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National Council on Disability

1331 F Street, NW, Suite 850

Washington, DC 20004

The Social Security Administrations Efforts to Promote Employment for People with

Disabilities: New Solutions for Old Problems

This report is also available in alternative formats and on the award-winning National Council on

Disability (NCD) Web site (www.ncd.gov).

Publication date: November 30, 2005

202-272-2004 Voice

202-272-2074 TTY

202-272-2022 Fax

The views contained in this report do not necessarily represent those of the Administration as

this and all NCD documents are not subject to the A-19 Executive Branch review process.
“ø ̈·±2ø¥ ›± ́21⁄2·¥ ±2 ‹·­øæ·¥· ̈ß

An independent federal agency making recommendations to the President and Congress

to enhance the quality of life for all Americans with disabilities and their families.

1331 F Street, NW Suite 850 Washington, DC 20004

202-272-2004 Voice 202-272-2074 TTY 202-272-2022 Fax www.ncd.gov

1

Letter of Transmittal

November 30, 2005

The President

The White House

Washington, D.C. 20500

Dear Mr. President:

On behalf of the National Council on Disability (NCD), I am pleased to submit this report, entitled The Social

Security Administrations Efforts to Promote Employment for People with Disabilities: New Solutions for Old

Problems. Under its congressional mandate, NCD is charged with the responsibility to gather information on the

development and implementation of federal laws, programs, and initiatives that affect people with disabilities.

Our nations current disability benefit programs are based on a policy principle that assumes that the presence of a

significant disability and lack of substantial earnings equate with a complete inability to work. Americans with

disabilities remain underemployed, despite the fact that many are willing and able to work. Although the Social

Security Administration (SSA) has instituted a number of incentives to reduce the numerous obstacles to

employment faced by its Supplemental Security Income (SSI) and Social Security Disability Insurance (DI)

beneficiaries, such efforts have had little impact because few beneficiaries are aware of these incentives and how

they affect benefits and access to health care.

In recent times there has not been a comprehensive, research-based examination of the practices that are most likely

to support the employment of SSI and DI beneficiaries. NCD undertook this study to address that absence and found

that the complex obstacles to employment faced by SSA beneficiaries require a comprehensive set of solutions. New

approaches must be identified that emphasize beneficiary control of career planning and the ability to access selfselected services and supports. Public and private health care providers must develop new collaborations and new

approaches to combining coverage from multiple sources to improve program efficiencies. SSA must continue to

work with the Rehabilitation Services Administration and the Department of Labor to improve implementation of

the Ticket to Work program and identify new approaches that will overcome the traditional inability of SSA

beneficiaries to benefit from services provided by the nations employment and training programs. Secondary and

postsecondary educational institutions must emphasize benefits counseling and financial management training as the

foundation for beneficiary self-direction and economic self-sufficiency. Federal agencies and the business

community must realize that collaborative approaches to incorporating beneficiaries into the workforce are needed

as a way to reduce dependence on federal benefits while simultaneously enhancing the productivity and

competitiveness of large and small business.

The recommendations discussed in this report need to be addressed in policy and procedural modifications by both

Congress and the Social Security Administration to significantly address the continuing number of SSA

beneficiaries who never leave the SSI and DI rolls, and to increase the number of beneficiaries who enter, or reenter,

the United States workforce.

Sincerely,

Lex Frieden, Chairperson

(The same letter of transmittal was sent to the President Pro Tempore of the U.S. Senate and the Speaker of the

U.S. House of Representatives.)
2
3

National Council on Disability Members and Staff

Members

Lex Frieden, Chairperson

Patricia Pound, First Vice Chairperson

Glenn Anderson, Ph.D., Second Vice Chairperson

Milton Aponte, J.D.

Robert R. Davila, Ph.D.

Barbara Gillcrist

Graham Hill

Joel I. Kahn, Ph.D.

Young Woo Kang, Ph.D.

Kathleen Martinez

Carol Novak

Anne M. Rader

Marco Rodriguez

David Wenzel

Linda Wetters

Staff

Ethel D. Briggs, Executive Director

Jeffrey T. Rosen, General Counsel and Director of Policy

Julie Carroll, Senior Attorney Advisor

Joan M. Durocher, Senior Attorney Advisor

Martin Gould, Ed.D., Director of Research and Technology

Geraldine Drake Hawkins, Ph.D., Senior Program Analyst

Allan W. Holland, Chief Financial Officer

Pamela OLeary, Sign Language Interpreter

Mark S. Quigley, Director of Communications

Mark E. Seifarth, Congressional Liaison

Brenda Bratton, Executive Assistant

Stacey S. Brown, Staff Assistant

Carla Nelson, Secretary
4

Acknowledgments

The National Council on Disability deeply appreciates Dr. John Kregel and Dr. Beth Bader of

Virginia Commonwealth Universitys Department of Special Education and Disability Policy for

the research and development of this report.
5

Table of Contents

Executive Summary...................................................................................................................... 9

Chapter I: Introduction.............................................................................................................. 19

Overview of the SSDI and SSI Programs................................................................................. 19

Determining Eligibility for DI and SSI..................................................................................... 22

Overview of the Problem.......................................................................................................... 24

Response of Congress and the Social Security Administration to the Problem ....................... 27

State Vocational Rehabilitation Agencies............................................................................. 28

Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA)

(P.L. 106-170)................................................................................................................ 28

The Ticket to Work and Self-Sufficiency Program .............................................................. 29

Expanded Availability of Health Care Services ................................................................... 30

Enhanced Work Incentives ................................................................................................... 31

SSAs Work Incentives Support Plan....................................................................................... 32

Development of Work Incentives............................................................................................. 34

Purpose of the Study................................................................................................................. 37

Research Methodology ......................................................................................................... 38

Content of the Report............................................................................................................ 38

Chapter II: The Mission and Purpose of the SSA Disability Benefit Programs................... 41

Introduction............................................................................................................................... 41

Purpose of the Disability Benefit Programs ............................................................................. 41

A Rigorous Test of Eligibility for SSA Disability Benefits ................................................. 42

The Changing Societal View of Work Disability ................................................................. 43

The Problem.............................................................................................................................. 45

Policy Premises Underlying the Definition of Disability ..................................................... 45

Delinking the Concept of Disability from Work Incapacity................................................. 46

Recognizing the Concept of Partial Disability...................................................................... 48

Recognizing the Dynamic Nature of Disability.................................................................... 49

Providing Early Intervention Services .................................................................................. 50

Attempts by SSA to Impact Its Definition of Disability Through

Modified Program Rules................................................................................................... 51

The Urgent Need for Policy and Program Changes ................................................................. 53

Chapter III: Beneficiary Perspective and Self-Direction........................................................ 55

Introduction............................................................................................................................... 55

The Problem.............................................................................................................................. 56

Customer Service .................................................................................................................. 58

Health Care Concerns ........................................................................................................... 59

Deficiencies in the Wage Reporting System Resulting in Overpayments............................ 60

Complexity of Program Rules .............................................................................................. 61

Insufficient Access to Timely and Accurate Earnings Data ................................................. 62

Marriage Penalty................................................................................................................... 62
6

Previous Attempts by Congress and SSA to Improve Customer Service and

Beneficiary Control........................................................................................................... 64

The Ticket to Work and Work Incentives Improvement Act ............................................... 65

SSAs Work Incentives Support Plan ................................................................................... 66

Recommendations for SSA Policy Change: Beneficiary Perspective and Self-Direction ....... 69

Recommendations Specific to Customer Service ................................................................. 70

Recommendations Specific to the Ticket to Work Program ................................................ 71

Recommendations Specific to Facilitating Beneficiary Choice ........................................... 73

Recommendations Specific to Reducing SSA Overpayments to Beneficiaries ................... 73

Recommendations for Eliminating the Marriage Penalty..................................................... 74

Summary................................................................................................................................... 75

Chapter IV: Income Issues and Incentives............................................................................... 77

Introduction............................................................................................................................... 77

The Problem.............................................................................................................................. 78

Employment Disincentives in the Disability Benefit Programs ........................................... 78

Complex Rules Govern the Effect of Income on Disability Benefits................................... 81

Harsh Income and Resource Limits Create Barriers to Employment................................... 82

Many New Beneficiaries Who Could Work Delay Employment Out of

Fear of Benefit Loss....................................................................................................... 85

Delays in Accessing Health Insurance and Risk of Losing Health

Insurance Once Obtained............................................................................................... 86

Previous Attempts by Congress and SSA to Impact Income Issues and Incentives................. 87

Efforts to Lessen the Impact of the SGA Cash Cliff ......................................................... 87

Efforts to Allow Increased Asset Development.................................................................... 88

Recommendations for SSA Policy Changes: Income Issues and Incentives............................ 90

Recommendations for Easing the SGA Cash Cliff for DI Beneficiaries.............................. 90

Recommendations for Reducing Restrictions on Assets for SSI Beneficiaries.................... 91

Recommendations for Improving Access to Health Care for DI Beneficiaries.................... 92

Recommendations for Decreasing the Complexity of the DI/SSI Program

Rules Governing Income and Resources ....................................................................... 93

Summary................................................................................................................................... 93

Chapter V: Coordination and Collaboration Among Systems............................................... 95

Introduction............................................................................................................................... 95

Health Care System .................................................................................................................. 98

The Problem.......................................................................................................................... 98

Previous Attempts by Congress and SSA to Impact the Health Care System...................... 99

Vocational Rehabilitation System .......................................................................................... 104

The Problem........................................................................................................................ 104

Previous Attempts by Congress and SSA to Impact the Rehabilitation System ................ 104

Employment and Training System ......................................................................................... 107

The Problem........................................................................................................................ 107

Previous Attempts by Congress and SSA to Impact the Federal Employment

and Training System .................................................................................................... 107

Educational System................................................................................................................. 110

The Problem........................................................................................................................ 111
7

Previous Attempts by Congress and SSA to Impact the Educational System

and Youth..................................................................................................................... 112

Employers, Business Community, and Private Insurance Industry........................................ 115

The Problem........................................................................................................................ 115

Previous Attempts by Congress and SSA to Impact the Employer, Business,

and Private Insurance Systems..................................................................................... 115

Recommendations for SSA Policy Changes........................................................................... 117

Collaborating with the Health Care Systems ...................................................................... 117

Vocational Rehabilitation System....................................................................................... 120

Federal Employment and Training System......................................................................... 121

Educational System............................................................................................................. 122

Employers, Business Community, and Private Insurance Industry.................................... 124

Summary................................................................................................................................. 126

Chapter VI: Summary of Findings and Recommendations ................................................. 127

Research Question 1 ............................................................................................................... 127

Research Question 2 ............................................................................................................... 129

Research Question 3 ............................................................................................................... 130

Research Question 4 ............................................................................................................... 132

Beneficiary Perspective and Self-Direction............................................................................ 134

Customer Service ................................................................................................................ 134

Ticket to Work Program ..................................................................................................... 134

Facilitating Beneficiary Choice .......................................................................................... 135

Reducing SSA Overpayments to Beneficiaries .................................................................. 135

Eliminating the Marriage Penalty ....................................................................................... 135

Income Issues and Incentives ................................................................................................. 136

Easing the SGA Cash Cliff for DI Beneficiaries ................................................................ 136

Reducing Restrictions on Assets for SSI Beneficiaries ...................................................... 136

Decreasing the Complexity of the DI/SSI Program Rules Governing Income

and Resources .............................................................................................................. 136

Coordination and Collaboration Among Multiple Public and Private Systems ..................... 137

Health Care System............................................................................................................. 137

Vocational Rehabilitation System....................................................................................... 137

Federal Employment and Training System......................................................................... 138

Educational System............................................................................................................. 138

Employers, Business Community, and Private Insurance Industry.................................... 139

References.................................................................................................................................. 141

Appendix A: Methodology ....................................................................................................... 151

Appendix B: Results of Literature Review to Identify Evidence-Based Practices ............. 161

Appendix C: Mission of the National Council on Disability................................................. 197
8
9

Executive Summary

Americans with disabilities remain underemployed, despite the fact that many are willing and

able to work. Although the Social Security Administration (SSA) has instituted a number of

incentives to reduce the numerous obstacles to employment faced by its Supplemental Security

Income (SSI) and Social Security Disability Insurance (DI) beneficiaries, such efforts have had

little impact because few beneficiaries are aware of these incentives and how they affect benefits

and access to health care.

Introduction to the Problem

Social Security beneficiaries with disabilities must spend months or even years convincing SSA

that they are unable to work as a condition of eligibility. Yet, upon their receipt of benefits, SSA

begins to communicate to beneficiaries that work is an expectation for them. Congress and SSA

have developed a variety of work incentives and special programs designed to encourage

beneficiaries to attempt to obtain and sustain employment. Yet SSAs efforts to eliminate work

disincentives have often added to the complexity of the entire program, confusing beneficiaries

and making them leery of any actions that might unknowingly jeopardize their benefits.

Current SSA benefit amounts are quite small and merely allow beneficiaries to live at a basic

subsistence level. SSI resource limits make it very difficult to accumulate the financial resources

necessary to move toward economic self-sufficiency. Tying eligibility for Medicaid or Medicare

to eligibility for SSA benefits forces individuals with high-cost medical needs who could

otherwise work to choose between pursuing a career and retaining the medical insurance that

sustains their very lives.

