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Working While Disabled



This section looks at how your income and health care benefits may be affected if you decide you want to return to work after being on disability.

Almost all programs require that you notify them when you start earning income. Reporting income does NOT necessarily mean your benefits will be affected. You may be able to work and earn income for a designated time period before that happens.

It is important to keep records of all money you earn from working. We suggest you keep a calendar with the dates you worked and your monthly income. This information will let you know how long you can work before your benefits may be affected. Some of the information below repeats definitions given in previous sections; we did this to avoid any possible confusion in understanding this complicated material.



What should I do before I start working?


A. Determine your sources of income

You need to determine where your money is coming from to understand how working will affect your income. Public benefits have very different rules than private benefits. Public benefits are any money that you receive from the government, while private benefits are purchased by either you or your employer.

Most people do not realize that the Social Security Administration (SSA) administers two programs, SSDI and SSI. Social Security Disability Insurance (SSDI) issues checks or directly deposits payments into your account on the 3rd of each month, and is for those who qualify through their work history. Supplemental Security Income (SSI) issues its checks on the 1st of each month, and is a program for low income people with disabilities. The State of California also administers a program called State Disability PPInsurance (SDI) which, you may recall, arrives every other week.

Private Benefits can include either Short Term Disability Insurance (STD) or Long Term Disability Insurance (LTD). With all these acronyms, determining your source of income can be a mind boggling task.


B. Determine how medical costs are handled

It is important to keep in mind how working might affect your health coverage. Most people receive help with medical costs through a combination of the following: Medi-Cal, Medicare, ADAP (AIDS Drug Assistance Program), CARE-HIPP, Medi-Cal HIPP, private health insurance, and COBRA/OBRA. Some programs have financial eligibility requirements, while others end if you become eligible for another source of medical coverage. See the sections of this brochure that are relevant to you.


C. Understand how each benefit is affected by work- ing while disabled

The sections that follow will discuss how working affects each benefit. Read the sections that are relevant to you. If you have any question, be sure to contact a benefits counselor or your benefit provider for further information. Being fully informed is your best weapon against surprises.



Calculating Your New Social Security Benefits


I receive SSDI ONLY (on the 3rd of the month). How will working affect me?

The first thing to keep in mind before working is that SSA defines disability as being unable to work for more than a year. Therefore, it is not a good idea to work during your first year on the program.

Once you are past the one year mark, Social Security encourages you to test your ability to re-enter the work force. SSA has a "trial work" program that allows you to work without risking your benefits. Here's how it works.


Note: SSA deducts Impairment Related Work Expenses or IRWE's (see Question 10) from your earnings before they determine continued eligibility for benefits.



I receive SSI ONLY (on the 1st of the month). How will working affect me?

To determine how much your SSI check will be, take your gross earnings and subtract $65 for the "earned income exclusion," then subtract another $20 as a "general income exclusion." Deduct any Impairment Related Work Expenses (see Question 10), and divide the result by two. The resulting dollar amount is your Countable Income. This is how much your SSI check will be reduced as a result of your earned income. When your Countable Income is equal to or greater than your SSI cash payments, you have reached the Break-Even Point and your benefits stop.



I receive BOTH SSI and SSDI. How will working affect me?

Two sets of rules apply to you - one set for your SSI check and one for your SSDI check. The same rules will apply to your SSDI check as apply for people receiving only SSDI. But your SSI check will be calculated a little differently.

To determine how much your SSI check will be, take your gross earnings (before taxes) and subtract $65 for the "earned income exclusion." You can also deduct any Impairment Related Work Expenses (see Question 10). Now divide your result by two. This is your Countable Income; your SSI check will be reduced by this amount. When your Countable Income equals or exceeds your SSI cash payments, you have reached the Break-Even Point and your benefits stop.



When will my Social Security check(s) be affected?

Your SSDI checks will not be affected by working until after you have completed your nine month Trial Work Period and the next three months of your grace period. Then, if you are earning over $500, you are not entitled to a check. Since SSDI pays you a month late (e.g., you get a check on the 3rd of July for the month of June), you will know if you are entitled to a check before Social Security knows. If they send you a check when you are not entitled to one, you should return the check to your local Social Security office. If Social Security overpays you, you will be required to pay them back.

Your SSI check will rexect the reduction for Countable Income two months after the months worked unless you have reached the Break Even Point. When you reach the Break Even Point, your SSI will be affected that month. You will know if you are entitled to a check before Social Security knows. Again, if they send you a check when you are not entitled to one, you should return the check to your local Social Security office. If Social Security overpays you, you will be required to pay them back.



I am receiving California State Disability Insurance (SDI). How will working affect me?

The combination of earned income and SDI cannot exceed 100% of monthly income before disability. When the combination exceeds 100% the SDI benefit is reduced by that amount and that amount will be added to the end of the claim period. This will increase the SDI claim period. Report earned income directly to SDI.

Continuing Disability Reviews and Other Important Things to Know About SSA



What is a "Continuing Disability Review" (CDR)?

The Social Security Administration will conduct a CDR to determine if a recipient is still medically disabled.



What makes Social Security decide to do a CDR?

The law requires a CDR to be done at least every five to seven years. CDRs are likely to occur if a person returns to work before being disabled for at least 12 months from onset of Social Security disability. This is because Social Security defines disability as not being able to work for more than a year.

