"These new regulations will encourage individuals with disabilities to test their ability to work," said Kenneth S. Apfel, Commissioner of Social Security.
The first new rule increases the amount of earnings
that are considered to be gainful employment. Beginning January 1,
a Social Security Disability beneficiary can earn $740 a month and remain
eligible for benefits. The
Social Security Administration uses the term
"substantial gainful activity" (SGA) to determine if work is substantial
enough to make a person ineligible for benefits. Under the new rule,
the current monthly SGA earnings limit of $700, which became effective
July 1999, will be automatically adjusted annually based on increases in
the national average wage index. This amount applies to people with
disabilities other than blindness.
"This new rule is good news for Social Security Disability beneficiaries," commented Commissioner Apfel. "Disability beneficiaries will now be able to count on having an SGA level that accurately reflects annual increases in the national average wage."
The second new rule affects the trial work period (TWP).
Currently, the TWP allows disability beneficiaries to test their ability
to work for at least nine months. During the TWP, Social Security
beneficiaries may earn any
amount and receive full Social Security Disability
benefits. Currently, earnings of $200 in a month count as a trial
work month. The rule increases that amount to $530 per month and
links annual changes to increases in the national average wage index.
After completion of nine trial work months, the SGA level is used to determine
whether earnings are substantial or not. If earnings fall below the SGA
level, full benefits generally continue. If earnings are higher than
the SGA level, cash benefits are normally suspended while medical benefits
continue.
The third and final rule in the package allows for more income to be excluded when a student who receives Supplemental Security Income (SSI) returns to work. Under current SSI law, when a student under the age of 22 works, up to $400 of earned income (wages or self-employment) per month is not counted when determining eligibility. The maximum yearly exclusion is $1,620. The new rule increases the monthly excluded amount to $1,290 and the maximum yearly amount to $5,200. This yearly exclusion roughly corresponds to what a student may realistically earn in part-time or summer employment. In addition, both amounts will be automatically annually adjusted based on increases in the cost-of-living index.
SSA pays cash benefits to people whom, due to the onset
of a disability that is expected to last more than a year or result in
death, are unable to earn a substantial wage. SSA administers two
disability programs: Social
Security Disability Insurance and Supplemental Security
Income.
Social Security Disability Insurance pays monthly benefits
to people who have earned enough Social Security credits. Credits
are earned by working and paying Social Security taxes. Benefit payments
are financed by the Social Security Disability Insurance Trust Fund.
This program pays an average monthly benefit of $786 to 5 million workers
with disabilities. In addition, some 1.6 million members of their
families receive monthly
benefits.
SSI, a cash assistance program where eligibility is based on financial need, provides monthly payments to people who have low income and few assets. Although this program is run by the Social Security Administration, the payments are financed by the general revenue funds, not from Social Security taxes. Nationwide, there are 6.6 million people receiving SSI benefits, including 900,000 disabled children.
The increase in the SGA level affects both Social Security Disability Insurance benefits and SSI benefits. The term SGA is part of the statutory definition of disability that requires an individual to be unable to engage in substantial work for initial and ongoing eligibility under the Social Security Disability Insurance program and initial eligibility under the SSI program.
The trial work period is relevant only to the Social
Security Disability Insurance program, while the student earned income
exclusion is relevant only to the SSI program.
To view this online go to http://www.ssa.gov/enews/enewspress010501.htm