The fear of losing benefits and medical insurance through an unsuccessful employment attempt

starts well before adulthood with SSI beneficiaries. Many SSI recipients first apply for benefits

as children while enrolled in public schools. These individuals often remain on the rolls well into

adulthood, with very few transitioning from high school into substantial employment after

graduation (GAO, 1996b; GAO, 1998b). Failure to focus on Social Security and other public
10

benefits during transition is not only a missed opportunity, but harm may be caused when

students and family members are not educated or prepared for the effect of earnings on cash

benefits and medical insurance (Miller and OMara, 2003).

There is also the problem with poor educational attainment of DI beneficiaries who enter the

disability system later in life. Efforts to help this population return to work are stymied by

their lack of education and marketable job skills  particularly in todays highly competitive

information economy. It is now more important than ever that people of all ages have access

to higher education and the financial means with which to pay for training and education

(Moore, 2003).

Response of Congress and the Social Security Administration to the Problem

Well aware of the enormity and seeming intractability of this problem, Congress and SSA have

initiated multiple efforts to promote employment and return to work among SSA beneficiaries. In

recent years, a number of work incentives for SSI and DI beneficiaries have been implemented,

allowing individuals to keep more of their earnings while retaining their benefits. Work

incentives are aimed at reducing the risks and costs associated with the loss of benefit support

and medical services as a result of returning to work. Some of the most commonly used

incentives are Section 1619(a) and (b) provisions; impairment-related work expenses (IRWE);

trial work period (TWP); Plan for Achieving Self-Support (PASS); extended period of eligibility

(EPE); and continued payment under a vocational rehabilitation program.

However, despite efforts by SSA and the Federal Government that have led to more favorable

conditions for returning to work, most SSI and DI beneficiaries continue to stay on the disability

rolls. The work incentives offered by SSA remain largely underutilized; in March 2000, of the

total number of eligible working beneficiaries, only 0.3 percent were using PASS, 2.8 percent

were using IRWEs, 7.5 percent were receiving Section 1619(a) cash benefits, and 20.4 percent

were receiving Section 1619(b) extended Medicare coverage (SSA, 2000). The major reasons

cited for the extreme underutilization of these work incentives by beneficiaries were (1) few

beneficiaries knew that the work incentives existed, and (2) those who were aware of the
11

incentives thought they were complex, difficult to understand, and of limited use when entering

low-paying employment (GAO, 1999).

The Office of Program Development and Research (OPDR) and the Office of Employment

Support Programs (OESP) under the Deputy Commissioner for Disability and Income Security

Programs are primarily responsible for the implementation of multiple components of the Ticket

to Work and Work Incentives Improvement Act of 1999 (TWWIIA). The TWWIIA provides a

number of new program opportunities and work incentives for both SSI and DI beneficiaries,

including the Ticket to Work (TTW) and Self-Sufficiency Program; development of a workincentives support plan through the creation of national network of Benefits Planning,

Assistance, and Outreach (BPAO) programs; and new work incentives, including expedited

reinstatement (EXR) of benefits and postponement of continuing disability reviews.

The National Council on Disabilitys Study of the Problem

It is not known whether the new TWWIIA programs will have any more success than past

attempts by SSA to impact the employment rate and earnings of beneficiaries. What is clear is

that there has not been, in recent times, a comprehensive, research-based examination of the

practices that are most likely to support the employment of SSI and DI beneficiaries. This study

has been undertaken in response to the need for such a comprehensive analysis. The study was

designed to address four research questions:

(1) What are the evidence-based practices that promote the return to work of working-age

beneficiaries of DI and SSI programs?

(2) What policy changes are needed, given recent trends in program participation and

employment?

(3) Are there proven and documented practices that work better for some populations of people

with disabilities and not others?

(4) Which factors ensure that documented and evidence-based practices could be adapted/

adopted by SSA and other entities that seek to ensure the employment of people with

disabilities? Which factors prevent adaptation/adoption?
12

A four-step approach was taken to implement the study. First, a comprehensive literature

synthesis was completed through a review of published and unpublished literature. Second,

detailed structured interviews were conducted with key stakeholders, including SSA

beneficiaries, federal SSA officials, representatives of other federal agencies, consumer and

advocacy organizations, service organizations, community service providers, and business

representatives. Third, a preliminary list of findings, evidence-based practices, and

recommendations based on the literature review and structured interviews was used to develop

seven topic papers. These papers were used to facilitate discussion and obtain reaction from

participants who were invited to a consensus-building conference at the end of January 2005.

Individuals with disabilities (including current and former SSI and DI beneficiaries), advocacy

organizations, service providers, and policymakers who attended the conference had the

opportunity to further develop the recommendations that appear throughout the report.

Major Findings of the Study

Purpose and Mission of SSAs Disability Benefit Programs

Our nations current disability benefit programs are based on a policy principle that assumes that

the presence of a significant disability and lack of substantial earnings equates to a complete

inability to work. The current SSA eligibility determination process thwarts return-to-work

efforts, because applicants are required to demonstrate a complete inability to engage in

substantial gainful activity (SGA) in order to qualify for benefits. The definition fails to

recognize that, for many consumers, disability is a dynamic condition. The length of the

application process in our current programs actually contributes to the ineffectiveness of our

return-to-work efforts and our inability to intervene early in the disability process.

For DI individuals, lack of a gradual reduction in benefits as earnings increase and lack of

attachment to the DI and Medicare programs after an individual has maintained employment for

an extended period of time make return to work unfeasible. For SSI beneficiaries, the programs

stringent asset limitations thwart efforts toward asset development and economic selfsufficiency. Inconsistencies in program provisions lead to confusion and inequities for

beneficiaries of both programs.
13

Beneficiary Perspective and Self-Direction

To receive benefits, applicants must characterize their situation as an inability to work long-term.

They must demonstrate that they are unable to work in any significant way. Once they are

determined to be eligible for disability benefits, beneficiaries face a host of complex program

rules and policies related to continuing eligibility for cash benefits and access to health care.

Many beneficiaries are confused or uninformed about the impact of return to work on their life

situation and have shied away from opportunities to become self-sufficient through work.

Beneficiaries report that their experience with SSA is often unfavorable. Insufficient staffing has led

to long lines and poor services. Misinformation is frequent, and mistrust common. Local SSA field

office staff members are overburdened with accurate and timely processing of post-entitlement

earnings reporting, which often leads to overpayments to beneficiaries. Beneficiaries do not trust

SSA to make appropriate and timely decisions. There is prevalent fear that work attempts would

result in either a determination that the disability had ended or the need to repay benefits.

SSA has implemented many legislative changes, program modifications, training initiatives, and

automation efforts in the past 15 years to improve its customer service. Although efforts to

streamline processing and improve customer service should be lauded, they have not

significantly improved beneficiaries ability to direct and control their own careers.

Income Issues and Incentives

A multitude of rules regarding employment income, continued eligibility for disability benefits,

waiting periods, earnings reporting, management of benefit payments, and management of assets

(among many others) come into play once an individual is determined to be eligible for DI or

SSI. SSA rules regarding employment and income are such that many beneficiaries will actually

be worse off financially if they work full time. Disincentives to employment in the current

benefits programs include a sudden loss of cash benefits as a result of earnings above the SGA

level for DI beneficiaries. Despite a number of programs that are designed to encourage asset

building among SSI beneficiaries, it remains very difficult for beneficiaries to save and
14

accumulate resources under SSI, which contributes to long-term impoverishment and

dependence on public benefits.

Over the past decade, SSA has devoted considerable resources to promoting employment and

return to work among SSI and DI beneficiaries. The agency has aggressively implemented a

number of new initiatives authorized under the TWWIIA, such as the Ticket to Work and SelfSufficiency Program, the BPAO program, area work incentive coordinators, and Protection and

Advocacy for Beneficiaries of Social Security. It has modified program rules to provide

increased work incentives to beneficiaries, such as the EXR and protection from continuing

disability review provisions of TWWIIA, indexing the SGA threshold, and increasing the level

of earnings allowed during the Trial Work Period (TWP). The agency has also launched or is

planning to initiate a number of demonstrations that will test the efficacy of new modifications to

work incentives within the DI program and services targeted toward youth with disabilities. Yet,

while SSA has taken steps to improve its return-to-work services through the provision of work

incentives, these efforts are hampered by the underlying program rules that were designed for

individuals assumed to be permanently retired from the workforce and individuals who were

viewed as unable or unlikely to work in the future.

Coordination and Collaboration Among Systems

Expansion of the disability programs and the poor employment rates of adults with disabilities

have become major concerns for SSA and disability policymakers across the country. Too often,

the alarming growth of the Social Security disability rolls has been represented and perceived as

SSAs problem to solve in isolation, when in fact it is a larger societal problem with myriad

complex causes. Receipt of Social Security disability benefits is merely the last stop on a long

journey that many people with disabilities make from the point of disability onset to the point at

which disability is so severe that work is not possible. All along this journey, individuals

encounter the policies and practices of the other systems involved in disability and employment

issues. When these systems fail to stem the progression of disability or work at cross-purposes

with one another to prevent successful employment retention or return to work, it is the Social

Security disability system that bears the eventual brunt of this failure. Any meaningful effort to

slow down or reverse this relentless march toward federal disability benefits will require
15

significant and sustained collaboration and coordination among SSA and the other federal

agencies with a stake in developing disability and employment policy.

The complex obstacles to employment faced by SSA beneficiaries require a comprehensive set

of solutions. New approaches must be identified that emphasize beneficiary control of career

planning and the ability to access self-selected services and supports. Public and private health

care providers must develop new collaborations and new approaches to combining coverage

from multiple sources to improve program efficiencies. SSA must continue to work with the

Rehabilitation Services Administration (RSA) and the Department of Labor (DOL) to improve

implementation of the TTW program and identify new approaches that will overcome the

traditional inability of SSA beneficiaries to benefit from services provided by the nations

employment and training programs. Secondary and postsecondary educational institutions must

emphasize benefits counseling and financial management training as the foundation for

beneficiary self-direction and economic self-sufficiency. Federal agencies and the business

community must realize that collaborative approaches to incorporating beneficiaries into the

workforce are needed as a way to reduce dependence on federal benefits while simultaneously

enhancing the productivity and competitiveness of large and small business.

Recommendations

A total of 38 specific recommendations have been developed in the areas of Beneficiary

Perspective and Self-Direction, Income Issues and Incentives, and Coordination and

Collaboration Among Multiple Public and Private Systems. The recommendations are presented

and justified in Chapters III, IV, and V of the report, and a complete list is provided in Chapter

VI. The key recommendations resulting from the study are summarized below.

Beneficiary Perspective and Self-Direction

Customer Service  SSA should take immediate steps to improve the services provided to

beneficiaries by improving the accessibility of SSA field offices and Web sites; redesigning field

office personnel roles, staffing patterns and work assignments; continuing efforts to automate

work reporting procedures; and enhancing outreach efforts to beneficiaries.
16

Ticket to Work Program  Congress and SSA should address current shortcomings in the TTW

program by (1) expanding Ticket eligibility to include beneficiaries whose conditions are

expected to improve and who have not had at least one continuing disability review (CDR),

childhood SSI beneficiaries who have attained age 18 but who have not had a redetermination

under the adult disability standard, and beneficiaries who have not attained age 18; (2) modifying

the TTW regulations to ensure that Ticket assignment practices do not violate the voluntary

nature of the program and beneficiary rights to grant informed consent; and (3) implementing a

strong national marketing program to inform beneficiaries about TTW and other SSA programs.

Facilitate Beneficiary Choice  Congress should authorize and direct SSA, the Rehabilitation

Services Administration (RSA), the Centers for Medicare and Medicaid Services (CMS), the

Department of Housing and Urban Development (HUD), and the Department of Labor

Employment and Training Administration (DOLETA) to develop and implement an integrated

benefits planning and assistance program that coordinates resources and oversight across

several agencies that enables beneficiaries to access benefit planning services within multiple

federal systems. Congress should also authorize and direct these agencies to consider changes to

the existing BPAO initiative to improve the accuracy and quality of services provided to

individual beneficiaries.

Reduce SSA Overpayments to Beneficiaries  Congress and SSA should implement a series of

procedural reforms to reduce overpayment to beneficiaries by increasing the use of electronic

quarterly earnings data and automated improvements to expedite the processing of work activity

and earnings; piloting the creation of centralized work CDR processing in cadres similar to

PASS and Special Disability Workload Cadres; and enhancing efforts to educate beneficiaries on

reporting requirements, the impact of wages on benefits, and available work incentives.

Eliminate the Marriage Penalty  Congress and SSA should undertake a complete review of

the SSI program and make program modifications that eliminate the financial disincentive to

marriage inherent in the present program, including amending the current Title XVI disability

legislation to modify the manner in which 1619(b) eligibility is applied to eligible couples.
17

Income Issues and Incentives

Ease the SGA Cash Cliff for DI Beneficiaries  Congress should modify the current Title II

disability legislation to eliminate SGA as a post-entitlement consideration for continued

eligibility for Title II disability benefits and provide for a gradual reduction in DI cash benefits

based on increases in earned income.

Reduce Restrictions on Assets for SSI Beneficiaries  Congress should direct SSA to (1)

develop and test program additions and regulatory modifications that will enable SSI beneficiaries

to accumulate assets beyond existing limits through protected accounts and other savings

programs, and (2) change current program rules and work with other federal agencies to modify

and expand the value of individual development account (IDA) programs to SSA beneficiaries.