In addition, a CDR is often triggered when a person has engaged in "substantial gainful activity" (SGA) by earning more than $500 per month. If you are consistently working at SGA levels, Social Security assumes you are able to work. CDRs also usually occur after a person has completed the nine month Trial Work Period and continues to earn over $500 per month.



How do I prepare for a CDR?

Always see a treating physician on a regular basis. Report all symptoms to the doctor by comparing your current health to when you were feeling PERFECTLY well. When you go to the doctor be prepared to report all symptoms that have occurred since the last appointment (i.e. report symptoms during the past month or two, not just how you felt yesterday). Also, be sure to report to your doctor any adverse effects returning to work has had (e.g., more fatigue or more frequent symptoms).



What is an "Impairment Related Work Expense" (IRWE)?

IRWEs are documented expenses for services or items related to one's impairment that are needed in order to work. These expenses may include the cost that you pay for any item or service you need to work, even if the item or service is also useful to you in your daily living. Examples include specialized work equipment or prescribed medical expenses such as co-payments for prescriptions and doctor visits.



How do I report my earnings or Impairment Related Work Expenses (IRWE's) to Social Security?

Currently there are no specific "return to work" or "working while disabled" earned income forms. SSA representatives take the information or ask you to complete a Work Activity form. Income should be reported to your local SSA District Office by the tenth day of the month following the month the income was earned. IRWE's have to be verified by original receipts and canceled checks.

The information must be given to BOTH an SSI representative and an SSDI representative if you are receiving blended payments. This is VERY IMPORTANT, because the two programs will NOT share the information with each other. Otherwise, report your earnings or expenses to the program you are on.



What if I am, or want to be, self-employed?

If you are self-employed you must write a letter to the SSA stating that you are self-employed and what you expect your net annual income will be. SSA will take annual net income (minus business expenses) and divide by 12 months to determine monthly income. The exception is when you have maintained detailed records of each month's earnings and business expenses including invoices, receipts, and other written documentation to support your monthly income statements. SSA will count any month that self-employment involves working 40 hours per month for purposes of applying the Trial Work Period (TWP) and the Extended Period of Eligibility (EPE) rules, as well as the calculations of monthly SSI and/or SSDI benefits.



What if I am blind?

If you are legally blind, Social Security has special rules for you. Contact your local Social Security office for Working While Disabled rules for the visually impaired.


Private Income Benefits

Private benefits are purchased by you or your employer. Every policy is unique so there is no way to predict how working will affect your private benefits. The information that follows is only an attempt to guide you in the right direction. We recommend that you contact a benefits counselor or a lawyer if you need help understanding parts of your policy.



How might working affect my short-term disability (STD) benefits?

The effects of working are determined by specific provisions in the policy. You should read and understand the following parts of the policy:




How might working affect my long-term disability (LTD) benefits?

As with STDs, the effects of working are determined by specific provisions in the LTD policy. Because it could potentially cover a much longer period of time, more issues are raised. You should read and understand the following parts of the policy:



Government Benefits


What happens to my Medicare when I work?


If you are an SSDI recipient entitled to Medicare, you can continue to receive it throughout the Trial Work Period, the three month grace period, and the 36 month Extended Period of Eligibility, regardless of your earnings. If you are not already Medicare eligible, the clock will continue to tick on the 29 month waiting period during this time. As long as you remain eligible, Medicare entitlement will begin once 29 months have elapsed since the onset of disability.



I am on SSI and have Medi-Cal with NO SHARE OF COST. How does working affect my Medi-Cal?

If you are an SSI recipient, you are automatically Medi-Cal eligible with no Share of Cost (SOC). As long as you receive $1 of SSI, your Medi-Cal will be unaffected. Many people, however, don't receive an SSI check but still qualify for Medi-Cal so long as they pay a share of their medical costs each month. The amount of their SOC depends on their income (see the next question). If you are not entitled to an SSI check because your current earned income is too high but you were receiving SSI checks before you began working, then you may be able to continue your Medi-Cal at no cost. To do this, you must request Extended Medi-Cal under Section 1619(b) at the Social Security office. You must meet the following requirements to qualify for the cost-free extension:


A. Meet the disability requirement

B. Have received an SSI cash payment within the previous 12 months

C. Still meet other non-disability requirements:

D. Need Medi-Cal in order to continue working

E. Annual income is below the "threshold" amount, i.e. insufficient to replace SSI and Medi-Cal (1996 threshold was about $24,000 a year)



I have Medi-Cal with a monthly SHARE OF COST (SOC). How will working affect my Medi-Cal eligibility?

If you do not receive SSI, your Medi-Cal eligibility is based on a disabling impairment, and having countable assets of $2000 or less. Your monthly SOC is equal to your unearned (SDI, SSDI) monthly income minus $620. Earned income will increase your SOC by the gross earnings minus $65 divided by two (as with SSI, however, IRWE'S cannot be used to reduce your earned income amount).


Private Benefits


What happens to my COBRA/OBRA when I start working?

If you go back to work at the same employer, you may be able to revert back to the old premiums and medical coverage. If you start working at a new employer, your COBRA/OBRA will end when you become eligible for that employer's health plan.



Will I still be eligible for ADAP (the AIDS Drug Assistance Program) if I go back to work?

This depends on how much money you make. ADAP's only financial eligibility requirement is that your total earnings (both earned and unearned) be less than $32,200 per year (for a family of one) to receive free medications. If you make between $32,200 and $50,000, you may have co-payment obligations and certain other restrictions.



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