How Sheltered Work Affects Social Security Disability

Sheltered work is work done by people with disabilities under special supervision. This work is performed at "sheltered workshops," which are sometimes referred to as work centers. Sheltered work often pays below minimum wage (legally) and is geared towards providing disabled people with the basic skills needed to work in the general economy.

Sheltered work sometimes includes physical rehabilitation or instruction in life skills such as personal hygiene, the importance of being on-time for work, how to apply for jobs, and how to manage money. Sheltered workshops are often run by nonprofit organizations or are part of state or local government programs.

If you are employed in by a sheltered workshop, your earnings may or may not affect your eligibility for Supplemental Security Income (SSI) or your SSI benefit amount. To understand how income from employment at a sheltered workshop can impact SSI, you first need to understand the basic requirements for SSI eligibility.

The Basic Requirements for SSI

To be eligible for SSI, you need to have low income and not be earning so much in wages that you're considered to be doing "substantial gainful activity" (SGA).

SGA

For 2022, the Social Security Administration (SSA) defined SGA as earning $1,470 a month from working. The SSA generally counts wages from sheltered work employment in the same manner as work performed in the general workplace. (There's an exception when you first begin working in sheltered employment.)

After you have been on SSI for one month, the SSA won't consider whether your earnings (from a sheltered workshop or any other workplace) are over the SGA level, but your earnings will lower your SSI payment.

SSI Income Limits

To be eligible for SSI, your countable income cannot be more than the federal benefit rate (FBR). The FBR is a dollar amount that is set by the federal government each year. For 2022, the FBR is $914 for a single person and $1,371 for a married couple.

Countable income can be earned (money you are paid for a job you do) or unearned (money you don't have to work for such as interest from a bank account). Here are examples of countable income:

• money you earn from working (this generally includes wages from sheltered employment)
• the value of free food and shelter, and
• unemployment benefits.

The SSA will also exclude some of your income when it calculates your countable income. This is called the earned income exclusion and will be discussed more below.

Sheltered Work and SSI Eligibility

The way sheltered work affects your SSI eligibility depends on which stage in the SSI process you are in.

Sheltered Work Income at the Application Level

When you first apply for SSI, the SSA counts the income you earn in a sheltered workshop the same way it counts income that is earned in an unsheltered work environment. This means that if you are working above the SGA level, you will be ineligible for SSI, even if the work is performed in a sheltered work environment.

However, in some cases, the SSA will look specifically at the type of work you are doing instead of your earnings to determine whether it is SGA. For example, an injured military service member may be employed in a therapy program but still get paid her full salary. Here, the SSA wouldn't look at the service member's salary; rather it would determine the reasonable value of the work being performed to see if it is SGA.

Sheltered Workshop Training Period

When individuals first enter a sheltered work program, they will usually have a period of time where they are evaluated to determine their specific needs. During this phase, workers may also receive life-skills training or other training needed to care for one's self and to develop independence. The worker may also receive the training needed to do a specific job. Sometimes workers are paid a small wage or receive a stipend during this phase of the sheltered work program. The SSA doesn't consider these wages as income for the purposes of SSI because it views the worker as a student rather than an employee during this time. (They are considered non-employees under a rule called the common law control test rule, or CLCT.)

Once workers leave the rehabilitation program and enter the regular workforce, they are considered active employees, and their wages are no longer protected by the CLCT rule.

The Inability to Enter the Regular Workforce

In some cases, a person may not be able to enter the regular workforce once the rehabilitation phase has ended. This can happen if the worker:

• must stay in the sheltered workshop program because the severity of the disability prevents the worker from being employed in the regular workforce
• leaves the sheltered workshop program and begins subsidized or supported employment, or
• completes the rehabilitation phase but must stay in the sheltered workshop program until she can find a job.

In these cases, the worker's income will eventually be counted for SSI eligibility purposes. For more information on the details, contact the SSA directly.

After SSI Approval and Start of Regular Sheltered Work

As mentioned above, after you are approved for SSI benefits, the SSA doesn't consider whether you are working above the SGA level. However, the more money you earn from your sheltered work, the lower your SSI benefit may be. This is because your SSI benefit amount is the difference between your countable earnings and the SSI payment (FBR).

In calculating countable earnings, however, the SSA doesn't include all of your wages. For example, the SSA will exclude the first $65 of the wages your earn at your sheltered workplace plus half the amount you earn over that. This is called the earned income exclusion. Additionally, the SSA will exclude an additional $20 from your earnings (unless you have unearned income, then it will be taken from that amount). This means that you can generally earn about $1,500 a month from your sheltered work employment and still receive a small SSI payment.

If You Need More Help

You should contact the SSA directly if you have more questions about how sheltered workshop employment may affect your eligibility for benefits or your benefit amount. You can find their contact information here: https://www.ssa.gov/agency/contact/

If you are applying for SSI benefits, it may also be helpful to talk to an experienced disability attorney to see how your work may affect your eligibility.

_{Updated January 4, 2023}