in accordance with increases in the taxable wage base, whereas the regulation guideline is raised less frequently, without regard to taxable wage base changes. Both primary and secondary evaluation guides apply to non-blind persons. Use of the secondary evaluation guides is triggered by earnings amounts specified in the regulations. Secondary evaluation guides include assessments of the extent and nature of the individual's work activity and a determination of the worth of the work, regardless of the amount of the individual's gross pay. SGA Evaluation for Employees The evaluation of SGA begins with the determination of gross pay in cases of both blind and non-blind people, but countable earnings may often be less than the amount of gross pay for both types of beneficiaries. In employment cases, countable earnings will approximate gross pay, but the amount of any subsidies and impairment-related work expenses must be determined and deducted. Sources of subsidy are discussed extensively in the Social Security Rulings identified in this paper. Subsidies include employer-provided services or pay that does not represent compensation for actual productivity. Impairment-related work expenses, which are deductible from gross pay, will be discussed in detail in a later section. The subsidy and impairment-related work expense provisions can have important work incentive effects on beneficiaries. If a blind person has gross pay of somewhere in the range of $900 to $1000 per month, it is possible to compute countable earnings of below $850 by applying these provisions. Also, some blind individuals can continue to receive cash benefits while they are purchasing needed blindness-related devices or paying for necessary reader services. These features allow individuals the opportunity to have income and test their ability to work even beyond the trial work and extended eligibility periods. Blind Employees of Sheltered Workshops Blind employees of sheltered workshops are in a special work situation. Most major cities in the United States have a workshop in which blind people are hired to produce products for use by the federal and state governments. There are about 5,000 blind people working in these plants. Their wages are often not substantial, and sometimes they are actually below the federal minimum wage. These workers earn Social Security quarters of coverage for their employment, and most should become eligible to receive SSDI checks. Those at the low end of the income scale can work as much as they are asked to and not be in danger of running afoul of the SGA evaluation guides. Full-time earnings at the minimum wage are also below the SGA income guidelines for blind persons. But overtime work or earnings in excess of the minimum wage can bring earnings close to the limits. According to SSA's regulations and rulings, the possibility of subsidy should be explored in the case of employees of sheltered workshops. Subsidy is not automatic in such cases, even though the workshops do receive government grants and charitable contributions which are used to maintain their operations. It is actually the individual's productivity that must be known in order to make an SGA determination. A portion of the income may be deducted as already described, if it represents a payment in excess of the value of the productivity. Other work situations may also include subsidies, but such contributed earnings are most likely to be found in sheltered workshops. SGA Evaluation for Self-Employed Persons There are certain specialized considerations which apply to the evaluation of self-employment earnings, as opposed to wages paid to employed beneficiaries. First, self-employment earnings are not the individual's gross income. Surprisingly, most beneficiaries are totally unaware of this. The person's net self-employment income is the figure which compares to gross pay in employment cases. However, in self- employment cases there are several other types of deductions which can be made. Subsidies and impairment-related work expenses are still deductible to the same extent as in employment cases. However, the cost of impairment-related work expenses cannot be applied against net self-employment income, if the expense was already paid for by the business. Subsidies do occur in self-employment cases, and their value should be deducted from net earnings. The subsidies do not represent the value of any work activity performed, so the value of subsidies should not be included in countable earnings. Many blind persons are involved in special work situations in which the possibility of subsidies should be carefully investigated. There are approximately 3,600 blind people who operate vending facility and food service businesses in public buildings throughout the United States. Their right to do business in these areas is established by law, and their work is significantly supervised by an agency of the state in which the business is located. Space, utilities, equipment, furnishings, and business counseling are all contributed to the blind vendor as prescribed by law. In some instances outright payments of money from vending machines not operated by the blind vendor are also contributed to the blind person's business. These payments are required by law and are unrelated to productivity. The cost of any services or goods given to the blind self-employed person must be deducted from net self-employment income to determine countable earnings under the SGA guidelines. Social Security Ruling 83-34 explains the sequence of deductions. After determining net self-employment income, the