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Social Security Incentives
Work Incentive Programs
The Social Security Administration (SSA) has created work incentive programs to assist individuals with disabilities become employed and self employed in a supported manner. Below we describe these programs so that you are aware of the resources available.
Trial Work Period (TWP)
SSDI recipients are allowed nine months of Trial Work Period (TWP). During this time, self-employed individuals are allowed to earn over $620 and work more than 80 hours per month. These months do not have to be consecutive but an individual only gets nine months of TWP per period of disability. After the ninth month, an additional 3 month grace period is extended if your earnings have exceeded Substantial Gainful Activity (SGA) during the TWP.
Extended Period of TWP Eligibility
Additionally, for the 36 months following the ninth month of TWP, the entrepreneur will be on an extended period of eligibility which allows them to receive an SSDI check for any month in which the earnings of the business were below SGA, a great safety net considering the uncertainty associated with business start up.
Plans for Achieving Self-Support (PASS)
The PASS program is a work incentives developed by the Social Security Administration that assists SSI and certain SSDI recipients reach self sufficiency or establish, maintain or increase SSI benefits in a supported manner by NOT counting some of the income, assets or resources generated by the business over an 18 month period.
This means that rather than a person losing some or all of their benefits due to being gainfully self-employed, they have the opportunity to redirect the funds that would otherwise have been lost back into the business.
The PASS plan is a written document that:
-Specifies a work goal
-States what income or resources will be set aside and how they will be spent
-Defines the duration of time it will take to reach this goal
-Describes what resources will be needed to accomplish the goal
PASS funds can be used for operating capital, or to purchase inventory, supplies, accounting assistance, legal consultation, training, etc. There are few limitations on the use of PASS funds as long as it is necessary to reach the determined goal.
If the goal of the PASS plan is self employment, a comprehensive business plan must be included with the PASS documents.
Impairment Related Work Expenses (IRWE)
This program can be used alone or in conjunction with a PASS plan to reduce the countable gross income of a business resulting in an increased monthly SSI benefit. Monthly costs incurred for transportation, assistive technology, medical devices and more can be deducted from business income if it can be proven a necessity to performing the functions of the business and the costs are not subsidized by other sources (Medicaid, etc). The rate of deduction is one half of the actual costs. Persons who are blind can take Blind Work Expenses (BWE) which can be deducted at 100% of the cost.
Click here for more information on IRWE.
1619 (b)
Medicaid does not automatically terminate when a client reaches a certain income level. Some SSI recipients will qualify for continued Medicaid coverage through the 1619(b) clause if they can prove a need for Medicaid coverage and do not earn over the state or individual income thresholds.
Click here for more information about 1619(b). |
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