A lot of people with disabilities receive monthly Social Security Disability Insurance (SSDI) payments. In fact, about 8.8 million people with disabilities receive a check averaging $1,129 each month. And there are also tens of thousands of attorneys working on Social Security issues across the country.
Like any attorney, my role is to protect clients’ rights and follow their wishes. But as an attorney practicing Social Security law at a Center for Independent Living, my perspective is different because our guiding principle is independence and choice for people with disabilities. For me, this means that I must be asking each client whether his or her goal is to stay on benefits or create a path for economic independence.
The problem is that the current structure of SSDI creates a disincentive for many people with disabilities to get off of benefits. To understand this disincentive, it is important to also understand that there are several brief periods of time when earnings do not affect SSDI benefits.
The most notable of these are the nine “trial work period months” that most SSDI recipients get during which a person can earn any amount of money and his or her benefits are not impacted. However, when trial work months are used up, a person will lose his or her monthly SSDI benefit once his or her earnings from employment exceed the Substantial Gainful Activity (SGA) amount. SGA is set for inflation and rises slightly each year. In 2015, SGA is $1,090 for a person who is sighted; for a person who is blind, it’s $1,820.
So what happens when someone who receives SSDI gets a full time job? Let’s take a look. Imagine that Mary gets a job making $10 an hour, 40 hours per week. She also receives a Social Security check for $1,165. During her trial work period, where she can earn as much money as she wants, her total income will be $2,525 (SSDI check of $1,165 plus earnings of $1,600).
But because her earnings exceed SGA, after the trial work period, her SSDI check will stop. When this happens, she will work 40 hours and receive $1,600 in pay (or $435 more — before taxes — than just receiving a SSDI check).
Does this make sense for Mary? Does she have the necessary long-term care supports to enable her to work? Does she have transportation? Other factors may mean that it doesn’t make sense for Mary to work full time. The workforce may lose the gifts that Mary can bring to the workplace.
What if Mary decides to reduce her hours to stay under SGA? Let’s take a look. Imagine Mary still makes $10 an hour but only works 25 hours per week. Now she earns $1,000 per month and is under SGA. She remains eligible to receive $1,165 in SSDI. Her total income is now $2,165 and she is only working part-time.
Mary may decide to “park” — work but stay under SGA because it makes economic sense to continue to receive SSDI rather than transition off of Social Security benefits and work full-time. This arrangement may work well for Mary. But what about Mary’s college degree? Is she satisfied with part time work? Does Mary want to periodically go through the hoops” to keep the SSDI?
Advocates involved in Social Security reform are analyzing this disincentive to work and are looking for formulas that do not disproportionately favor parking. As it stands now, it generally makes more economic sense to retain SSDI unless someone secures a job that comes with a substantial salary. While rules are necessary for successful programs, I am looking forward to a time when it makes more economic sense for people with disabilities to transition off of SSDI if this is their wish.
Gillian Boscan is a Staff Attorney at Paraquad. She can be reached at firstname.lastname@example.org.
Photo credit: GotCredit