first subtraction from that figure is the reasonable value of any unpaid help. Unpaid help is necessary assistance provided by another person without compensation, whereas an employee's wages would already have been deducted as a business expense. The next subtraction is the actual amount paid by the individual as impairment-related work expenses, if not already taken as business expenses. The third deduction is the value of unincurred business expenses, including items such as contributed space, utilities, equipment, and business counseling. The purpose of these deductions is to identify the remaining portion of net income, which represents the actual value of the disabled person's productivity. Therefore, any portion of the individual's income which results from significant assistance or outright contribution of services or goods must be excluded from consideration under the substantial income test in the SGA guidelines. The amount remaining is compared to the income guidelines in subsection (d) of section 404.1584 to determine if the individual's work activity is or is not SGA. It is a good idea to prepare a table to display net self-employment income, monthly expenses, and the resulting countable income. A sample of such a table is included as Appendix A. By applying these deductions and income standards, it is possible for a blind self-employed person to have what may appear at first glance to be a fairly substantial income and still be eligible to receive SSDI checks. Blind persons who receive the vending machine income subsidy, for example, may be paid in excess of $20,000 a year from that source, and none of this subsidy amount counts as income under the SGA guidelines. The deductions of unpaid help, contributed space, and other unincurred business expenses often mean that the individual can have net self- employment earnings of $15,000 or more and still be found eligible under the SGA guidelines. The blind vendor who also receives vending machine income subsidies of $20,000 or more in addition to self-employment earnings of $15,000 could still have countable earnings below the SGA guidelines. Deduction of Impairment-Related Work Expenses Impairment-related work expenses are described in section 404.1576 of the SSA regulations and in the Social Security Rulings identified. Impairment-related work expenses for blind persons may include costs of special transportation to, from, and during work, provided that the expenses are work-related and are not paid or reimbursed by someone else. Normal transportation (public or otherwise) to and from work is not considered to be impairment-related. Taxicab service is often considered an impairment-related work expense if other public transportation is not conveniently available. Payment of readers and purchase of specialized blindness-related devices are other typically deductible impairment-related work expenses for blind persons. The actual cost of impairment-related work expenses is an allowed deduction for both employees and self-employed persons. In self-employment cases, however, these costs are frequently paid by the business, in which case they could not be taken again. It is important to emphasize that the expense must be for a service or item purchased by the individual. Contributed services or goods cannot be counted under this deduction, but they may still be considered as subsidies. In self-employment cases as already described, the value of services and goods given to the individual may also be deducted as contributed help or unincurred business expenses. It is important that these types of deductions not be confused with impairment-related work expenses. Unsuccessful Work Attempts The SGA guidelines disregard income resulting from work which a beneficiary was forced to stop because the employment effort was unsuccessful. Normally a work attempt which exceeds six months will not be considered as unsuccessful. Income can be exempted as an unsuccessful work attempt if the individual's disability causes an involuntary cessation of work or a reduction of work activity below the SGA income guidelines. Trial Work Period The trial work period is a long-standing work-incentive feature of the SSDI program. The initial period allowed for trial work consists of nine months, not necessarily consecutive. Months of intermittent work with fairly low earnings can use up all of the nine trial work months. On the other hand, there is absolutely no limit on earnings during any of the nine trial work months, and SGA is not a consideration during any part of this period. At the low end of the scale, earnings of $200 in a single month cause that month to be counted as one of the nine trial work months. In self-employment cases a month is counted if at least fifteen hours of services are performed, regardless of the compensation, and if the work done is of the kind normally performed for pay or profit. Work done purely for training, home care, or therapeutic purposes is not counted as services. These guidelines are often confused with the SGA evaluation guides because they both involve evaluation of work activity. However, it is clear that individuals can easily use all of their trial work months without ever performing SGA. One problem is that beneficiaries sometimes fail to report their work activity during months of trial work because they know that it does not represent SGA. SSA representatives also have been known to advise people not to report their work until it has lasted for at least nine months. These approaches can lead to significant overpayments. Beneficiaries are disappointed