Decrease the Complexity of the DI/SSI Program Rules Governing Income and Resources 

Congress should direct SSA to (1) simplify regulatory earnings definitions and wage verification

processes so that they are consistent across the SSI and DI programs, and (2) direct SSA to

modify regulations related to the treatment of earnings in the DI program by applying the same

rules currently applied in the SSI program.

Coordination and Collaboration Among Multiple Public and Private Systems

Health Care Systems  Centers for Medicare and Medicaid Services (CMS) and SSA should

work together closely to (1) modify existing program regulations in order to uncouple Medicare

and Medicaid coverage from DI/SSI cash payments; (2) identify and eliminate the many

employment disincentives currently built into the Medicaid waiver, Medicaid buy-in, and Health

Insurance Premium Payment (HIPP) programs; (3) expand benefits counseling services to

include the full range of financial education and advisement services; and (4) work

collaboratively with public and private insurance providers and business representatives to

design public-private insurance partnerships that will expand access to health care for individuals

with disabilities.
18

Vocational Rehabilitation (VR) System  SSA should modify TTW program regulations to

allow the SSAs traditional VR cost reimbursement program to carry on as a parallel program to

the Employment Network (EN) outcome or outcome-milestone payment mechanisms, and ensure

that an EN is able to accept Ticket assignment from a beneficiary, refer that individual to the VR

agency for needed services, and not be required to reimburse the VR agency for those services.

Federal Employment and Training System  Congress, SSA, and the Department of Labor

should undertake an analysis of the impact of allowing DOL One-Stop Career Centers to receive

cost reimbursement payments for successfully serving beneficiaries under the TTW program,

evaluate the impact of the Workforce Investment Act (WIA) performance standards on

beneficiary participation in WIA programs, and design and test a set of waivers that will assist

beneficiaries in accessing and benefiting from WIA core and intensive services, as well as

individual training accounts.

Educational System  Congress should direct SSA to work with the Department of Education

(ED) to (1) ensure that benefits planning and financial management services are available to the

transition-aged population; (2) expand the current student earned income exclusion (SEIE) and

the Plan for Achieving Self-Support (PASS) to encourage involvement of SSA beneficiaries in

postsecondary education and training; and (3) implement a policy change that would disregard

all earned income and asset accumulation limits for beneficiaries who are transitioning from

secondary education to postsecondary education or employment for at least one year after

education or training is completed.

Employers, Business Community, and Private Insurance Industry  Congress should direct

SSA and the Department of the Treasury to (1) evaluate the possible effects of a disabled person

tax credit as a means of increasing the use of disability management programs in business to

prevent progression of injured and disabled workers onto the public disability rolls, and (2)

collaborate with Department of Labors Employment and Training Administration (DOLETA),

the Small Business Administration (SBA), and the Rehabilitation Services Administration

(RSA) to develop and implement an employer outreach program targeted toward small and midsize businesses.
19

Chapter I: Introduction

Overview of the SSDI and SSI Programs

The long-debated concept of social insurance for persons with disabilities was first set into action

by the Social Security Amendments of 1956, with the establishment of the Social Security

Disability Insurance (SSDI) program. Since its original enactment, SSDI (referred to in this

report as DI) has been examined and modified repeatedly over the decades. In the beginning,

monthly disability benefits were provided only for disability-insured workers between the ages

of 50 and 65 who had an inability to engage in any substantial gainful activity by reason of any

medically determinable physical or mental impairment which can be expected to result in death

or to be of long-continued and indefinite duration and for children of retired or deceased insured

workers who developed a disability before the age of 18. There was a six-month waiting period

from the end of work until the beginning of DI benefit payments (SSA, 1986).

Over the course of the next few years, legislation was enacted to make various amendments to the

DI program, many of which increased both eligibility for disability benefits and benefit levels. The

1957 regulations added the consideration of nonmedical factors to the evaluation of disability,

including education, training, and work experience. The Social Security Amendments of 1958

expanded DI to include benefits for the dependents of workers with disabilities. In 1960, the

minimum age requirement of 50 years was removed for DI beneficiaries. That same year, a ninemonth trial work period was established, allowing beneficiaries to test their ability to gain

employment without losing their benefits. The Social Security Amendments of 1965 replaced the

requirement that the impairment be of long-continued and indefinite duration with the condition

that it was expected to last for a continuous period of not less than 12 months (SSA, 1986).

Such changes led to an increasing public awareness of DI, along with significant growth in both

the size and complexity of the program. As a result, the Social Security Amendments of 1967

were passed to clarify that a claimant may only be found to have a disability if his physical or

mental impairment or impairments are of such severity that he is not only unable to do his

previous work but cannot, considering his age, education, and work experience, engage in any
20

other kind of substantial gainful work which exists in the national economy, regardless of

whether such work exists in the immediate area in which he lives, or whether a specific job

vacancy exists for him, or whether he would be hired if he applied for work. The Social

Security Amendments of 1972 brought additional changes to DI, including a reduction in the

waiting period to begin benefit payments from six to five months, and an extension of the

definition of adult children with disabilities to those whose condition developed before age 22

(SSA, 1986).

The most momentous aspect of the 1972 Amendments was the creation of the Supplemental

Security Income (SSI) program, which replaced various state programs of public assistance

effective January 1, 1974. In contrast to DI, eligibility for SSI payments was needs-based and

was available to individuals who had attained age 65 or who had a disability with little income

and few resources, regardless of their work history, to ensure that they were afforded a minimum

level of monthly income to meet expenses. SSI operated under the same definition of disability

used for DI benefits, with a modification for SSI claimants under age 18. Other provisions

applicable to DI were incorporated into the new program as well, including the nine-month trial

work period and the suspension of benefit payments upon refusal to accept rehabilitation

services. Medicare and Medicaid protection for Social Security disability recipients were also

provided for the first time as a result of the 1972 Amendments (SSA, 1986).

The number of people on the disability rolls and the costs of both the DI and SSI programs

increased substantially during the 1970s. Between 1970 and 1978, the number of workers on the

DI rolls nearly doubled, and expenditures quadrupled. It was widely believed that factors such as

high unemployment rates, changing attitudes toward disability, high benefit levels for

beneficiaries who did not work, and inadequate administrative control were collectively

responsible for such unprecedented growth. Consequently, a number of proposals for disability

reform legislation were introduced in Congress in the latter half of the decade with the intent of

removing the work disincentives that were purportedly built into the disability program, as well

as improving program administration (SSA, 1986).
21

To that end, the Social Security Disability Amendments of 1980 included changes to the DI

benefit structure and procedures for strengthening incentives for rehabilitation and return to

work. A cap was placed on the benefits that could be paid to DI beneficiaries and their families,

to prevent excessive replacement rates from discouraging employment. In addition, work

incentives were augmented in both DI and SSI, and those who completed the nine-month trial

work period were now provided with an additional 15-month period during which they could test

their ability to maintain employment while retaining disability status, with benefits automatically

reinstated in the event that the work attempt failed. Furthermore, impairment-related work

expenses incurred by the individual were no longer counted when determining whether earnings

could be counted as substantial gainful activity (SGA) (SSA, 1986).

In passing the 1980 legislation, Congress also aimed to strengthen federal management of the

state disability determination process, eliminating the current system of individual state

agreements in order to ensure more efficient and consistent administration of the disability

programs throughout the nation. Furthermore, in an effort to maintain the integrity of the

disability programs, Congress approved a requirement that the status of all disability

beneficiaries be reviewed at least once every three years to assess their continuing eligibility for

benefits. Prior to this highly contested change, such continuing disability reviews (CDRs) were

only conducted in selected cases where the individuals condition was expected to improve, or

where the individual had returned to work. Consequently, the Social Security Administration

(SSA) found nearly one in two people reviewed ineligible for benefits, and for many of these

people, benefits were terminated. Shortly thereafter, numerous hearings were held regarding the

effect the controversial CDRs and subsequent terminations were having on beneficiaries, as well

as concerns regarding the standards applied in evaluating disability (SSA, 1986).

In response, the Social Security Disability Benefits Reform Act of 1984 set forth a new standard

of review for the termination of disability benefits, making it more difficult to terminate a

beneficiary by requiring substantial evidence that an individuals impairments had medically

improved to the point where he or she could now perform substantial gainful activity.

Furthermore, the Act specified that in determining eligibility, the collective effect of all of an

individuals impairments must now be taken into account, even if no single impairment qualified
22

as severe. In addition to providing explicit standards of disability review, the 1984 legislation

had the goals of improving the accuracy and the nationwide uniformity of decisions in disability

programs, and returning disability policymaking to federal legislators. Thus, this Act was viewed

as corrective or remedial rather than driven by reform.

In the past two decades, continued progress has gradually been made toward increasing the

availability of work incentives and return-to-work services for disability recipients, carried out

within the context of the broader disability policy climate aimed at expanding the vocational and

social prospects of persons with disabilities. Given the contradictions inherent in providing

vocational services to a population of individuals who have already been required to demonstrate

an inability to work in order to qualify for disability insurance, the ultimate effectiveness of such

employment-focused endeavors within the current Social Security system is frequently regarded

with skepticism.

Determining Eligibility for DI and SSI

Under both the Social Security (Title II) and SSI (Title XVI) programs, there are two sets of

requirements that must be satisfied before entitlement: (1) does the individual meet the eligibility

criteria other than disability, and (2) does the person meet the disability standard? When

applying for benefits, potential beneficiaries must prove the former to SSA. Applicants must

prove their age, relationship to the person who paid into the Social Security system, marital

status, work history, and, for SSI, their income and resources.

The other determination, that of disability status, is made by contracted state agencies (20 CFR

404.1503). The disability determination process is complex and lengthy. There is inconsistency

from state agency to state agency (GAO, 2004a), and determinations that an individual is not

disabled are often appealed, leading to lengthy waits before final resolution. For example, a table

from the SSA Annual Statistical Report for 2003 (SSA, 2004a) offers data on the outcomes of

applications filed between 1992 and 2003. According to that data, 22,062 applications from 2000

were still pending in mid-2003.
23

Successful applicants for benefits receive one of four types of disability payments administered

by SSA. The largest program, DI, is authorized by Title II of the Social Security Act. It is paid to

former workers who contributed Social Security taxes on work income. The other two disability

programs under Title II of the Social Security Act are Disabled Widow(er)s Benefits (DWB) and

Childhood Disability Benefits (CDB). These are paid to the survivors or dependents of workers

who paid Social Security taxes and then died, became disabled, or retired from the workforce.

The fourth disability program, SSI, is a federal poverty program for individuals who are over age

65, blind, or disabled; it is authorized by Title XVI of the Social Security Act. All four programs

use the same definition of disability, which follows:

(a) the law defines disability as the inability to do any substantial gainful activity

by reason of any medically determinable physical or mental impairment which

can be expected to result in death or which has lasted or can be expected to last

for a continuous period of not less than 12 months. To meet this definition, you

must have a severe impairment(s) that makes you unable to do your past relevant

work (see §404.1560(b)) or any other substantial gainful work that exists in the

national economy (20 CFR 404.1503).

Currently, substantial gainful activity is work effort valued above $1,380 per month for blind

individuals, and valued above $830 per month for beneficiaries who are not blind (2005 limits).

The word valued refers to a host of complex work incentives that are used to trim the amount

of gross wages earned in a month down to the amount considered to be countable earnings.

The countable earnings are then compared to the financial guidelines for substantial gainful

activity (SGA) stated above.

SSI and the Social Security disability programs authorized under Title II of the Social Security

Act (DI, CDB, and DWB) are currently the largest federal programs providing cash payments to

people with disabilities. In 2002, about 6.5 million persons received Social Security benefits

based on disability. This represented an increase from 6.2 million beneficiaries in 2001. In

addition, nearly 4.8 million adults and children received SSI due to blindness or disability. The

number of blind or disabled adults ages 18 to 64 rose by 1.7 percent between December 2001

and December 2002, while the number under age 18 increased by 3.7 percent. Benefit payments

from the DI trust fund increased by 10.2 percent, from $59.6 billion in 2001 to $65.7 billion in

2002. Total SSI payments were $34.6 billion in 2002, up 4.6 percent from 2001 (SSA, 2004b).
24

The steady growth pattern of the DI and SSI rolls seen in the past few years is not a new

phenomenon. As early as 1994, the Government Accounting Office (GAO), now called the

Government Accountability Office, was investigating the growth in Social Securitys disability

programs. In a study released in February 1994, the GAO reported that in the three years

between 1989 and 1992, DI applications rose by a third, and almost half the applicants in 1992

succeeded in obtaining benefits. The GAO also found that, once on the rolls, beneficiaries were

staying longer. Between 1985 and 1992, the number of beneficiaries who had been on the rolls

more than 15 years grew by an alarming 93 percent. In addition, while the total number of DI

terminations continues to increase as the rolls swell, termination rates as a percentage of those on

the rolls have steadily declined. Terminations from the DI program averaged approximately 12

percent during the 19881989 period, but stood at only 9.5 percent by 1994. SSA research

concluded that termination rates were declining for three main reasons. First, the younger

average age of beneficiaries over the past 1015 years has led to a lower number of conversions

to retirement and terminations due to death. Second, the decline in the number and rate of

medical CDRs has been a significant problem (SSA, 1996). Finally, terminations from the

disability programs due to employment are almost nonexistent. SSA statistics cited in a 1998

GAO report estimate that fewer than 1 in every 500 DI beneficiaries left the rolls by returning to

work (GAO, 1998).

