To amend titles II and XVI of the Social Security Act to provide for equitable treatment of disability beneficiaries with waxing and waning medical conditions by establishing, through the implementation of a sliding scale of benefits based on income, a system under which higher incomes result in lower benefits and lower incomes result in higher benefits, and work is incentivized by allowing greater total monthly income when working than could be provided by work or benefits alone.

Summary: Encourage Initiative and Promote Self-Esteem Act of 2008 - Amends titles II (Old Age, Survivors and Disability Insurance) (OASDI) and XVI (Supplemental Security Income) of the Social Security Act to establish special rules for benefits based on waxing and waning medical conditions in qualified disabled individuals.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Encourage Initiative and Promote 
Self-Esteem Act of 2008''.

SEC. 2. AMENDMENTS TO TITLE II OF THE SOCIAL SECURITY ACT.

    (a) In General.--Section 222 of the Social Security Act (42 U.S.C. 
422) is amended by adding at the end the following new subsection:

    ``Special Rules for Benefits Based on Waxing and Waning Medical 
                               Condition

    ``(f)(1) In the case of any qualifying disabled individual--
            ``(A) the termination month for purposes of section 
        223(a)(1) or subsection (d)(1)(G), (e)(1), or (f)(1) of section 
        202 shall be, in lieu of the termination month otherwise 
        described therein, the third month following the end of the 
        individual's special entitlement period,
            ``(B) the extent to which benefits of the individual under 
        section 223 or subsection (d), (e), or (f) of section 202 are 
        payable for any month during the individual's special 
        entitlement period shall be determined without regard to 
        whether the individual engages in substantial gainful activity,
            ``(C) the amount of the individual's monthly insurance 
        benefit payable for any month during the special entitlement 
        period shall not exceed the maximum benefit payment for the 
        month determined under paragraph (4), and
            ``(D) the Commissioner shall not undertake a review of such 
        individual's disability during any month following a month in 
        which such individual performs services from which such 
        individual earns the greater of $350 or the dollar amount 
        derived for the month for purposes of this subparagraph under 
        paragraph (6).
    ``(2) For purposes of paragraph (1), the term `qualifying disabled 
individual' means an individual--
            ``(A) who is entitled to disability insurance benefits 
        under section 223, child's insurance benefits under section 
        202(d) based on the individual's disability, or widow's or 
        widower's insurance benefits under subsection (e) or (f) of 
        section 202 based on the individual's disability, and
            ``(B) whose disability is based (in whole or in part) on a 
        waxing and waning medical condition.
    ``(3) For purposes of paragraph (1), the special entitlement period 
of an individual under this subsection--
            ``(A) begins with the month in which the individual becomes 
        entitled to benefits described in paragraph (2)(A), and
            ``(B) ends with any month during which the Commissioner 
        determines that the impairment on the basis of which such 
        benefits are provided has ceased, does not exist, or is not 
        disabling.
    ``(4) The amount of a qualifying disabled individual's benefit 
described in paragraph (2) which is payable for any month under this 
title commencing with or after such individual's 7th month of 
entitlement shall not exceed the amount of such benefit otherwise 
payable under this title, reduced (to not less than zero), by \2/3\ of 
the individual's excess trial earnings amount for such month.
    ``(5) For purposes of this paragraph--
            ``(A) The term `waxing and waning medical condition' means, 
        in connection with an individual, any medical condition which, 
        prior to the first month of entitlement of the individual, has 
        been certified to the Commissioner by a qualified physician as 
        a condition which, in the case of such individual, may 
        reasonably be expected to involve, in the absence of recovery, 
        periods for which the individual will be able to engage in 
        substantial gainful activity interspersed among periods for 
        which the individual will not, by reason of a lack of adequate 
        and reasonably available assistive technology, be able to 
        engage in substantial gainful activity.
            ``(B) The term `excess trial earnings' of an individual for 
        any month means the excess (if any) of--
                    ``(i) the average amount earned by such individual 
                from services performed each month during the most 
                recent test period commencing with or after the first 
                month of the such individual's special entitlement 
                period, over
                    ``(ii) the trial earnings threshold for such month.
            ``(C) The term `test period' in connection with any month 
        means the period of the first 3 calendar months of the period 
        of 6 calendar months immediately preceding such month.
            ``(D) The term `trial earnings threshold' for a month means 
        the greater of $670 or the product derived for the month for 
        purposes of this subparagraph under paragraph (6).
    ``(6) The product derived under this paragraph for any month for 
purposes of subparagraph (D) of paragraph (1) or subparagraph (D) of 
paragraph (5) is the product derived by multiplying the dollar amount 
specified in such subparagraph by the ratio of--
            ``(A) the national average wage index (as defined in 
        section 209(k)(1)) for the first of the 2 preceding calendar 
        years, to
            ``(B) the national average wage index (as so defined) for 
        calendar year 2006.
Any such product which is not a multiple of $10 shall be rounded to the 
next higher multiple of $10 where such product is a multiple of $5 but 
not of $10 and to the nearest multiple of $10 in any other case. The 
Secretary shall determine and publish the trial earnings threshold for 
each month in November of the preceding calendar year.''.
    (b) Conforming Amendments.--
            (1) Termination month.--
                    (A) Section 223(a)(1) of such Act (42 U.S.C. 
                423(a)(1)) is amended by inserting, after the first 
                full sentence beginning in the matter following 
                subparagraph (E), the following new sentence: ``The 
                termination month of a qualifying disabled individual 
                (as defined in section 222(f)(2)) shall be determined 
                under section 222(f)(1)(A).''.
                    (B) Section 202(d)(1)(G)(i) of such Act (42 U.S.C. 
                402(d)(1)(G)(i)) is amended by striking ``activity)'' 
                and inserting ``activity, and, in the case of a 
                qualifying disabled individual (as defined in section 
                222(f)(2)), the termination month shall be the month 
                determined under section 222(f)(1)(A))''.
                    (C) Section 202(e)(1) of such Act (42 U.S.C. 
                402(e)(1)) is amended by inserting, after the first 
                full sentence beginning in the matter following 
                subparagraph (F)(ii), the following new sentence: ``The 
                termination month of a qualifying disabled individual 
                (as defined in section 222(f)(2)) shall be determined 
                under section 222(f)(1)(A).''.
                    (D) Section 202(f)(1) of such Act (42 U.S.C. 
                402(f)(1)) is amended by inserting, after the first 
                full sentence beginning in the matter following 
                subparagraph (F)(ii), the following new sentence: ``The 
                termination month of a qualifying disabled individual 
                (as defined in section 222(f)(2)) shall be determined 
                under section 222(f)(1)(A).''.
            (2) Conforming amendment to current rules regarding 
        substantial gainful activity by other individuals during 
        extended periods of eligibility.--Section 223(e)(1) of such Act 
        (42 U.S.C. 423(e)(1)) is amended by striking ``No benefit'' and 
        inserting ``In the case of an individual other than a 
        qualifying disabled individual (as defined in section 
        222(f)(2)), no benefit'', and by striking ``to an individual'' 
        and inserting ``to such individual''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to individuals who are entitled to disability 
insurance benefits under section 223 of the Social Security Act, 
child's insurance benefits under section 202(d) of such Act (based on 
the individual's disability), or wife's or husband's insurance benefits 
under subsection (b) or (c) of section 202 of such Act (based on the 
individual's disability) on or after the date of the enactment of this 
Act and whose trial work period in connection with such entitlement has 
not terminated as of such date.