when they have been misled into thinking that they have nine months of SGA-level work coming while still receiving benefits. Incidentally, the amount of earnings necessary for a month to be counted as trial work was $75 for months prior to January, 1990. But even the higher amount of $200 is still well below the SGA income guidelines. To be on the safe side, beneficiaries should report all work as soon as it begins. The work done during the initial nine months of trial work is used to evaluate the individual's ability to perform SGA in the future. In blindness cases the evaluation is strictly an earnings test as already described. If earnings exceed SGA during the nine initial trial work months, there are no benefit consequences whatsoever. If average monthly earnings exceed SGA after the nine initial trial work months, benefits will be terminated. The termination month is actually the twelfth month of work, including the initial nine months, the tenth month (in which it is said that the disability ends because of SGA), and two adjustment months. There is no limit on earnings during the tenth, eleventh, and twelfth months of work. When benefits begin after an initial five-month waiting period, the individual is entitled to a trial work period. The waiting period applies when benefits are received for the first time. A waiting period will also be required for any subsequent eligibility period if the receipt of cash benefits was stopped for at least five consecutive years. Beginning in January, 1992, a trial work period will be provided whenever benefits are paid during a new period of disability, whether or not there is a waiting period. Until January, 1992, a trial work month was any month in the past when services or earnings exceeded the amounts described. Now trial work months more than sixty months in the past will not be counted. Trial Work During Extended Eligibility Extended eligibility refers to a period of thirty-three months during which an individual can work while benefits are suspended, not terminated. The individual is actually entitled to a benefit check for any month in which SGA is not performed in accordance with the income guidelines. Entitlement is suspended for months when SGA is performed. This extended eligibility status begins with the thirteenth month of work and ends thirty-three months later. After that point a new claim must be filed if future work activity falls below SGA. Re-entitlement is virtually automatic in blindness cases when future earnings are below the SGA evaluation guides. Period of Disability--Disability Freeze Blind persons who work should not be concerned that the amount of their future benefits will be reduced because of periods of low or no earnings. If a person is not blind, the benefit computation years include virtually all of an individual's working life, even though earnings may not have been very high some of the time. Years during a period of disability (for non-blind disabled persons) are excluded from the earnings record. However, years following the period of disability must be counted even if earnings are very low because of the disability. A disability freeze provision exists in the case of blind persons. This means that the period of disability begins in the year when the individual is blind and also has fully-insured status. The individual may not actually be eligible for benefits during that year (or for many years) because work activity exceeds the SGA income guidelines. However, the disability freeze may still be applied in a later benefit computation. If it is applied, all years within the period of disability (blindness) are excluded from the earnings record. This is done so that the individual's highest years of earnings (outside of the period of disability) can be used to compute the highest benefit payable. If the computation of an individual's benefit would be higher by using years of earnings within the period of disability, the freeze is not applied. Thus the blind individual is not penalized by receiving lower future benefits because of attempts to work. Continuing Eligibility for Medicare Other than the continued payment of cash benefits in the circumstances already described, extended coverage by Medicare can be an important work incentive. Medicare eligibility for both blind and disabled persons can continue beyond the trial work and extended eligibility periods if entitlement to cash benefits stops due to work activity. The individual must pay the Medicare premiums and may refuse the extended coverage without future penalty in the payment of Medicare premiums. Extended coverage is available under both parts A and B of Medicare, but the premium payments which apply to part A (health insurance coverage) are different from those which apply to part B (supplementary medical insurance coverage). For the first forty-eight months of working (which include the trial work months), the individual is covered under part A of Medicare without paying a premium. During the same period the individual may retain part B coverage, but the monthly premium (normally subtracted from the Social Security benefit amount) must be paid. After forty-eight months of work, the individual whose benefits have stopped because of work can retain Medicare coverage under both parts A and B by paying the premiums applicable to each type of coverage. Work Incentives for the Blind in Title XVI Supplemental Security Income Unlike the SSDI program, there are three categories of eligible recipients involved in SSI--the aged (age sixty-five and older), the blind (using the definition