Considering the prevalence of poverty among beneficiaries of DI and SSI benefits, it was not

surprising that, according to a 1994 Harris poll conducted for the National Organization on

Disability, 79 percent of individuals who had a disability stated that they wanted to work.

Although the criteria defining disability were far less stringent than those used by SSA, the poll

still strongly indicated that people with disabilities wanted to work. Unfortunately, a very small

number of individuals receiving benefits, consistently less than one-half of 1 percent,

successfully left the benefit roles through work (SSA, 1999).

Overview of the Problem

Americans with disabilities remain underemployed, despite the fact that many are willing and able

to work. Although SSA has instituted a number of incentives to reduce the numerous obstacles to

employment faced by its beneficiaries, such efforts have had little impact because few beneficiaries
25

are aware of these incentives and how they affect eligibility and benefits. The variety of complex

issues surrounding disability policy and the provision of long-term disability benefits has been

documented repeatedly. Such issues highlight the need to find adequate solutions that will allow

Americans with disabilities to recognize their unfulfilled potential in the workforce.

Very few beneficiaries ever leave SSA rolls (SSA, 1999; GAO, 1996a; GAO, 1996b;

GAO,1996c). There is a lack of temporary options for cash support, health care, and

rehabilitation within SSA programs, making it very difficult for beneficiaries to gain financial

independence. Ironically, the employment supports that could potentially enable a beneficiary to

remain off the disability rolls by returning to work or entering the workforce are not available

until after a lengthy determination procedure has been completed, at which point the individual

has essentially proved that he or she is unable to work. Indeed, less than one-half of 1 percent of

SSI and DI beneficiaries leave the rolls to obtain employment (SSA, 1999; GAO, 1996c).

The problems are well-known and thoroughly documented. Medical advances save lives but

increase the number of individuals with functional limitations to a degree that it makes it difficult

for them to obtain and maintain employment. Societal and employer attitudes, cyclical fluctuations

in the economy, and rapidly changing workplace demands in our information age economy lead to

discriminatory practices that arbitrarily, unnecessarily, and sometimes illegally exclude individuals

from the workforce. Employers and insurance companies frequently and knowingly design policies

and programs that shift the cost of rehabilitating injured workers to public programs. Many of these

programs simply pay individuals to remain in a dependent, unemployed status without making any

authentic attempt to provide them with the simple services and supports that would enable them to

reenter employment and pursue their chosen careers.

The situation for individuals with lifelong disabilities is equally bleak. Special educators,

physicians, and clinicians of all types bombard students and their families with misinformation

regarding the effect of disability on their long-term employment opportunities. Over time, these

myths create unwarranted low expectations that prevent children and adolescents with

disabilities from viewing themselves as able workers who can dream about their future careers

with excitement and hope. Special education programs and secondary schools fail to prepare
26

students to obtain and succeed in complex jobs in the local economy. The system forces

students and their families to pursue SSI eligibility as the only path by which they can secure

post-school access to employment and residential supports through the home and communitybased waiver program, which by definition perpetuates the notion that these otherwise capable

individuals are frail, dependent, and unable to maintaining even basic employment.

Even the very programs that are purported to assist individuals with disabilities who are

temporarily unable to work often place these individuals in a cycle of dependence. Current

benefit amounts merely allow individuals to live at a basic subsistence level, never acquiring

enough resources to allow them to pursue occupational or educational goals, and even

economically punishing individuals who attempt to earn or save. Tying eligibility for Medicaid

or Medicare to eligibility for SSA benefits forces individuals with high-cost medical needs who

could otherwise work to choose between pursuing a career and retaining the medical insurance

that sustains their very lives. The ponderous complexity of post-entitlement rules and work

incentives has forced Congress and SSA to create a large cadre of benefits specialists whose job

is to explain to beneficiaries the otherwise incomprehensible rules and regulations that actually

exist to facilitate their entry into employment while they receive benefits.

The disability determination process is upsetting, adversarial, and extremely inconsistent.

Both the timeliness and the uniformity of SSAs disability determination process leave much to

be desired. Decisions often take an extremely long time to process, and individuals who appeal

after initially being denied benefits often have to wait nearly another full year before a final

hearing decision is reached. Furthermore, there are often significant discrepancies between the

initial decisions and those made at the hearings level (GAO, 2004a).

The culture of SSA is not work-friendly. Individuals must spend months or even years

convincing SSA that they are unable to work as a condition of eligibility, yet upon receipt of

benefits, SSA does a complete about-face and begins to communicate to beneficiaries that work

is an expectation for them. Those individuals who do choose to work are frequently penalized.

Individuals who obtain employment and conscientiously report their earnings to SSA frequently

continue to receive benefits because SSA simply does not devote the resources necessary to track
27

reported earnings and make timely modifications to beneficiary payments. The resulting

overpayments create a terrible burden on individuals and frequently on their families, and lead

individuals who could otherwise work to remain unemployed to avoid the economic hardship

created by overpayments. Benefit overpayments typically lead both to substantial administrative

and financial burdens for SSA and to frustration and possible sudden termination of benefit

eligibility for beneficiaries. Although recent efforts by SSA have been undertaken to address this

issue, numerous challenges remain (Livermore, 2003).

Beneficiaries who attempt to work may actually be threatening their program eligibility

and health care. Individuals with very significant disabilities who may wish to make an initial

work attempt believe that working even a few hours each week on a trial basis might lead to SSA

initiating a CDR that could jeopardize their benefit payments before they have had a chance to

establish a stable employment situation. Even transition-aged beneficiaries fear that working

while in high school may jeopardize their ability to retain SSI benefits after their age 18

redetermination. Their sincere efforts to prepare for employment after exiting school may

actually lead them to be denied the very services and supports that would make employment

possible for them. In short, SSA policies seem to communicate to beneficiaries that if they

attempt to work and are successful in this effort, somehow they should not have been eligible for

benefits in the first place, thereby creating a culture of mistrust and suspicion.

Response of Congress and the Social Security Administration to the Problem

Well aware of the enormity and seeming intractability of this problem, Congress and SSA have

initiated multiple efforts to promote employment and return to work among SSA beneficiaries.

SSA established the Office of Employment Support Programs (OESP) in the Office of Disability

to coordinate employment and return-to-work efforts. In recent years, OESP and the Office of

Disability have attempted to implement a number of new initiatives to overcome known

problems. They have attempted to revise the traditional SSA vocational reimbursement system,

in which state vocational rehabilitation agencies (SVRAs) seemed to have been given a

monopoly to provide employment services to beneficiaries by establishing the alternative

provider (AP) program. The AP program attempted to increase the involvement of community

provider agencies as a competitor to SVRAs in service delivery for beneficiaries. Unfortunately,
28

participation in the AP program was quite low and the outcomes it generated were disappointing.

The program has since been subsumed within the Ticket to Work program.

State Vocational Rehabilitation Agencies

SSA has a long history of interaction with SVRAs. Since 1981, SSA has reimbursed SVRAs for

services provided to SSA beneficiaries that result in specified employment outcomes. The SSA

Vocational Rehabilitation (VR) reimbursement program replaced an even earlier block grant

program and was designed to improve program outcomes and accountability. Under the VR

reimbursement program, the State Disability Determination Service applied a set of criteria to

individuals awarded SSI or DI benefits. Individuals who appeared to be possible candidates for

rehabilitation were subsequently referred to the SVRA. SSA beneficiaries selected for referral to

the SVRA were required to participate in the VR program or risk benefit suspension. The

program also allowed beneficiaries to apply for VR services on their own.

Under the VR reimbursement program, SSA reimbursed an SVRA for the reasonable and

necessary costs of providing rehabilitation services to an eligible beneficiary. In order for the

SVRA to receive reimbursement, the services must have resulted in the individual obtaining

employment and achieving earnings at or above the SGA level for nine consecutive months.

When an SVRA believed a beneficiary had achieved the earnings criteria, a payment claim was

submitted to SSA. States were reimbursed for the actual costs of providing direct services, and

administrative and tracking costs were reimbursed based on cost formulas. State agencies were

responsible for submitting evidence to SSA to document that the individual had obtained

employment and had earnings exceeding SGA for nine consecutive months.

Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA)

(P.L. 106-170)

TWWIIA was enacted in 1999 to remove barriers and disincentives to employment for persons

with disabilities while increasing consumer control over the delivery of employment and

rehabilitation services and supports. The ultimate objective of this legislation was to provide

Americans with disabilities with more opportunities to engage in employment and achieve
29

increased financial well-being, while at the same time decreasing their dependence on public

benefits. TWWIIA was intended to (1) increase choice for Social Security beneficiaries with

disabilities in selecting and obtaining employment and vocational rehabilitation services and

supports; (2) remove disincentives associated with having to choose between whether to work

or maintain health care coverage; (3) provide a safety net and a mechanism for expedited

reinstatement of benefits; (4) implement safeguards regarding CDRs; and (5) expand work

incentive supports and protection and advocacy services. TWWIIA provides a number of

new program opportunities and work incentives for both SSI and DI beneficiaries, including

the following:

(1) Ticket to Work and Self-Sufficiency Program

(2) Expanded availability of health care services

(3) Expedited reinstatement of benefits

(4) Postponement of continuing disability reviews

(5) Benefits Planning, Assistance, and Outreach Program

The Ticket to Work and Self-Sufficiency Program

The Ticket to Work and Self-Sufficiency Program (TTW) is a voluntary program designed to

allow SSI and DI beneficiaries the opportunity to direct their own employment services and

choose specific services and providers in order to initiate or return to work. It differs from SSAs

traditional vocational rehabilitation reimbursement program, where referrals of beneficiaries and

recipients with disabilities went to either a state vocational rehabilitation agency or alternative

providers. This program is intended to give consumers control over the types of services they

obtain to support them in preparing for or maintaining employment, as well as whom they

choose to provide these services and supports.

To implement the TTW program, SSA awarded a Program Manager contract to MAXIMUS, Inc.

to inform beneficiaries about the program, recruit Employment Networks (ENs), manage Ticket

assignments, resolve disputes among ENs, and manage the payment process. MAXIMUS, Inc.

has devoted extensive resources to recruiting and supporting ENs. An EN is any qualified entity
30

that has entered into an agreement with SSA to assume responsibility for the coordination and

delivery of employment services to beneficiaries who assign their Tickets to that EN. As the

TTW program was originally conceptualized, it was hoped that the TTW program would

encourage the participation of employment and community organizations that have not

traditionally served the SSA population.

State VR agencies must elect to become ENs if they wish to continue to receive reimbursement

from SSA for services provided to beneficiaries. As an alternative to the traditional cost

reimbursement payment system, VR agencies have the option of selecting an EN payment

structure. ENs may choose to serve Ticket holders under an outcome payment structure in which

the ENs receive payments for each month the beneficiary receives no cash benefit, for a period

of up to 60 months, or under a milestone payment structure in which the EN receives periodic

payments as the beneficiary achieves intermediate goals on the way to zero cash benefit.

Expanded Availability of Health Care Services

The majority of Social Security beneficiaries with significant disabilities will not enter the

workforce in full-time positions with medical benefits and therefore face the loss of health care

when their earnings ultimately result in the elimination of their cash benefit. Beneficiaries in the

past often had to choose between working at substantial levels and keeping their health insurance

coverage (Clinton, 1999). The Medicaid buy-in provision of TWWIIA allows states to establish

programs in which individuals with disabilities who work purchase Medicaid services, just as if

they were purchasing health care benefits through an employer-sponsored program. The buy-in

includes several enhancements to the current Medicaid and Medicare programs and removes

some of the disincentives that existed in the past with returning to work.

The Medicaid buy-in was first established in the Balanced Budget Act of 1997 (BBA). Through

BBA provisions, states could provide Medicaid coverage to working individuals with disabilities

who, because of their earnings, could not qualify for Medicaid. The concept of a Medicaid buyin is to provide a choice for SSI and DI recipients to work and continue to be eligible for longterm supports and services. In states that chose the Medicaid buy-in option, individuals in other
31

Medicaid eligibility categories could choose to move to this new eligibility category if they were

working (Scales, Folkemer, and Jensen, 2000).

The Medicaid buy-in option authorized under the BBA was modified and expanded by

TWWIIA. Beginning October 2000, states could cover working individuals between the ages of

16 and 65 who, except for earnings, would be eligible to receive SSI benefits on the basis of

disability. Unlike limitations under the BBA, TWWIIA does not limit eligibility to people whose

incomes are below 250 percent of poverty (Scales, Folkemer, and Jensen, 2000).

Enhanced Work Incentives

TWWIIA also created new work incentives to promote employment opportunities for

beneficiaries. Two of the most important are expedited reinstatement of benefits and

postponement of Continuing Disability Reviews (CDRs). Expedited reinstatement of benefits is

designed to address a major disincentive experienced by many SSI and DI beneficiaries who

return to work, have their cash benefits cease, and then, because of their disability, have to stop

work at a later point in time. Under the expedited reinstatement of benefits provision, if a

persons Social Security benefits have ended because of earnings from work and he or she

becomes unable to work due to disability, he or she may request reinstatement of benefits,

including Medicare and Medicaid, if applicable, without filing a new application. In this case,

beneficiaries must be unable to work because of their medical condition.