SEC. 3. AMENDMENT TO TITLE XVI OF THE SOCIAL SECURITY ACT.

    (a) In General.--Section 1611 of the Social Security Act (42 U.S.C. 
1382) is amended by adding at the end the following new subsection:

   ``Special Rules for Disability Benefit Based on Waxing and Waning 
                           Medical Condition

    ``(j)(1) In the case of any qualifying disabled individual--
            ``(A) the extent to which a benefit under this title by 
        reason of disability is payable with respect to the individual 
        during the special entitlement period of the individual shall 
        be determined without regard to whether the individual is able 
        to engage in substantial gainful activity;
            ``(B) the amount of the benefit payable for any month 
        during the special entitlement period shall not exceed the 
        maximum benefit payable with respect to the individual for the 
        month, as determined under paragraph (4); and
            ``(C) the Commissioner shall not undertake a review of the 
        individual's disability during any month following a month in 
        which such individual performs services from which the 
        individual earns the greater of $350 or the dollar amount 
        derived for the month for purposes of section 222(f)(1)(D) 
        under section 222(f)(6).
    ``(2) For purposes of paragraph (1), the term `qualifying disabled 
individual' means an individual who is an eligible individual for 
purposes of this title by reason of disability, and whose disability is 
based (in whole or in part) on a waxing and waning medical condition.
    ``(3) For purposes of paragraph (1), the special entitlement period 
of an individual--
            ``(A) begins with the month in which the individual becomes 
        entitled to benefits under this title by reason of disability; 
        and
            ``(B) ends with any month during which the Commissioner 
        determines that the impairment on the basis of which such 
        benefits are provided has ceased, does not exist, or is not 
        disabling.
    ``(4) The amount of the benefit of a qualifying disabled individual 
which is payable for any month under this title commencing with or 
after the 7th month for which the individual is eligible for benefits 
under this title by reason of such disability shall not exceed the 
amount of the benefit otherwise payable under this title, reduced (to 
not less than zero) by \2/3\ of the individual's excess trial earnings 
amount for the month.
    ``(5) For purposes of this subsection:
            ``(A) The term `waxing and waning medical condition' means, 
        in connection with an individual, any medical condition which, 
        prior to the first month of eligibility of the individual for 
        benefits under this title by reason of disability, has been 
        certified to the Commissioner by a qualified physician as a 
        condition which, in the case of such individual, may reasonably 
        be expected to involve, in the absence of recovery, periods for 
        which the individual will be able to engage in substantial 
        gainful activity interspersed among periods for which the 
        individual will not, by reason of a lack of adequate and 
        reasonably available assistive technology, be able to engage in 
        substantial gainful activity.
            ``(B) The term `excess trial earnings' of an individual for 
        any month has the meaning given the term in section 
        222(f)(5)(B).
            ``(C) The term `test period' in connection with any month 
        has the meaning given the term in section 222(f)(5)(C).
            ``(D) The term `trial earnings threshold' for a month has 
        the meaning given the term in section 222(f)(5)(D).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to benefits payable for months beginning after the date of the 
enactment of this Act.