                        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. 
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