Noxious Earnings Restrictions
friend David just went through what could be termed an noxious and unproductive
bout with the Social Security Administration(SSA). David was an understudy for
Dustin Hoffman's Rainman character (autistic) and works for a large chain
electronics retail corporation. He remains qualified for Supplemental Security
Income (SSI) even though he has a job because he is disabled and earns so little
money. When David wanted a computer he saved for six long years before he was
able to have the funds to buy one. His SSI check is reduced in proportion to his
story is a simple one. After the LA earthquake David and his mother had to move
out of their apartment for earthquake repairs. David went to stay in board and
care facility while his mother made other arrangements for herself for the
months it took to do the repairs. Prior to this move, David had been sending SSA
the required reports of his earnings so SSA could calculate deductions. But due
to the disruption of the earthquake David's routine was upset and he did not
send the copies of his pay checks to SSA during the months he was not living at
home. SSA put a stop on David's SSI check due to not getting his reports.
and his mother got a hearing before an Administrative Law Judge where David's
mother presented the judge with proof of his earnings. As caretaker of his SS
and SSI accounts, she plead that although she is ultimately responsible for
sending in the copies of his pay checks, she has given David any and every
possible means of being as self-sufficient and independent in keeping with
independent living philosophy. Therefore, she allowed him to make and send his
reports himself, which he is very capable of doing and had done without failure
prior to moving into the group home. As it turned out, David thought that he did
not have to send the pay checks because he was living at the group home, not at
his home. In his mind sending in the reports was connected to living in his
home. As his mother explained it “David is not capable of lying, he doesn't
know what that is.”
David's mother told the judge that she had explained to each of the three
care-takers he was with during that time out of the house, that he needed to
send SSA the copies of his pay checks each month. But the judge made no
allowances for David's misunderstanding, the group home's failure to follow
a parent's instructions or his mother's ultimate not seeing that the report
had been sent. Instead, the judge held that not sending the reports was enough
reason and discontinued David's SSI payments.
had his mother to fall back on for financial support, but what about others who
may not have such support and innocently make mistakes and get penalized? A loss
of a few hundred dollars to some may mean losing their apartments and winding up
on the streets or create conditions where they can no longer hold a job. It can
even end in death, as in the case of quadriplegic Lynn Thompson who living on
SSI ($600 per month) tried to earn some extra money by stuffing envelopes at
home. Unbeknownst to her, the work she did was in violation of SSA regulations.
When she reported her income to SSA, they responded with a letter stating that
she had received an overpayment of $10,000, and that her benefits would be
terminated until it was paid back. SSA claimed that her MediCal and attendant
benefits would also be cut off. Losing one's attendant is a ticket for a nursing
home, but loss of Medi-Cal is a death sentence (SSA was wrong about this part,
she would not have lost her Medi-Cal). After a grueling and demeaning contest
with SSA, Lynn Thompson killed herself. She left a recorded message saying that
the reason for her suicide was that SSA had put her through hell and she could
no longer live with the anxiety.
past spring President Clinton signed The Social Security Earnings Test
Elimination Act which permits seniors to earn as much as they want and continue
to receive their Social Security retirement benefits in full without any
deductions. Proponents attributed the bipartisan consensus that green lighted
the bill in Congress to unprecedented economic growth and subsequent worker
shortages nationwide. The move was predicated on government's perception that
it would serve the economy for seniors to continue working. There is a case to
be made for ending earning limitations for disabled workers on Social Security
disability benefits as well.
the previous regulations, both seniors and disabled persons under 65 collecting
Social Security benefits were financially penalized for working -- but the
penalties were not spread evenly. Seniors 65 to 69 who earned more than $17,000
annually lost $1 in benefits for each additional $3 earned. Under Social
Security Disability Insurance (SSDI) rules, a disabled worker can continue to
collect benefits as long as earnings do not exceed $700 per month. When earnings
topple the $700 mark for nine months, one no longer qualifies for benefits
(blind limit is $1,000).
those on SSI, the needs based disability program that David is on, the
eligibility formula gets more complicated. Federal rules allow earnings up to
$65 per month without losing any SSI dollars but then one loses $1 in benefits
for each additional $3 earned. Once one earns twice their SSI check (plus $65)
they will reach the "break even" point and will be severed from
benefits. The cut-off amount varies from state to state but for the majority of
Californians on SSI, it is about $17,388 per year (some plans allow for
deduction of work related expenses and this can push the cut-off a bit higher).
numbers raise basic questions about distributive fairness and treating groups
evenhandedly. Do people realize that workers on SSI (but not SSDI) are boxed
into asset limitations which do not apply to seniors who get Social Security?