An additional disincentive for SSI and DI beneficiaries is the likelihood that work will trigger

CDRs, which are conducted periodically to determine if an individuals medical condition has

improved sufficiently to terminate disability benefits. Under TWWIIA, SSA cannot initiate

CDRs while the beneficiaries are using the Ticket. However, the cash benefits of DI beneficiaries

may be subject to termination if their earnings are above SGA. As of January 1, 2002, DI

beneficiaries who have been receiving benefits for at least 24 months have not been asked to go

through a disability review because of the work they are doing. However, regularly scheduled

medical reviews set by the Disability Determination Service could still be performed and

benefits could be terminated if earnings are above SGA (SSA, 2000).
32

SSAs Work Incentives Support Plan

SSA has developed several programs designed to enable beneficiaries to make informed choices

about work. One program, the area work incentive coordinators (AWIC), created a new position

internal to the agency. The other two programs, Protection and Advocacy for Beneficiaries of

Social Security (PABSS) and Benefits Planning, Assistance, and Outreach (BPAO), provide

services through agencies and organizations outside the agency. The purpose of these combined

programs is to provide work incentive planning and assistance to SSA beneficiaries, conduct

outreach efforts to beneficiaries who may be eligible for various SSA programs, and provide

advocacy services for individuals participating in SSA programs. Each of these programs is

briefly described below.

Benefits Planning, Assistance, and Outreach Program. In response to the underutilization of

available work incentives, TWWIIA established a community-based work incentives planning

and assistance program designed to disseminate accurate information about work incentives to

Social Security beneficiaries while providing them with more choices. SSA has established a

program of cooperative agreements and contracts to provide benefits planning and assistance to

all Social Security disability beneficiaries, including information about the availability of

protection and advocacy services. BPAO increases opportunities for beneficiaries to receive the

information and services they need to become employed and possibly attain self-sufficiency.

TWWIIA directed SSA to establish community-based planning, assistance, and outreach

programs designed to provide accurate information and assistance on benefit programs and work

incentives to SSA beneficiaries. To accomplish this goal, SSA established a program of

cooperative agreements with BPAO entities across the United States. The BPAOs provide

information and support in the following areas (Brooke, 2002):

Information and referral  provide basic information in response to inquiries about all

federal and state benefit programs, and/or referral to government agencies and other

community resources.

Problem solving and advocacy  solve specific federal and state benefit and work incentive

issues. This may involve advocating on behalf of beneficiaries with other agencies.
33

Benefits analysis and advisement  provide assessment of real or potential effects of

employment or similar changes that will impact beneficiaries overall financial well-being,

and inform them of various options available and the projected outcome of each.

Benefits support planning  provide direct assistance in the construction of a plan to promote

effective monitoring and management of beneficiaries benefit programs and work incentives.

Benefits management  provide benefit monitoring and management assistance to recipients

who are likely to experience employment, benefits, or other changes that will affect their

benefit status, health care, or overall financial well-being.

Approximately half of all individuals served by BPAOs are DI beneficiaries, approximately onethird are SSI beneficiaries, and the remainder are concurrent beneficiaries. Over 85 percent of

those individuals were either employed or seeking employment. Approximately 20 percent of

individuals receiving services from BPAOs express an interest in assigning their Tickets to an

EN (Virginia Commonwealth University, 2005).

SSA Area Work Incentive Coordinators. SSA initially created the position of employment

support representative (ESR) to provide an internal source of knowledge and support for field

office personnel regarding work incentives and SSA employment-related activities. After

implementing a pilot ESR program, SSA concluded that a better approach to delivering this

function would be through the creation of a new full-time position, the area work incentive

coordinator (AWIC). A key difference between the ESR and the AWIC is that the ESRs

dedicated 100 percent of their time to work incentive and employment activities. The AWIC is

under the supervision of the SSA area director and may be assigned other duties in addition to

work-related responsibilities. AWICs coordinate with BPAO benefits specialists, work

incentives liaisons (WIL), and other personnel to provide improved services and information on

SSAs employment support programs to beneficiaries who want to begin or maintain

employment. The responsibilities of AWICs include coordinating local public outreach efforts on

work incentives, overseeing training for personnel at local Social Security offices on SSAs

employment support programs, handling sensitive or high-profile disability work-issue cases

when appropriate, and monitoring local disability work-issue workloads (SSA, 2004c).
34

PABSS. The Protection and Advocacy for Beneficiaries of Social Security (PABSS) program is

administered by SSA through direct grants to each state-designated protection and advocacy

agency. These grants are made for two specific purposes: (1) to provide information and advice

about obtaining VR and employment services, and (2) to provide advocacy or other services that

a beneficiary needs to secure or regain gainful employment. PABSS is a relatively small program

designed to complement and supplement existing protection and advocacy (P&A) programs

rather than to create a large new program structure. The program provides P&A services to all

eligible SSA beneficiaries and makes available dispute resolution services under TTW. Recent

changes have enabled the program to represent beneficiaries in overpayment cases and other

SSA administrative activities.

Development of Work Incentives

In recent years, Congress and SSA have implemented a number of work incentives for SSI and

DI beneficiaries (SSA, 2000) to reduce the effect of earned income on benefits, either by

allowing beneficiaries to keep more of their benefits while working or, as in the case of 1619(b),

by permitting a beneficiary to retain Medicaid coverage despite earnings that preclude cash

benefits. However, few beneficiaries actually return to work or even attempt to return to work

once disability benefits are awarded. In an effort to encourage beneficiaries to become employed,

the Federal Government and SSA have made changes in the SSI and DI programs during the past

20 years. These changes, or work incentives, are aimed at reducing the risks and costs associated

with the loss of benefit support and medical services as a result of returning to work. Some SSI

work incentives are the impairment-related work expenses (IRWE) exclusion; the student

earned-income exclusion (SEIE); the Plan for Achieving Self-Support (PASS) program;

Medicaid While Working (1619(b)); and expedited reinstatement of benefits. Some DI work

incentives are the trial work period (TWP); the extended period of eligibility (EPE); and

Medicare for Individuals with Disabilities Who Work. The descriptions of the work incentives

described below are taken directly from SSAs Redbook (SSA, 2005).

Special SSI Payments for Individuals Who Work, Section 1619(a) Section 1619(a) allows

beneficiaries to receive SSI cash payments even when their earned income (gross wages and/or

net earnings from self-employment) is at the substantial gainful activity level. This provision
35

eliminates the need for the trial work period or extended period of eligibility under SSI. To

qualify, a beneficiary must have been eligible for an SSI payment for at least one month before

beginning work at the SGA level, still be disabled, and meet all other eligibility rules, including

the income and resources tests.

Medicaid While Working, Section 1619(b)  Under 1619(b), Medicaid coverage can continue

even if earnings alone or in combination with other income become too high for an SSI cash

payment. To qualify, a beneficiary must have been eligible for an SSI cash payment for at least

one month, still be disabled, still meet all other eligibility rules including the resources test, need

Medicaid in order to work, and have gross earned income that is insufficient to replace SSI,

Medicaid, and any publicly funded attendant care. The threshold amount is the measure that is

used to decide whether earnings are high enough to replace SSI and Medicaid benefits and is

based on the amount of earnings that would cause SSI cash payments to stop in the beneficiarys

state. If gross earnings are higher than the threshold amount for a specific state, the beneficiary

may still be eligible if he or she has impairment-related work expenses, blind work expenses, a

Plan for Achieving Self-Support (PASS), publicly funded attendant or personal care, or medical

expenses above the state per capita amount.

Impairment-Related Work Expenses  Under impairment-related work expenses, SSA deducts

the cost of certain impairment-related items and services that a beneficiary needs to work from

gross earnings when determining countable earnings. It does not matter if an individual uses

these items and services for nonwork activities.

Trial Work Period  The TWP allows beneficiaries to test their ability to work for at least nine

months. During the TWP, beneficiaries receive full DI benefits regardless of how high their

earnings might be so long as the work activity has been reported and the beneficiary continues to

have a disabling impairment. The TWP starts with the first month the beneficiary is eligible for

DI benefits or the month in which he or she files for benefits, whichever is later. The TWP

continues until the beneficiary accumulates nine months (not necessarily consecutive) in which

he or she performed what is called services within a rolling 60-consecutive-month period. SSA
36

currently considers work to be services if it results in earnings of more than $590 a month (for

the year 2005) or the person works more than 80 self-employed hours in a month.

Plan for Achieving Self-Support  Individuals who receive SSI or who could qualify for SSI

are eligible to have a PASS. For example, if an individual has too much income to be eligible for

SSI now, using the income to pay PASS expenses may make him or her eligible for SSI. In brief,

a PASS must:

Be designed especially for the beneficiary;

Be in writing;

Have a specific work goal that the beneficiary is capable of performing;

Have a specific time frame for reaching the goal;

Show what money (other than SSI payments) and other resources will be used to reach the

goal;

Show how the money and resources will be used to reach the work goal;

Show how the money being set aside will be kept identifiable from other funds;

Be approved by SSA; and

Be reviewed periodically to ensure that the plan is actually helping the person achieve

progress.

Extended Period of Eligibility  If a beneficiarys disability payments are stopped because he or

she worked at the SGA level, the beneficiary may be able to automatically receive benefits again.

No new application or disability determination is required. (This is a different rule than the

expedited reinstatement provision of TWWIIA.) The earliest benefits can start again is the month

after the end of the grace period. (The individual is paid for the first month benefits cease due to

SGA and the following two months.) The latest benefits can start again is the 37th consecutive

month after the end of the trial work period. If earnings change significantly from month to month,

it is possible that benefits could be restarted during this period. Benefits can start again for any
37

month in the period described above in which (1) the beneficiary continues to have a disabling

impairment, and (2) the beneficiarys earnings in that month fall below the SGA level.

A DI beneficiarys EPE begins the month after the trial work period ends. For 36 consecutive

months, a DI beneficiary in his or her EPE may receive benefits when countable earnings are

below the amount currently designated as SGA.

Despite efforts made by SSA and the Federal Government that have led to more favorable

conditions for returning to work, most SSI and DI beneficiaries remain on the disability rolls.

The work incentives offered by SSA remain largely underutilized; in March 2000, of the total

number of eligible working beneficiaries, only 0.3 percent were using PASS, 2.8 percent were

using IRWEs, 7.5 percent were receiving 1619(a) cash benefits, and 20.4 percent were receiving

1619(b) extended Medicare coverage (SSA, 2000). The major reasons cited for the extreme

underutilization of these work incentives by beneficiaries were (1) few beneficiaries knew that

the work incentives existed, and (2) those who were aware of the incentives thought they were

complex, difficult to understand, and of limited use when entering low-paying employment

(GAO, 1999).

Purpose of the Study

The purpose of this study is to conduct a comprehensive analysis that (1) examines SSAs

current efforts to implement its SSI and DI disability programs; (2) documents philosophical,

programmatic, and regulatory obstacles that limit the ability of SSA beneficiaries to return to

work; (3) identifies evidence-based practices that promote the return to work of working-age

beneficiaries of the DI and SSI programs; and (4) recommends the legislative, policy, and

regulatory changes that will be necessary to ensure the successful adoption and implementation

of evidence-based practices. This report is a compilation of the findings of the study, including

recommendations that warrant consideration by policymakers responsible for Social Security

disability programs.
38

The following are the four research questions the study was designed to answer:

(1) What are the evidence-based practices that promote the return to work of working-age

beneficiaries of the DI and SSI programs?

(2) What policy changes are needed, given recent trends in program participation and

employment?

(3) Are there proven and documented practices that work best for some populations of people

with disabilities and not others?

(4) Which factors ensure that documented and evidence-based practices could be

adapted/adopted by SSA and other entities that seek to ensure the employment of people with

disabilities? Which factors prevent adaptation/adoption?

Research Methodology

Appendix A details the research methodology used and the four-step approach taken to

implement the study. First, a comprehensive literature synthesis was completed to identify all

information of relevance to the proposed study. Second, detailed structured interviews were

conducted with key stakeholders, including federal SSA officials, representatives of other federal

agencies, consumer and advocacy organizations, service organizations, community service

providers, and business representatives. Third, a preliminary list of findings, evidence-based

practices, and recommendations based on the literature review and structured interviews was

used to develop seven topic papers. These papers were used to facilitate discussion and obtain

reaction from participants who were invited to a consensus-building conference at the end of

January 2005. Individuals with disabilities, advocacy organizations, service providers, and

policymakers who attended the conference had the opportunity to further develop the proposed

recommendations that appear throughout the report.

Content of the Report

After the Introduction (Chapter I), the content of the report is organized according to the major

trends that emerged from the Consensus Validation Conference:
39

The Mission and Purpose of the SSA Disability Benefit Programs  Chapter II

Beneficiary Perspective and Self-Direction  Chapter III

Income Issues and Incentives  Chapter IV

Coordination and Collaboration Among Systems  Chapter V

These four chapters are organized using a similar format. After a brief introduction, each chapter

identifies the issues and problems that study participants considered to be the greatest barriers for

beneficiaries who are employed or who want to be employed. Previous attempts by Congress and

SSA to address these concerns are discussed, both those that have had an impact in the past 15

years and those that have not been successful. Each of the chapters ends with proposed

recommendations for consideration by policymakers for changes in the Social Security disability

system and in the system of federal, state, and local programs with which SSA collaborates in

serving SSI and DI beneficiaries.

Although this study makes no attempt to suggest what a new Social Security definition of

disability should be, it identifies in detail the myriad problems created by the current definition

used to determine eligibility for disability cash benefits and supports. In Chapter II, a brief

explanation is provided of how the disability definition evolved. The policy premises underlying

the current SSA disability programs are discussed in the context of recent advances in health care

and rehabilitation services, changes in the national economy, and the demographics of the SSA

disability population.