of blindness already described), and the disabled. Blind people are categorically eligible for SSI, but they must also meet the income and resource limits of the law. Nonetheless, categorical eligibility has enormous significance. There is no test of SGA in the case of blind applicants or recipients under Title XVI. Monthly payment amounts are limited by income but not by SGA. Because of the income disregards and the deduction of allowed work expenses, the payment amount for the individual or couple may decrease gradually as income increases. It is important to note that eligibility never terminates abruptly as the result of earning above the SGA guidelines. Of course, eligibility can terminate abruptly if the resources of the individual or couple exceed the limits. There is no offset of benefits in the case of excess resources as there is in the case of income. Basic Income Disregards SSI payments are based on financial need. Therefore, all income must be considered, but not all income affects the payment amount to the same extent. A work incentive is given by disregarding earned income to a much greater extent than unearned income. Almost all unearned income is counted and reduces the SSI payment amount dollar for dollar after disregarding up to $20. SSI follows a monthly accounting period, so the values used are monthly. The same $20 disregard can count as earned income if there is no unearned income. In addition, $65 of earned income is disregarded altogether. Beyond this, half of the earned income remaining after the first two subtractions is also deducted. In other words, more than half of all of a recipient's earned income is exempt. This income remains the recipient's and is not counted in determining the SSI payment amount. The sequence of these earned income exclusions can be found in SSA's regulations at section 416.1112(c). Work Expenses for the Blind Paragraph (7) of the above-cited subsection allows the amount of actual expenses reasonably attributable to working to be deducted from the remaining earned income, in the case of blind recipients only. This subtraction is to be made after the previously-described deductions. Work expenses that qualify under this exclusion are the amount withheld or paid in federal, state or local income taxes; FICA or self- employment contributions to Social Security; the cost of any transportation necessary to travel to and from work (ordinary transportation is included); the cost of meals consumed while at work; the care and feeding of a dog guide; the purchase of special devices, equipment, or supplies; payment of readers used on the job; payment of professional fees and union dues; and any other costs that are necessary and work-related. Self-care expenses do not count. This deduction of reasonable work expenses for the blind is a work incentive feature unique to blind recipients under SSI. It differs from the impairment-related work expense deduction allowed for the blind and disabled under SSDI and for the disabled under SSI. One difference is that the expenses do not have to be impairment- related. Even ordinary tax withholding, transportation costs, and meals while at work can be counted. This is an important monetary difference from the more restrictive impairment-related work expense standard. Another important difference is the placement of the subtraction of work expenses for the blind in the sequence of deductions. It follows the subtraction of half the remaining earned income. By contrast, the impairment-related work expense deduction for disabled persons under SSI precedes the subtraction of half the remaining earned income. This means that the remaining income to be divided in half is smaller, and with the work expense deduction taken out early the resulting countable income is therefore higher. The goal of making these subtractions is to achieve the lowest possible countable income and therefore the highest possible SSI check for the recipient. Work expenses for the blind are therefore a major deduction and a strong work incentive. The blind recipient should not lose financially by working. Plans to Achieve Self-Support The plan to achieve self support (PASS) is another form of work incentive deduction under SSI. It is available to both blind and disabled recipients. A PASS can be used to exclude any amount of income that would otherwise have to be figured into the determination of countable income. The income which is segregated into a PASS has no bearing on the amount of SSI payable for any month during which the PASS is in effect. However, the same income must be counted if it is received during any month preceding approval of the PASS or after its expiration. Resources may also be excluded under a PASS. The resource limit for an individual, for example, is $2,000. Under a PASS the individual could save additional money to be used later for buying necessary equipment, paying educational expenses, or starting a business. There is actually no limit on the amount of money that can be excluded and retained as a resource under a PASS. To have an approved PASS, a recipient must develop a self- support goal and a specific plan designed to achieve that goal. The amount of income and resources to be devoted to the plan are also specified by the recipient. The normal approval period for a PASS is eighteen months with two extensions--one for an additional eighteen months and another for twelve months. There have been cases in which individuals were approved for more than one PASS due to changes in the self-support goal. The result of such changes may be a PASS that runs for