How much can you earn if you're on SSI?
(Column: Ask the Attorney)
I'm frequently asked by disability recipients if they can try to work and earn money, and if they do work, whether it will affect their disability and medical benefits. The simple answer to both questions is "yes." The more detailed answer depends upon what benefits a person is receiving (SSI, SSD, or a combination of SSI and SSD, Medicaid or Medicare), how much the person is earning, and whether the work is considered competitive or sheltered. This article will address the impact of work on SSI/Medicaid beneficiaries. In subsequent issues, I will address the impact of work on beneficiaries of SSD, and discuss opportunities available under the Ticket to Work and Work Improvement Act of 1999.
To determine the effect of work activity on SSI benefits, you must first establish whether the work is competitive or sheltered. Sheltered work is performed in a highly structured environment with supports available to enable the person to do the job. The job is only available to participants in the sheltered workshop program. It is not available to others. If the work is sheltered, there is no impact on benefits.
For persons engaged in non-sheltered work and receiving SSI benefits, the basic formula to determine the effect on benefits is as follows: the first $20 of earnings are disregarded (assuming that the beneficiary does not have unearned income such as interest or tax refund income, in which case the $20 disregard will be attributed to the unearned income and not available to reduce the earned income); the next $65 of earnings are also disregarded; then, if person has income-related work expenses such as extraordinary travel expenses related to one's disability, these are deducted; after these amounts are subtracted from gross earnings, the Social Security Administration ("SSA") will withhold one of every two dollars earned until your 2001 "living alone" rate of $617 is zeroed out.
Here's an example if you earn $800 per month: Take your $800, subtract $85 in disregards and that equals $715. Divide $715 by two and that equals $357.50. SSA will withhold $357.50 of your SSI benefits.
Here's an example if you earn $1,317 per month: Take your $1,317 and subtract $85 in disregards. What you have left is $1,232. Divide $1,232 by two and you get $616. SSA will withhold $616 of your SSI benefits.
$1,317 is an important bright line test in 2001 because at this level of earnings, you continue to receive $1 in SSI benefits. New York State law provides that if you receive at least $1 in SSI benefits, you are entitled to Medicaid benefits.
But what happens if you earn more than $1,317 and thus no longer receive any SSI monies? You continue to be entitled to Medicaid benefits under the section 1619(b) program. This program provides that, as a former SSI recipient, you may continue to receive Medicaid as long as you earn under $31,907 year, are unable to pay unexpected medical bills in the next 12 months without Medicaid, received SSI in one out of the prior 12 months, and continue to be disabled. Sustained earnings of $700 a month may trigger a review by SSA to determine if you are still disabled.
I always caution recipients that if they are going to work, they must keep accurate records of earnings and dates of earnings and report the information in a regular and timely manner to SSA (by the 10th of the following month). Unfortunately, problems arise when SSA receives and processes the information. Remember, SSA is a huge bureaucracy that processes enormous amounts of information. Errors are inadvertently made, so it is up to you to be your own advocate. Use your records to confirm that SSA properly applies the formula. If there is an error, call or go to your local office immediately. Also, be advised that it can take SSA up to six months to enter the earnings information. Conversely, when you stop working, there will be close to six months in which you will receive reduced benefits based on your prior work. This is important to factor into your household budget.
The rules are complicated, but understandable, and provide important incentives to SSI recipients to become part of the workforce.