SSI Work-Related Overpayments Lawyer Manual

SSI Work-Related Overpayments 

Since SSI is a means-tested program based on financial need, any income will affect the amount of the SSI check. For an individual who is on SSI and working, SSA has a method to disregard a percentage of earned income, so that not all earnings will be counted to reduce the SSI benefits. First, SSA will deduct $20, the General Income Exclusion, if it was not used against any unearned income. Second, SSA will disregard the first $65 of a beneficiary’s gross monthly earnings. This is called the Earned Income Exclusion. Then, SSA will deduct one dollar from the beneficiary’s SSI check for every two dollars earned.”

For example, if an SSI recipient earns $501, uses no other work incentives (described under “SSI Work Incentives”), and has no unearned income, SSA will calculate the new SSI check as follows:

$501 minus $20 (General Income Exclusion) minus $65 = $416
$416 divided by 2 = $208 Countable Earnings
$733 minus $208 (Countable Earnings) = $525

SSI Work Incentives
 

Like SSDI, SSI recipients can utilize work incentives to reduce their countable income. The SSI and SSDI work incentives are not the same. Also, the SSI work incentives are deducted at various points in the SSI check calculation. See “SSI Calculation Sheet.” It is often possible to reduce or eliminate an SSI overpayment by retroactively utilizing these deductions in the benefit calculation.

Impairment Related Work Expense (IRWE)

Like SSDI, SSI recipients can claim Impairment Related Work Expenses. These are expenses that are related to the primary disability or any secondary disability on record that are necessary for the SSI recipient to go to work and stay on the job. In the SSI calculation formula, IRWEs are deducted from gross income before dividing by 2 just as the General Income Exclusion and Earned Income Exclusion is. IRWEs can include any number of out-of-pocket expenses, such as:

• Medical appointment payments
• Prescription co-payments
• Prosthetic devices
• Transportation costs
• Costs of adaptive devices for automobiles by persons who cannot drive an unmodified automobile

Before an IRWE can be subtracted from countable earnings, SSA must approve the expense. All receipts for IRWEs should be kept for verification with SSA.

Blind Work Expense (BWE)

A Blind Work Expense includes any expense that a blind SSI recipient incurs reasonably related to work. POMS SI 00820.535. BWEs encompass a much broader range of expenses than the Impairment Related Work Expense. BWEs are deducted differently than the General Earned Income Exclusion, Earned Income Exclusion, or IRWEs. BWEs are subtracted in the SSI calculation formula AFTER dividing by 2. A comprehensive list of possible BWEs is located at POMS SI 00820.555 and include:

• Federal, State and local income taxes and Social Security and Medicare taxes
• Professional association, union dues, costs of license
• Mandatory Contributions
• Meals consumed during work hours

Student Earned Income

The Student Earned Income Exclusion allows qualified individuals to exclude up to $1790 (in 2018) per month in gross earnings from countable income, up to $7350 per year. POMS SI 00820.510. This exclusion can often be used by students to work part-time while going to school or take a summer internship with no impact on the SSI check. It is very important that SSA be affirmatively informed that the individual meets the requirements for this exclusion. Otherwise, SSA will not know to use it. It is not uncommon for overpayments to be reduced or completely eliminated once SSA is informed that an individual’s income can be excluded by the Student Earned Income Exclusion.

To qualify for the Student Earned Income Exclusion, an individual must be:

• under age 22 years
• a student regularly attending school.

Regularly attending school has a specific definition that can take into account taking fewer courses because of a disability or other reasons beyond that person’s control. School also includes more than just traditional education such as college POMS SI 00501.020.

Plan for Achieving Self Support (PASS)

SSI recipients can set aside income or assets that would normally count against an SSI check or eligibility into a separate account that is designated as a Plan for Achieving Self Support. The money set aside in a PASS must be used to pay for expenses that will help an individual meet a vocational goal. PASS plans must be approved by SSA. POMS SI 00870.001 et seq.

Common PASS plans include money to pay for books and tuition to college, money to pay for a car to get to work, or money to buy tools of a business. SSA makes sure that the plan is feasible, the individual can still meet necessary expenses while putting this money to use in a PASS, and that all money is spent on expenses related to the goal. It is possible to retroactively establish a PASS in order to erase an overpayment.

SSI Calculation Sheet

It is common for those trying to utilize the SSI calculation to determine the correct amount of the SSI check to forget where to deduct the work incentives or deduct incorrectly. The SSI Calculation table set out below can assist an individual in accurately determining the amount of an SSI check in a given month.

Please keep in mind that SSA utilizes something called “Retrospective Monthly Accounting” and “Transitional Computational Cycle” when determining the amount of SSI due in a particular month. POMS SI 02005.010 and POMS 02005.050. In general, this means that the SSI check amount is based on two months prior with limited exceptions. Therefore, an SSI recipient's earned income in April will impact the SSI check in June in most cases.