Once an SSI recipient saves over $2,000, s/he no longer qualifies for disability
benefits, no matter that one is still impaired. In light of this, is it
equitable that seniors with no limitations on their bank accounts are now
permitted to earn unlimited sums and not lose a penny of their Social Security
when disabled people are forced into abject poverty to keep theirs?
it equitable that a worker on SSI has their income docked once they earn over
$65 and that they lose the right entirely to collect benefits at approximately
the same level of annual earnings - $17,000 - that a senior's Social Security
check began to be reduced by the former retirement earning limitation rules?
equity question is important because poverty is chronically disproportionate
amongst the disabled population. A 1998 National Organization on
Disability/Louis Harris Survey found that fully a third of adults with
disabilities live in a household with an annual income of less than $15,000
compared to one in eight of those without disabilities - a 22 point gap. Poverty
deepens for those surviving on Social Security benefits.
difference in treatment between the senior and disabled workers needs to be
leveled to reflect hardship. Disabled workers, for instance, often have not
worked as many years as seniors who have had a lifetime to build up their
financial assets. Despite the ADA, many disabled workers find themselves without
a job when they acquire a disability. Due to medical and other expenses, many
disabled workers run through any savings and retirement accounts they had
managed to acquire pre-disablement.
workers have not only lost their jobs but have lost their houses and their cars
- everything they owned - waiting for Social Security disability benefits to be
approved. Other persons on disability benefits have lost years of employment due
to prejudicial discrimination and a systemic economic discrimination that forces
them into unemployment when they would prefer to have a job. If they do get a
job, disabled persons may find hardship in the form of underemployment since
workers with impairments are more likely to work part time and more sporadically
than nondisabled workers for both economic and noneconomic reasons.
disabled workers will never be able to recapture the income they forfeited upon
disablement but they also may continue to lose ground because of earnings gaps.
In 1995, for instance, disabled workers earned on average only 72.4 percent of
the amount nondisabled workers earned (Census Bureau).
addition, there are practical administrative reasons to do away with earning
limitations. Any work activity can result in sudden termination of crucial
benefits whether Social Security (SSA) administrative determinations are right
or wrong. Work rules are so complex it takes a degree in SSA policy to manage
work without triggering a predicament. Even when one does get the rules right,
disabled workers can find themselves in receipt of incorrect letters of benefits
termination and overpayment notices from SSA and embroiled in bureaucratic
appeals or appearances before an Administrative Law Judge. One may find
themselves deemed ineligible for Medicaid or personal assistance services or
beset with a hefty share of cost on benefits even though one is earning too
little money to pay for these services. Are the confusing and bureaucratically
costly rules really necessary or productive?
earnings limitation rules can become work disincentives or impediments to work.
They can inflict unnecessary trauma as in Lynn Thompsons and others cases.
Politicians agree that it is beneficial to the nation that seniors continue to
work and collect all of their Social Security benefits even if they make over
$100,000 per year. The new rule is projected to cost the treasury billions of
dollars. The penalty placed on working disabled persons when their costs often
exceed the average worker's has never been truly reasonable. The $2,000.00 cap
on monetary assets for SSI eligibility is totally outdated. What harm would be
done to this wealthy nation if disabled workers on SSDI and SSI were allowed to
earn as much as they could without fear of losing their benefits? How about
changing the rules so those on SSI may have assets over $2,000? Then perhaps,
the largely impoverished working disabled population could get a financial leg
up on life.
persons don't become nondisabled either physically, mentally or economically
just because they work. They retain their impairments and the labor market
disadvantages that come with them under the current economic system. As an
associate who favors a lifelong disability income parity benefit put it “I
believe that if you have gone through enough to get disability benefits, you
have paid far more than the price of a sub-poverty level dole.”
the nation can give wealthy seniors a financial boost it can afford to do the
same for the disabled population.
Marta Russell is author of Beyond Ramps: Disability at the End of the Social Contract (Common Courage Press 1998).