If you are receiving disability benefits through the SSI program and think you may be able to return to work, SSI has numerous incentives and rules to encourage SSI recipients to return to work. (SSI is the needs-based disability program; Social Security Disability Insurance has it own trial work rules.)
To encourage SSI recipients to work if they can, Social Security has some incentive rules regarding how much income from working will be counted against a person's SSI benefits. (Learn more about the SSI income limits and countable income.)
Treatment of earned income
To encourage SSI recipients to do some type of part-time work even while receiving benefits, over half of the income you earn while working doesn't count toward the income limit for SSI when determining eligibility. However, your SSI benefit will be reduced if you are earning money working. The first $65 of earned income that you make (or $85 if you have no unearned income) is disregarded; after that, your SSI benefits are reduced by $1 for every $2 of gross earned income. This is a work incentive because any unearned income you have reduces SSI benefits on a one-for-one basis.
Impairment-related work expenses
Certain impairment-related expenses may be subtracted from your gross income from work, reducing the amount of the SSI offset. These expenses include amounts paid for assistive or adaptive devices needed for work, costs of paratransit or taxi transportation to work, costs of adaptive automotive controls or devices, and medical expenses related to an impairment. (The impairment for which you paid medical expenses need not be the impairment for which you were found disabled; however, routine medical and dental expenses that would be incurred if you were not disabled may not be subtracted from your income.) Social Security's "Red Book" provides a comprehensive list of qualifying impairment-related work expenses (but expenses not listed may be eligible for impairment-related work expense treatment; the determination is made on a case-by-case basis).
Blind work expenses
Certain work expenses may be deducted by blind SSI recipients from gross income from work, reducing the amount of the SSI offset. The list of deductible blind work expenses is much broader than deductible impairment-related work expenses, and includes withheld taxes, all meals consumed during work hours, licenses, fees and union dues related to work or a profession, adaptive devices for blind people, and all costs of purchasing and maintaining a guide dog. A comprehensive list of qualifying blind work expenses can be found in Social Security's "Red Book."
Property essential to self-support
Inventory and tools used by employees for work are not counted as resources against the SSI resource (asset) limit.
Student earned income exclusion
Certain students can claim the student earned income exclusion to have part of their income from work disregarded when determining the SSI offset for earned income. If you if you are under age 22 and are regularly attending school (in grades 7-12 for at least 12 hours per week, in college or university for at least 8 hours per week, or in a training course to prepare for employment for at least 12 hours per week or 15 hours per week if the course includes shop practice). Alternatively, individuals who are home-schooled because of their disability are also entitled to the exclusion. In 2012, students eligible for this exclusion can exclude up to $1,700 of earned income per month, up to a maximum yearly amount of $6,840.
Unincurred business expenses
Unincurred business expenses are business expenses paid by a third party, such as a state department of vocational rehabilitation, that would be treated as business expenses if they were to be paid by the self-employed SSI recipient. These expenses are deducted from gross income in determining net earnings from self-employment in the same manner as if the self-employed person had incurred the business expense.
Example: The State Department of Vocational Rehabilitation pays for Walter, a blind SSI recipient, with a rent-free kiosk in the state capitol building from which the SSI recipient operates a shop selling snacks, magazines, and sundries. The kiosk has a rental value of $500 per month. Walter can subtract the $500 per month from his gross income in the same manner as if he had paid the rent each month.
After your income from work reaches the point that fully offsets your SSI benefits (meaning your SSI disability benefits will stop), you remain entitled to Medicaid benefits until your gross income from work reaches a "threshold" amount. The threshold amount varies from state to state (reflecting cost-of-living differences in the various states) and is adjusted annually for inflation. Social Security's continued Medicaid eligibility page has the Medicaid threshold amounts by state. In addition, states have the option of offering Medicaid to individuals whose income exceeds the threshold amount.
As long as you remain eligible for continuing Medicaid benefits, your SSI disability benefits can resume if your income falls below the amount that fully offsets your SSI benefits (without filing a new disability application).
Back to Work Plans and Programs
Social Security has several programs for SSI recipients who are trying to learn a trade, try to work, and/or become self-sufficient.
Plan to Achieve Self Support (PASS)
Plans to achieve self support, or "PASS plans," allow SSI recipients to set aside funds received from sources other than SSI (including earned income from work and SSDI benefits) to purchase items or services that that will allow the SSI recipient to achieve a work goal and become self-sufficient, or at least less dependent on SSI benefits.
Funds set aside in a PASS plan are not counted in determining the amount of SSI benefits you are entitled to each month (the funds are not counted against the SSI income limit or the asset limit). As a result, you can set aside substantial amounts of income and still receive the full SSI benefit amount. PASS plan funds are routinely used to pay for large ticket items such as college tuition, computers, and automobiles, although they may be used to purchase any type of work-related items, such as drill presses, tools, and chef's knives.
PASS plan work goals and proposed purchases must be in writing and pre-approved by Social Security. For more information on creating a PASS plan, talk to a Social Security representative or see Nolo's Guide to Social Security Disability, by David Morton, M.D.
Ticket to Work Program
The Ticket to Work program allows SSI recipients to receive vocational counseling and training services from a state department of vocational rehabilitation or alternative providers known as "employment networks."
The Ticket to Work program is intended to be used by individuals who contemplate returning to full-time work. If you plan to seek only part-time work, you can obtain services from your department of vocational rehabilitation without participating in the Ticket to Work program.
To learn more, read our article on SSI's Ticket to Work program.
This benefit is for those whose disability benefits are terminated due to income from work. SSI (and SSDI) recipients are eligible for a fast-tracked reinstatement of their disability benefits if they become eligible for benefits within five years after their benefits are terminated due to income from work. For more information, see our article on expedited reinstatement.