Chapter III focuses on the need for work to pay financially and personally for employed

beneficiaries who have found that current work incentives do not go far enough to move them

beyond poverty or from a near-poverty level of existence. Problems identified include

beneficiaries having to define their disabilities in the most negative terms possible to be eligible

for benefits, customer service at the local SSA level that needs improvement, problems resulting

from overpayments made to working beneficiaries, and health care concerns. The chapter

discusses the impact of the Ticket to Work and Work Incentives Improvement Act (TWWIIA),

including the Ticket to Work (TTW) and BPAO programs.
40

Chapter IV identifies a number of disincentives to employment in the current benefit programs,

especially the cash cliff created by the limitation placed on substantial gainful activity, and the

restrictions on asset accumulation in the SSI program. Numerous recommendations are made in

this chapter, including post-eligibility elimination of the concept of SGA, expansion of the

BPAO program, decreasing the restrictions on assets for SSI beneficiaries, eliminating the

waiting period for Medicare benefits for DI beneficiaries, and eliminating marriage penalties.

SSA interfaces with numerous service systems also concerned with the employment and support

of individuals with disabilities at the federal, state, and local levels. Chapter V focuses on

collaborative interactions with the health care, rehabilitation, employment and training, and

education systems, as well as with the business community. In the past 15 years, SSA has been

actively engaged in attempting to improve coordination and collaboration with other federal

agencies. Yet there continue to be policies among the agencies that work at cross-purposes in

promoting employment outcomes for individuals with disabilities. Chapter V includes

recommendations for uncoupling Medicare and Medicaid coverage from SSI and DI cash benefit

payments. Alternatives to the current systems of health care coverage for beneficiaries are

discussed. Also recommended for consideration are changes that would make the Ticket to Work

program more functional by promoting collaboration as opposed to competition between state

VR agencies and ENs. Additional recommendations attempt to make current TWWIIA programs

and provisions more compatible with the One-Stop Career Center system of Department of

Labor and more widely used by transitioning youth served by the Department of Education. The

final chapter of the report, Chapter VI, is a compilation of the findings, including

recommendations that warrant consideration by policymakers responsible for Social Security

disability programs.
41

Chapter II: The Mission and Purpose of the

SSA Disability Benefit Programs

Introduction

The concept of social insurance is by no means new. Modern social insurance originated in

Germany in the late 1800s. These early programs were financed by compulsory contributions

and covered all employees, both skilled and unskilled, young and elderly, male and female, and

regardless of the state of their health. The hallmark of the early Bismarck model was the

provision of statutorily fixed entitlements for individuals in employment. These entitlements

were calculated in relation to the contributions paid. Because the contributions were mandatory,

the worker who met the qualifying conditions was said to have an earned the right to a benefit.

The purpose of this chapter is to provide a brief background on the Social Security disability

programs and to describe the fundamental limitations of the programs that relate to eligibility and

the ability of the agency to provide return-to-work services and supports to beneficiaries. Also

discussed are SSAs current efforts to promote return to work within the current definition of

eligibility and policy framework, and a foundation is provided for subsequent chapters

describing a comprehensive set of recommendations that will improve return-to-work services

and promote employment and economic self-sufficiency among beneficiaries.

Purpose of the Disability Benefit Programs

The major U.S. disability benefit programs trace their history to the Eisenhower Administration

of the 1950s. In 1956, after years of public debate, the Social Security Act was amended to add

the Social Security Disability Insurance (DI) program. In essence, the DI program began as an

early retirement program for older workers whose disabling conditions prevented them from

working until pension age. A strict test of disability was ensured through requirements for

severity of the condition and a prognosis of prolonged or terminal outcomes. The 1956 definition

of disability is still in use today, in both the DI and Supplemental Security Income (SSI)

programs. The strict and rigidly applied definition remains unchanged.
42

The term disability means

(A) inability to engage in any substantial gainful activity by reason of any

medically determinable physical or mental impairment which can be expected to

result in death or which has lasted or can be expected to last for a continuous

period of not less than 12 months (Social Security Act Amendments, 1956).

The very fact that, under the U.S. system, the decision about granting a disability benefit is made

prior to, and without any consideration of, referral to rehabilitation reveals the underlying policy

premise that severe disability equates to early and permanent retirement from the workforce. Yet,

from Social Securitys beginnings, there were discussions not only of paying disability benefits but

also of providing or requiring rehabilitation prior to the award of cash benefits. Berkowitz (2000)

points out that some early designers of our disability programs recommended that Trust Fund

money be used to provide rehabilitation services but not cash benefits to insured people who

became disabled. The notion that rehabilitation should take precedence over paying benefits was

echoed by Roswell Perkins, the Assistant Secretary of Health, Education, and Welfare in the

Eisenhower Administration, who said, The first line of attack on disability should be rehabilitation,

in order that people be restored to useful and productive lives (Berkowitz, 2000, p. 3).

In contrast to the underlying policy premise of the DI program  income replacement insurance

for workers who retire early due to injury or illness  the SSI program is based on a welfare

model. The SSI program was created in 1972 as means-tested cash assistance programs for

elderly individuals and people with disabilities who have not worked or who are not expected to

work. As such, it was intended to serve as a safety net for individuals who had not acquired the

work history necessary to receive assistance under the DI program (Daly and Burkhauser, 2003).

While the eligibility criteria have changed somewhat throughout the 30 years of the program, the

goals of the program have remained the same.

A Rigorous Test of Eligibility for SSA Disability Benefits

The eligibility criteria for both the DI and SSI programs have always been very rigid. Applicants

for both DI and SSI must demonstrate the presence of a severe cognitive or physical impairment.

In addition to the presence of a significant impairment, applicants must show that they are not

able to perform substantial gainful activity (SGA), currently set at $830 per month, which
43

equates to annualized earnings of $9,960. Thus, only individuals with the most severe

disabilities, who are in serious economic need, are able to receive benefits through the program.

Because SSI is a means-tested program, applicants face additional criteria related to current

countable assets, which cannot exceed $2,000 for single, nonblind beneficiaries. While SGA has

been indexed to the national wage since 2001, the asset limit for these SSI beneficiaries has

remained unchanged since 1989 (Kijakazi, 2000). An SSI beneficiarys eligibility or benefit

amount can also be affected by any other unearned income received, including other federal and

state benefits programs, as well as the income of an individuals spouse or other family

members. As a result, the SSI beneficiary population is substantially more economically destitute

than it was at the programs inception during the Nixon Administration.

Not only do DI and SSI beneficiaries have to demonstrate acute economic hardship at the point

of application, the benefits themselves are very low. For DI beneficiaries, benefit amounts in no

way fully replace an individuals lost wages. For high-earnings beneficiaries, the wage

replacement rate may be approximately 25 percent of prior earnings, compared with 56 percent

for low-earnings beneficiaries (SSA Office of the Actuary, 2004). For SSI beneficiaries, the

current maximum federal payment for an individual before state supplements is $579 per month,

or about 73 percent of the federal poverty level for an individual. Given the level of current SSI

benefits, a total reliance on these benefits for income support will not enable most individuals to

be economically self-sufficient.

The Changing Societal View of Work Disability

When Social Security Disability Insurance was conceived in the 1950s, it was designed to serve

individuals age 50 and over who had no expectation of returning to work. The original definition

envisions a program structure that divides those who have work potential, and are therefore

ineligible, and those who have no work potential and are eligible. A list of very specific medical

conditions was established; if the claimant fit into one of these and was not working, disability

was determined. If the claimant did not fit into one of these categories, a more individualized

assessment was conducted to determine whether the condition prevented the individual from
44

performing the kinds of work that might be available, given the claimants age, education,

training, and experience.

Over the next half-century, changes in the economy, medicine, and rehabilitative technology

have complicated the issue of work incapacity, making it difficult to draw a line between those

who can and cannot work. In addition, there have been changes to the legal definition of

disability itself to include those under age 50 and replace long-continued and indefinite

duration with a 12-month minimum. Although the core definition remains unchanged, the

context in which it is applied operates very differently.

SSAs current disability programs remain grounded in the medical model of disability, in

which disability is viewed as biological condition resulting from a cognitive or physical

impairment that leaves an individual unable to work. This model does not reflect the new

disability paradigm that recognizes the role that the social and physical environments play in the

life experiences of people with disabilities (Silverstein, 2000). In a recent study, the GAO

summarized its research on the federal disability programs over the past several years and

reached the following conclusion:

GAOs work on federal disability programs, including DI, has found that these

programs are neither well aligned with 21st Century realities nor are they

positioned to provide meaningful and timely support for Americans with

disabilities. Our work suggests that these programs remain grounded in outmoded

concepts of disability, and are not updated to reflect scientific, medical,

technological, and labor market improvements (GAO, 2005, p. 14).

Rehabilitation and return to work are not recognized objectives of the Social Security disability

programs (Social Security Advisory Board, 2003). SSAs return-to-work efforts have had limited

results to date, in large part because they have been implemented in a policy and regulatory

environment that is over a half-century old.
45

The Problem

Policy Premises Underlying the Definition of Disability

Our nations current disability benefit programs are based on a policy principle that assumes that

the presence of a significant disability and lack of substantial earnings equates to an inability to

work. Applicants are required to demonstrate a permanent incapacity to work in order to obtain

SSI or DI cash benefits. The all-or-nothing nature of the disability programs creates enormous

challenges for SSA as it attempts to design and deliver return-to-work services and promote

employment among beneficiaries. SSA and its collaborating agencies are attempting to provide

rehabilitation and return-to work services and supports to beneficiaries who have already been

determined to be permanently unable to work (in the case of DI) or who are not expected to

obtain employment in the foreseeable future (in the case of SSI).

Policymakers, researchers, and advocates have consistently identified numerous problems with

the current definition of disability used in the SSI and DI programs (Barnhart, 2003; Wittenburg

and Loprest, 2004; Wunderlich, Rice, and Amado, 2002). Four key problems associated with the

current definition of disability are identified below:

(1) The current definition of disability hampers SSAs return-to-work efforts because applicants

are required to demonstrate a complete, permanent inability to work in order to qualify for

benefits.

(2) The current definition fails to recognize the concept of partial disability.

(3) The current definition does not take into account that, for many consumers, disability is often

a dynamic condition.

(4) The length of the application process in current Social Security disability programs and the

waiting periods in the DI program actually contribute to the ineffectiveness of return-to-work

efforts and the inability to intervene early in the disability process.

In the remainder of this section, each of these problems is described in detail. Where appropriate,

the experiences of other countries and other U.S. disability management programs are discussed
46

to highlight the impact of the current definition of disability on the efforts of individuals with

disabilities to obtain employment or return to work.

Delinking the Concept of Disability from Work Incapacity

In order to be eligible for SSA cash benefits, an individual must prove that, as a result of a

disability, he or she is permanently incapable of performing any job in the nations economy

deemed appropriate for the applicants age, education, and work experience. Yet it is abundantly

clear that millions of individuals with disabilities, many of whom would otherwise meet the SSA

definition of disability, are working in full- and part-time employment situations and pursuing

rewarding careers.

The current eligibility criteria ignore the incredible advances in medicine and technology that

enable many individuals with severe disabilities to lead independent and economically selfsufficient lives. The criteria do not acknowledge the progress made through improved

educational services and the development of evidence-based employment strategies such as

supported employment. Perhaps more important, the definition has little relevance within our

current public policy framework for individuals with disabilities (Silverstein, 2004), which is

based on a presumption that individuals with disabilities are able to work and have a right to the

accommodations and supports that will enable them to lead independent lives.

The current definition also falls short by failing to acknowledge that individuals with disabilities

who attempt to enter and maintain employment may frequently encounter extra costs that would

generally not be faced by other workers. For example, the costs associated with acquiring and

maintaining adaptive equipment, assistive technology, specialized software, vehicle modifications,

and other accommodations may prohibit the individual from obtaining the supports necessary to

enter employment. Other individuals may incur ongoing costs such as personal assistance services,

specialized transportation fees, or necessary medications. A disability benefit policy that is based

on a concept of total incapacity to work denies too many individuals the services and supports they

need to escape the disability rolls and become self-sufficient.
47

Finally, the current programs too frequently set eligibility for disability benefits as a precondition

for other federal and state programs that can provide the housing, transportation, child care, or

personal assistance services and supports necessary to maintain employment and economic

independence. Many people with severe disabilities who might otherwise qualify for SSI or DI

can and do work full time and do not receive any disability benefits. However, as a consequence

of working, these individuals may be unable to access any additional help or support to offset the

costs of their disability.

A number of other countries have developed policies and programs that acknowledge that having a

disability often leads to additional long-term costs on the part of the individual and his or her

family. In contrast to programs designed to replace lost wages (like the DI program), these

programs attempt to compensate the individual for the additional costs associated with disability.

For example, the United Kingdoms (UKs) disabled persons tax credit (DPTC) is designed to

neutralize the costs of having a disability by decoupling the need for help with additional costs

from being in actual receipt of disability benefits. To qualify, individuals must have less than

£16,000 in savings (about $32,000), so the credit is not geared toward only low-income workers, as

is the U.S. earned income tax credit (EITC). The amount of the DPTC depends on the number of

hours worked and the severity of the disability, so it applies to individuals working either full or

part time. Under the program, individuals with disabilities who work do not have to wait until the

end of the tax year to file for retroactive payment or to have it taken off their taxable income, as in

the case of the U.S. system. Instead, employers in the UK pay these funds as a supplement to

wages right in the workers paychecks, so that they augment their earnings as they are working.