more than forty-eight months, but this is unusual. Recipients who can work can benefit from having a PASS by retaining SSI while increasing their work activity. Income from work devoted to the PASS can then be used for vocational or professional growth. During the period of the PASS the income and resources devoted to it must be retained, used, and accounted for as separate funds of the recipient. The funds can be used only for the purposes approved by SSA and identified in the PASS. A PASS is not approved for normal living expenses. Nonetheless, having a PASS can help a person meet normal living expenses by retaining or even increasing the SSI payment amount. Determining Countable Income Appendix B presents a step-by-step approach to determining countable income in SSI blindness cases. These steps are a helpful way of presenting the sequence of deductions which can be applied. If all of the income is earned, a very low figure of countable income can be obtained even though total income may be $1000 per month or more. The SSI payment amount for the individual or couple is the difference between countable income and the payment rate for the state in question. There is a standard federal payment amount for individuals and a slightly higher amount for couples. States may supplement SSI above the standard federal payment amount, and some do. The standard federal payment amounts for 1992 are individuals, $422; and couples, $633. These amounts are tied to increases in the consumer price index determined annually, with higher payments effective in January of each new year. A Word to the Wise There are many individual considerations that may apply in particular circumstances and that may significantly affect eligibility or benefit amounts. All of the facts must be presented to the Social Security Administration for a formal determination. Any determination can be reconsidered or appealed in a hearing. The National Federation of the Blind has made a concerted effort to assist blind people in dealing with SSI issues. It is no accident that blind people are legally one of the three categorical groups under SSI, and the distinctions made between the blind and others have significance. Working with the Congress and the Social Security Administration over a period of many years, the National Federation of the Blind has been responsible for bringing about many of these distinctions. Sometimes we understand the application of the SSI law better than representatives at the Social Security office. No one can seriously challenge the role that the Federation has played in this area. We have successfully attempted to shape and direct the SSI program toward offering blind people a hand up, rather than strictly providing a handout. Continuing Medicaid Coverage Medicaid eligibility is generally linked to receipt of SSI cash benefits. Thus, persons who become ineligible for SSI will usually also become ineligible for Medicaid. However, as a work incentive feature, Medicaid eligibility may often be continued for blind or disabled persons who work enough to lose entitlement to monthly SSI checks. To qualify for this extended Medicaid coverage, an individual must continue to be disabled or blind, need Medicaid in order to work, not be able to afford benefits equivalent to the SSI and Medicaid coverage, and meet all SSI eligibility requirements other than earnings. The provisions for this special Medicaid coverage are found in section 1619(b) of the Social Security Act. Details of the eligibility requirements and coverage may vary from state to state. Specific information should be obtained from SSA district offices and from state agencies administering Medicaid. SSI recipients who might lose Medicaid eligibility because their income from work exceeds the SSI limits can retain their Medicaid entitlement as long as they continue to meet the nonearnings requirements under SSI, provided that they were entitled to an SSI benefit and Medicaid in the month prior to becoming ineligible because of income from work. Concluding Notes Work incentives are increasingly emphasized by SSA. Beneficiaries who attempt work should not find that they are later penalized for their efforts. However, the practice of sending notices alleging substantial overpayments due to work activity performed is still prevalent. Upon appeal the alleged overpayments are often found to be incorrect. The most common reason for this is that the file does not contain the complete development of the information necessary to apply the work incentive provisions. Even when an overpayment determination is correct, the circumstances often justify a waiver. The most important fact in this regard is that the beneficiary must report all work activity and any subsequent changes that occur. Failure to report means that the individual was at fault in causing the overpayment and recovery by SSA is then required. Can a blind person work while receiving SSDI or SSI benefits? The answer is definitely yes. Moreover, working while receiving benefits from either program can continue indefinitely under certain circumstances. In many instances earnings of $900 to $1000 per month will not significantly affect continued receipt of cash benefits. Earnings exceeding these amounts place SSDI beneficiaries in great risk of losing entitlement altogether, while SSI recipients are only affected through their benefit amounts. The specific effects of working need to be evaluated in individual circumstances. If beneficiaries and their advocates know the law, working is definitely advantageous both financially and psychologically. APPENDIX