Policymakers and advocates agree that the all-or-nothing policy premise in the Social Security

disability program eligibility requirements creates significant challenges for SSAs return-towork efforts. Congress and SSA have been unable to overcome the contradictions inherent in

designing and providing return-to-work services to beneficiaries who have already been

determined to be permanently unable to work within the existing policy framework. For DI

beneficiaries, the lack of a gradual reduction in benefits as a beneficiarys earnings increase

makes employment a highly risky choice for many individuals. For SSI beneficiaries, the

inability to accumulate assets over time makes movement toward economic self-sufficiency
48

extremely difficult. As a result, SSA has continuously struggled with the dichotomy of spending

scarce resources to provide return-to-work services within a policy framework established to

provide supports to individuals who are permanently removed from the workforce or unlikely to

obtain employment in the future.

Recognizing the Concept of Partial Disability

The current definition of disability fails to recognize the concept of partial disability or

temporary disability. For example, many people with severe disabilities may not be able to work

full time but are willing and able to work part time if that were an option under which they could

maintain entitlement to some benefits. The highly inflexible system harms individuals with

disabilities in two ways.

First, some individuals who may be capable of working 20 hours per week, but whose condition

prevents them from sustaining full-time employment, may find that they are ineligible for SSA

benefits. These individuals may be denied benefits based on the fact that they earn wages above the

SGA threshold (yet do not earn enough to be economically self-sufficient), or their prior work

activity makes it more difficult for them to prove their permanent inability to perform any job in

the economy. These individuals may face the choice of continuing to work at low levels but

remaining ineligible for benefits, or stopping work altogether to gain access to needed benefits.

Second, individuals with disabilities with no prior work history, but who may be able to work part

time with appropriate supports, are denied these supports because they are not eligible for SSA

benefits. For example, for some individuals with disabilities, eligibility for SSI benefits will lead to

eligibility for Medicaid, which will enable them to access personal assistance services and other

employment supports. These individuals may feel that they have no choice but to apply for

disability benefits since, in the absence of those benefits, they are unable to maintain employment.

However, once determined eligible for benefits, these individuals may be afraid to attempt to work,

since an unsuccessful work attempt may threaten the cash benefits they already receive.

Other federal benefit programs recognize the concept of partial disability, but the design of these

programs tends to funnel out individuals who might benefit from partial disability payments in
49

the all-or-nothing Social Security program. For example, in the current system, workers

compensation, private insurance companies, and the Veterans Administration (VA) provide some

type of partial benefit program to individuals that meet a definition of permanent disability.

However, in the workers compensation and private insurance systems, applicants who qualify

are required to apply for the SSA program, thereby funneling individuals from systems that

provide partial benefits out to the larger DI program, where partial benefits are unavailable.

Recognizing the Dynamic Nature of Disability

The current definition of disability does not take into account that for many consumers, disability

is a dynamic condition. For example, many individuals on the DI rolls who experience

psychiatric disabilities, multiple sclerosis, rheumatoid arthritis, lupus, and many other conditions

describe their disabilities as episodic in nature. At certain times, they are fully able to obtain and

maintain employment. However, at other times their conditions require them to disengage from

the workforce. The eligibility criteria used by the Social Security disability programs do not

allow for easy transitions on and off benefits and thus create incentives for these individuals to

remain permanently unemployed once they have become reliant on the programs.

Available data indicate that there is significant variation in the work activity of existing DI and SSI

beneficiaries. In an analysis of SSA data, the Government Accountability Office (GAO) found that

nearly half of all DI beneficiaries earning from 75 percent to 100 percent of SGA in 1985

experienced significant reductions in earnings in subsequent years (GAO, 2002c). Similarly, recent

data indicate that only half of all SSI beneficiaries who report earnings in a given year report

earnings in each of the subsequent three years (Balkus and Wilschke, 2003/2004).

Other countries have developed disability benefit programs that are based on a more dynamic

concept of disability. Wittenburg and Loprest (2004) studied disability benefit programs in four

European countries and found that eligibility and reassessment processes in these countries tend

to more closely resemble a continuum, with the individual moving through a series of stages, in

contrast to the all-or-nothing eligibility criteria of the Social Security programs. In the European

countries examined, eligibility rules change continuously as the individual moves from a

temporary sickness or temporary disability program to a permanent disability program.
50

Additionally, individuals may move from one type of program to another based on their

vocational needs. Individuals who benefit from rehabilitation may move into a less permanent

status, or individuals who are not benefiting from rehabilitation services may move seamlessly

into a more permanent disability status.

Providing Early Intervention Services

The length of the application process in the SSI and DI programs can contribute to the

ineffectiveness of return-to-work efforts. In both programs, applicants must spend months or

even years documenting their inability to work, which makes it unlikely that they will seek to

obtain employment immediately after being determined eligible. For DI beneficiaries, the

problem is compounded by the fact that there are lengthy waiting periods for both cash benefits

and Medicare benefits. Thus, DI beneficiaries are denied the services and supports necessary to

promote return to work at the very time they would likely benefit most from those services.

Social Security may be viewed as the nations largest insurance carrier. Like all welladministered indemnity programs, SSA needs to maintain an active oversight of who gets on the

rolls and how long they stay there. It is a basic rule of the insurance industry that successful

companies must manage cases against the risk, meaning that they provide services that will

reduce exposure to claims and unnecessary costs. As a government-administered indemnity

program, it is no longer enough for SSA to simply pay the medical bills and distribute benefit

checks. To reduce future costs, SSA must devise ways to identify potential disability applicants

and apply early intervention strategies that return people to work before they apply or divert

them back to employment immediately after they make application.

Large and small companies in the United States understand the importance of providing services

and supports to individuals with disabilities immediately after the onset of disability. The process

of effectively dealing with employees who become disabled is referred to as disability

management. Disability management means using services, people, and materials to (1)

minimize the impact and cost of disability to the employer and the employee, and (2) encourage

return to work of an employee with disabilities in a cost-effective manner. There is growing

evidence that the earlier the employer intervenes through disability management services, the
51

faster the ill or injured worker will return to work. In fact, there is some evidence suggesting that

the longer ill or injured employees stay out on disability leave, the less likely they are to ever

return to work (Habeck and Hunt, 1999; Williams and Westmoreland, 2002).

Reducing the DI rolls by implementing a coordinated array of prevention, early intervention, and

diversion strategies will require SSA to make a major paradigm shift and totally redefine both its

mission and how it conducts its work on a day-to-day basis. In order to be successful in these

endeavors, SSA must work in an aggressive and proactive manner to indemnify against future

risk, as opposed to simply passively processing applications submitted by former workers with

severe disabilities and then managing their ongoing payments. The possibilities presented by

prevention, early intervention, and diversion techniques are encouraging. However, the ultimate

success of these efforts may be limited by the problems discussed above related to the programs

eligibility criteria.

Attempts by SSA to Impact Its Definition of Disability Through Modified

Program Rules

The SSA concept of disability was developed a half-century ago and has not changed in spite of

the enormous changes in the national economy and in societal views of individuals with

disabilities. SSA has long recognized the contradictions and outdated policy premises that form

the basis of the current programs and has taken measures to promote employment among

beneficiaries. The efforts, however, have focused on those who are already on the programs and

thus have met the initial strict eligibility criteria. Over the past two decades, the agency has

slowly modified program rules to encourage work attempts and operated a program in

collaboration with the Rehabilitation Services Administration (RSA) to offer rehabilitation

services to individuals after they have been determined eligible for SSI or DI. With the passage

of the Ticket to Work and Work Incentive Improvement Act (TWWIIA) in 1999, SSA expanded

its return-to-work efforts to include the creation of the Ticket to Work and Self-Sufficiency

Program, as well as several other new programs designed to expand access to public health

insurance and employment supports. In the words of Social Security Deputy Commissioner

Martin Gerry, We are trying to change the idea that there is something inconsistent between
52

benefits and work (Gerry, 2005). The new reform paradigm within SSA is reflected in a series

of innovative demonstration efforts that SSA is operating or planning to initiate to test the

effectiveness of delivering services and supports earlier in the process and eliminating additional

disincentives in current programs. These demonstrations include the following:

SSDI Benefit Offset Demonstration Project  TWWIIA requires SSA to conduct an evaluation

that tests the effect of allowing DI beneficiaries to work without the fear of losing all benefits by

reducing monthly benefits by $1 for every $2 of earnings above an established threshold. In

September 2004, SSA awarded a contract to Abt Associates to design a national demonstration.

SSA is also in the process of developing individual state demonstrations in four states

(Connecticut, Utah, Vermont, and Wisconsin).

Mental Health Treatment Study  The Mental Health Treatment Study demonstration will test

the extent to which eliminating programmatic work disincentives, establishing an accurate

diagnosis, and delivering appropriate mental health and employment supports will lead to better

employment outcomes and other benefits. This demonstration is targeted to Title II beneficiaries

with a primary impairment of schizophrenia or affective disorder.

Temporary Allowance Demonstration Program  The Temporary Allowance Demonstration

Program is designed to provide temporary cash and medical benefits to individuals who are

likely to benefit from aggressive and immediate medical care. The program will target applicants

who are likely to meet the Social Security definition of disability and are likely to experience

medical improvement in the near future. This demonstration is in the early planning stages.

Youth Transition Demonstration  The Youth Transition Demonstration projects are designed

to test the impact of a comprehensive package of services and SSI waivers on the postsecondary

educational and employment outcomes of SSI beneficiaries between the ages of 14 and 25. The

demonstration projects are designing and implementing interventions that include services and

supports such as benefits advisement, cash and counseling approaches, service coordination,

disability program navigators, enhanced individual development accounts (IDAs), and job

placement and training services.
53

The demonstration initiatives described above illustrate SSAs attempts to improve its return-towork efforts by redefining the policy premises underlying the program. SSA is slowly coming to

view the design and delivery of return-to-work services as a major part of its mission. Efforts to

test a gradual reduction in DI benefits to offset earnings increases reflect a recognition of the

dynamic nature of disability; that is, that a beneficiarys ability to sustain employment above

SGA will vary considerably over time and will be affected by medical, social, and economic

factors. The Temporary Allowance and Mental Health Treatment Study demonstrations

recognize the importance of providing rehabilitation and medical services and supports to

beneficiaries before the individual becomes permanently detached from the workforce. Finally,

the Youth Transition demonstration acknowledges that many adolescents and young adults with

severe disabilities who previously have been viewed as incapable of employment can pursue

self-chosen careers and become economically self-sufficient when provided with the proper

services and supports.

The Urgent Need for Policy and Program Changes

Although SSA has taken steps to improve its return-to-work services, a more comprehensive

change in the agencys process and underlying philosophy is necessary in order to make SSA

disability programs more work-oriented. SSA needs to integrate return-to-work strategies into all

relevant phases of its disability determination process and benefits systems to enable workers

with disabilities who can return to work to do so. To accomplish this task, the agency must

address the contradictions inherent in the current definition of disability, the existing eligibility

process, and many current program regulations.

The disincentives to employment that face SSA beneficiaries take many forms: fear of a loss of

benefits due to an unsuccessful work attempt; low expectations resulting from the current

disability determination process requiring a beneficiary to prove an inability to work; lack of

access to health insurance; the coupling of benefit payments and health insurance eligibility;

inability to access necessary rehabilitation services and supports; and the sheer complexity of

SSA rules and regulations themselves. Beneficiaries often face seemingly insurmountable

challenges as they attempt to obtain and sustain employment. In the next three chapters, a

comprehensive review of SSAs return-to-work efforts is presented in three areas  beneficiary
54

perspectives and self-direction, income issues and incentives, and coordination and collaboration

with multiple federal and state systems.

In the area of beneficiary perspectives and self-direction, many of the problems reported by

beneficiaries in their daily interactions with SSA are described. These problems include the lack

of responsive customer service, inability to obtain accurate and complete information on the

effects of employment on benefit level and health care coverage, the devastating effects of

overpayments that often occur when a beneficiary attempts to go to work, and the disincentives

to marriage in the current program regulations.

The income issues and incentives chapter presents a detailed description of the disincentives

caused by SSAs efforts to promote employment opportunities within a system designed for

individuals who are permanently retired from the workforce or individuals who are viewed as

unable or unlikely to work in the future. Emphasis is placed on the need to eliminate the existing

cash cliff in the DI program by creating a gradual reduction in benefits as earnings increase, as

well as continued attachment to the DI and Medicare programs for DI beneficiaries who maintain

employment for extended periods. The chapter also focuses on disincentives in the SSI program

that prevent beneficiaries from building the assets necessary for long-term economic selfsufficiency, as well as the complexity of the DI and SSI program rules that make self-directed

financial planning extremely difficult for many, if not most, beneficiaries.

In the chapter addressing coordination and collaboration with multiple federal and state systems,

we address SSAs current efforts to work collaboratively with public and private health care

providers, the federal-state rehabilitation system, the federal employment and training system,

the educational system, employers, the business community, and the private insurance industry.