A SSDI Countable Income Worksheet Year Net Self-Employment Income Annual Monthly Contributed Space Annual Monthly Contributed Equipment Annual Monthly Contributed Stock Annual Monthly Contributed Services Annual Monthly Vending Machine Income Annual Monthly Countable Income Annual Monthly APPENDIX B SSI Schedule of Income Disregards The following steps should be used to determine countable income and the resulting SSI payment amounts for individuals and couples. Monthly values are used. Step 1: Begin by obtaining the total monthly income from all sources. Some forms of income, such as housing subsidies and food stamps, are not counted as income, but it is safe to assume that all other forms of income must be included. If the calculation is being done for an eligible couple, use the couple's combined income. Step 2: Divide the total monthly income into two categories--unearned and earned. These categories will be treated somewhat differently, so it is necessary to know the amount of income in each. It is possible that one category or the other will have no income. Step 3: Use this step to determine countable unearned income. Some unearned income can be excluded from the total amount of unearned income. Go to step 4 if there is no unearned income. (a) In all cases in which there is unearned income, up to $20 is subtracted (or excluded) from the total. If the unearned income is less than $20, the remaining portion of this $20 deduction is subtracted as described in step 4 (a). The deduction of $20 does not increase if the calculation is being made for a couple. Use $20 for an individual or $20 for a couple. (b) Some SSI recipients participate in a program called PASS (plan to achieve self support). For a recipient to have a PASS, Social Security must approve a plan in advance. Any amount of unearned income being used in a PASS should be subtracted from the remaining unearned income at this point. If there is no approved PASS (or no unearned income being used in an approved PASS), go to step 4. For a couple's calculation, all unearned income being used in a PASS for either or both members of the couple should be combined and subtracted from the unearned income. (c) The remaining unearned income is countable. Save this figure for use under step 5. Step 4: Use this step to determine countable earned income. Some earned income can be excluded from the total amount of earned income. Make the following subtractions in the order indicated, stopping whenever the resulting figure reaches zero: (a) Subtract any remaining portion of the unearned income deduction not used under step 3. If the unearned income were $15, $5 would be left over for use in this step. If the unearned income were $20 or more, none of it would be remaining for use in this step. If there were no unearned income, the entire $20 deduction should be taken in this step. (b) Subtract $65 from the remaining earned income. The deduction of $65 does not increase if the calculation is being made for a couple. Use $65 for an individual or $65 for a couple. (c) Divide the remaining monthly earned income in half. One half is excluded, and the other half is countable. From this point forward deal only with the countable half. This is the remaining countable earned income, but there are more deductions to be made. (d) Subtract the full amount of any ordinary and necessary work expenses for blind persons. If both members of an eligible couple are blind and if both are working, subtract the total amount of their combined work expenses. Costs that may be included are: 1. Income tax payments or the amount of taxes withheld from an employee's wages, including FICA and self-employment Social Security contributions; 2. The cost of transportation to and from work or of any work-related transportation not paid for by someone else, such as an employer; 3. The cost of meals while at work; 4. Dog guide expenses; 5. The cost of purchasing any equipment or supplies used in the performance of the work; 6. Professional fees or union dues; and 7. Any other expenses that are reasonably necessary and work-related. Self-care expenses do not count. (e) Subtract from the remaining earned income the amount of any earned income being used to fulfill a PASS. As described in step (3), the PASS must have been approved in advance by the Social Security Administration in order for this subtraction of earned income to be made. (f) The remaining earned income is countable. Step 5: Determine the total countable income by adding the resulting figures from steps 3 and 4. Step 6: Subtract the total countable income from the monthly payment amount for individuals or couples. Use the couples' rate only if both persons are eligible for SSI. Subtract the countable income from the combined federal and state payment amounts. Contact a Social Security office in your state to determine whether state supplementation applies. The resulting figure after subtracting the countable income is the monthly SSI benefit amount that should be paid. By following this explanation step by step, you should be able to calculate SSI payment amounts in many circumstances. Try computing an SSI payment amount with a simple example such as a blind person having monthly earned income of $1,000. Apply the subtractions called for in steps 3 and 4. It is reasonable to expect that the resulting countable income would be approximately $87.00 per month. This $87 must be subtracted from $407--the payment amount for an individual in a state without supplementation. It would be subtracted from a higher amount in a state with supplementation.