The resulting recommendations are based on the premise that the scope and complexity of

reforms required to significantly increase employment opportunities for SSA beneficiaries will

require concerted efforts by partner agencies providing the rehabilitation, educational, and health

care supports required for long-term employment success.
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Chapter III: Beneficiary Perspective and Self-Direction

Elizabeth and Salvador were married in February of 2005. Prior to the marriage,

Elizabeth received SSI benefits of $579, and Salvador received both a Social

Security check of $500 and an SSI benefit of $99. Before the wedding, the

combined income they had to live on was $1,178 per month. After the marriage,

there was an immediate impact on the SSI payments. Instead of two SSI

beneficiaries, they became an eligible couple. Their combined income dropped to

$889 per month, a loss of $289 per month from their budget.

Elizabeth and Salvadors change in marital status had an immediate impact on SSI

payments, resource limits, and excluded income. It also created disincentives to

work. As individuals, Elizabeth and Salvador could earn more and retain

entitlement to SSI cash benefits. Since she had no other income, Elizabeth could

earn up to $1,243 before losing SSI cash benefits. Salvador, because he had other

income, could have earned $263. Combined, as single individuals they could earn

up to $1,506 before losing SSI payments. But as an eligible couple, Salvador and

Elizabeth would lose all SSI cash payments if they earned $843.

In April, Elizabeth was offered a job making $12.50 per hour for 20 hours a week,

or $250 a week (which is a little over $1,000/month). Because Salvador already

had $500 of unearned income, Elizabeth could earn only $843 in a month before

Salvador lost Medicaid coverage under the 1619(b) provision of the Social

Security Act. Salvador has very high medical needs, and losing Medicaid would

be devastating. Elizabeth was, therefore, unable to take the job.

Salvador and Elizabeth are not alone. Many SSI-eligible couple beneficiaries who

could start or increase work would risk their spouses Medicaid coverage by

doing so. If these individuals were not married, or if married SSI beneficiaries

were treated the same as unmarried SSI beneficiaries, there would be no loss of

health care benefits.

Introduction

A great amount of time and resources have been spent on the policy debate concerning various

ways to reduce the amount of tax dollars currently dedicated to the payment of medical and

financial supports for individuals with severe disabilities. Unfortunately, the voice of

beneficiaries, the most essential members of the movement toward systemic improvements, is

frequently lost in the whirlwind of political arguments for legislative and regulatory change.
56

Without a strong emphasis on how policy choices affect individual beneficiaries, the hope for

effective change is slim.

Individuals with disabilities apply to SSA or other benefit providers because they are in dire need

of financial support or other essential benefits, such as health insurance. Often, the refusal or

removal of these benefits leads to instant and severe hardship. The web of benefits necessary for

full support, such as housing, Medicaid, SSI, Social Security Disability Insurance (DI), Food

Stamps, Energy Assistance, and other local supports is often so complex that it is nearly impossible

for any one person to understand it all. The current network of benefits compounds rather than

alleviates feelings of powerlessness. If beneficiaries are to attempt to obtain employment or return

to work, they must feel secure that their efforts will be rewarded, financially and personally.

Without an increase in security or confidence in their overall financial status, the barriers that exist

among SSA and SSI beneficiaries and work may seem insurmountable.

This chapter describes some of SSAs current attempts to improve customer service and public

information about work incentives from the perspective of beneficiaries. First, a number of

obstacles to return to work and weaknesses in the current program are identified. Second, recent

efforts by SSA to address these weaknesses are analyzed. Also discussed are some health care

options available to beneficiaries in the current economy. Finally, the chapter makes

recommendations for change that will encourage beneficiaries to reduce their dependence on

federal benefits and increase their economic self-sufficiency.

The Problem

There is still a need to go through the window of swearing to the government that

your disability prevents you from working in order to get the supports you need in

order to then go out and find a job. I just think that is a fundamental flaw that the

Ticket to Work legislation was a small effort at addressing, but I still think we

have big problems in that we make a person take an oath in order to get supports.

Its particularly problematic for young people. The notion that an 18-year-old

would retire at age 18 and would have to swear to the government that they cant

work in order to get health care and supports to me is bad policy (Andy Imparato,

President, American Association of People with Disabilities, December 2004).
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When the DI program was created in 1956, it was designed as a financial support for people over

50 years of age who were forced to permanently leave the workforce prior to retirement age

because of a disability (Social Security Advisory Board, 2003). Subsequent programs entitled

adults disabled in childhood to receive benefits, and SSI allowed children under age 18 to receive

a benefit because of a disabling condition if the family had low income and resources. As the

programs expanded, they failed to reflect the huge changes in medical treatment and societal

perception of impairment and employment opportunities that have occurred since program

inception (GAO, 2004a).

In order to receive benefits, an applicant must define his or her situation in the most negative

terms possible  an inability to work, both now and in the future. The applicant must document

to the government that he or she is unable to work at any significant level. This process helps to

internalize the message that the individual is incapable of working. Once the individual has

applied for benefits, disability determination staff affirm that he or she has severe work

incapacity, reinforcing socially prevalent negative messages about disability and work. If the

individual is not approved for benefits at the initial application level, the person must then

proceed through a series of appeal steps in order to obtain essential supports. This process can

take years and a significant amount of effort and stress (GAO, 2004a). Once awarded, this hardfought prize is even more highly valued, and the individual is initially unlikely to jeopardize

eligibility by attempting to obtain employment or return to work.

Once determined eligible for disability benefits, beneficiaries face a host of complex program

rules and policies related to continuing eligibility for cash benefits and access to health care.

Many beneficiaries, confused or uninformed about the impact of employment on their life

situations, have shied away from opportunities to become self-sufficient through work. Past

efforts of Congress and SSA to encourage beneficiaries to work have included the addition and

expansion of work incentive provisions, as well as changes to certain program rules recognized

as limiting or negatively impacting beneficiaries. In spite of these efforts, many significant

barriers remain.
58

Beneficiaries considering the possibility of returning to work must weigh the benefits of

employment against potential costs. These costs include a reduction in overall monthly income

due to earnings limitations, limits to the availability of health care and other necessary

employment supports, penalties associated with the development of assets, the probability of

significant overpayments of benefits, and difficulties associated with understanding and

managing benefit and employment impacts over time. Major improvements to the current Social

Security disability programs, such as those recommended below, are needed immediately if there

is to be an increase in the number of beneficiaries leaving the rolls as a result of work. Without

such improvements, it is unlikely that significant numbers of beneficiaries will assume the risks

and losses inherent in an effort to return to work.

Customer Service

For a number of years, SSA has been reducing staffing levels in its local offices (Consortium of

Citizens with Disabilities, 2000). At the same time, the number of individuals applying for and

receiving benefits has steadily increased. The result is an overworked SSA workforce that must

deal with an overwhelming and growing workload. Insufficient staffing has often led to long

lines and poor service. The processing of appeals and back-to-work issues is not performed in a

timely manner. Misinformation is frequent, and mistrust is common.

Beneficiaries often report that SSA needs to improve customer service. Frequently reported

problems include offices and meeting spaces that are too noisy for individuals with hearing loss,

lack of information in accessible formats for individuals with vision loss, and misunderstandings

about how work incentives might relate to specific impairments. Long waits for service in field

offices are common, as is the frequent loss of essential paperwork sent to SSA. In some field

offices, it is not uncommon for the main telephone numbers to be busy for extremely long

periods of time. Trying to access specific staff members is often quite difficult, and it is

frequently reported that staff do not return messages left by beneficiaries or their advocates in a

timely manner.
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Health Care Concerns

Medicaid and Medicare health insurance coverage is often essential to beneficiaries. A

significant percentage of beneficiaries live near or below the poverty level (SSA, 2004e). All

have disabling conditions, many of which require expensive treatments for an extended period of

time. Without access to necessary health care, both morbidity and mortality will increase. In fact,

in a recent study, beneficiaries listed loss of health insurance as the largest barrier to return to

work (MacDonald-Wilson, Rogers, Ellison, and Lyass, 2003).

Even though individuals generally receive health insurance after becoming entitled to cash

benefits under Social Security disability or SSI, the coverage may not completely meet the

beneficiarys needs. This is especially true of Medicare, which has not provided full

comprehensive coverage since its inception in 1965. Part A (Hospital Insurance) and Part B

(Supplemental Medical Insurance) require deductibles, co-payments, monthly premiums, and,

for many, some other form of supplemental health coverage. Medicare managed care plans

through health maintenance organizations, called Medicare Advantage Plans, are available to

offer somewhat more comprehensive coverage, but they have widely differing access rules and

availability at state and county levels.

As described in Chapter I, many states have opted to offer Medicaid buy-in programs that

provide Medicaid coverage to working individuals with disabilities. Eligibility tests for these

programs vary widely from state to state. While the Medicaid buy-in provides a new opportunity

for beneficiaries to engage in work activity, eligible individuals sometimes encounter problems

with the program, such as the unavailability of providers accepting Medicaid. Also, not all buyin programs provide the same pharmaceutical benefits. For example, some limit the number of

prescriptions an eligible beneficiary can receive (Goodman and Livermore, 2004).

Relying on only one source of health coverage has proved to be inadequate for many

beneficiaries. Both Medicare and Medicaid have restrictions and eligibility requirements that

may create challenges for beneficiaries. Medicaid recipients may not receive some optional

benefits, may face restrictive income and asset requirements (Sheldon, n.d.a), or may encounter

limited physician choice. Beneficiaries must complete a 24-month qualifying period to receive
60

Medicare. Also, until the Medicare Modernization Act Medicare (MMA) Part D becomes

effective in January 2006, Medicare beneficiaries must pay for prescription medications entirely

out-of-pocket. Once MMA prescription coverage has begun, beneficiaries will still have a

significant out-of-pocket share for prescriptions.

Deficiencies in the Wage Reporting System Resulting in Overpayments

The reduction and/or loss of SSI and DI benefits as a result of work and earnings can serve as a

disincentive to employment for beneficiaries. The inherent work disincentive in the benefit

programs is further exacerbated by the likelihood of substantial benefit overpayments that occur

as an unintended consequence of work. SSA relies heavily on beneficiaries to report work

activity and other changes in circumstances that impact benefit eligibility and payment amount.

If work activity is not reported in a timely manner by beneficiaries, overpayment of benefits is

generally a result. However, as many beneficiaries and advocates have discovered, in spite of

appropriate wage reporting by individuals, the failure of SSA to act on reported earnings

information in a timely manner and adjust benefits accordingly likewise results in substantial

overpayments for many beneficiaries.

According to SSA, earned income is the most common reason for overpayments in the SSI and DI

programs (SSA, 2002). Based on data from an SSA study, the GAO recently reported that

overpayments attributable to work and earnings averaged about 31 percent of all DI overpayments

annually between 1999 and 2002. Overall, total DI overpayment detections increased from about

$772 million in FY 1999 to about $990 million in FY 2003 (GAO, 2004b). Newly detected SSI

overpayments were nearly $2 billion, or 6 percent of total outlays in 2001 (SSA, 2003). The extent

of overpayments in the disability programs not only compromises the integrity of the programs but

also serves to undermine the resolve of beneficiaries to increase their work efforts and reduce

reliance on benefit supports. Beneficiaries considering work must weigh the potential of having to

repay a large benefit overpayment as an additional cost of employment.

Numerous factors have been identified as impeding the ability of SSA to make accurate benefit

payments, resulting in overpayments to beneficiaries. These factors include the complexity of the

disability program rules, insufficient access to timely and current earnings data, as well as
61

complexities and inefficiencies in the current DI work activity CDR process (GAO, 2002a, b;

GAO, 2004b; Livermore, 2003).

Complexity of Program Rules

Determining accurate monthly payment amounts in the SSI program involves matching an

individuals need with his or her financial situation for a given month. As changes are

experienced in earnings level, adjustments must be made to ensure accurate benefit payments.

Projected monthly earnings amounts provided by SSI beneficiaries are used by SSA to determine

monthly benefit amounts for the following 12-month period. Overpayments result when

projections of earnings are incorrect or changes in earnings are not reported or acted upon.

Additionally, the rules governing how earnings and other income are counted and how

exclusions are applied are complex and create confusion among beneficiaries regarding reporting

requirements. For example, a working SSI recipient may have his or her benefits recalculated,

resulting in eligibility for DI benefits. This results in separate letters to the beneficiary: one letter

states that the SSI recipient has been overpaid (paid too much SSI) during certain months that he

or she was entitled to DI; a separate letter from DI states that he or she had been underpaid DI

during the months he or she was owed DI. This is called the windfall offset provision, because

the overpayment for SSI is taken out of the persons first DI checks.

Discrepancies in the treatment of income between the SSI and DI programs likewise contribute to

confusion and difficulties in the reporting of income and subsequent benefit adjustments. For SSI

purposes, benefit eligibility in a given month is based on earnings received in that month, and

usually the amount of benefit is based on earnings or other income received two months before the

payment month. For the DI programs, benefits are based on wages earned in a month. While SSI

cash benefits are adjusted when beneficiaries reach $65 in monthly gross earnings, a DI cash

benefit is not impacted until the beneficiary engages in SGA-level work following completion of

the trial work period. In addition, the array of work incentives available in each program and their

impact on countable income determinations vary significantly. Disparities in program rules are

particularly problematic for concurrent beneficiaries who must understand and negotiate both

programs as well as the interface between the two programs to avoid substantial overpayments.
62

Insufficient Access to Timely and Accurate Earnings Data

Access to timely and accurate earnings information is essential if overpayment of benefits is to

be avoided. This is particularly true for the SSI program, which pays monthly benefits based on

the actual amount of income received by a beneficiary. Individual circumstances and earnings

may change often, requiring SSA to continuously reassess and adjust payment amounts. Reliance

on beneficiary reports of income is problematic given the complexity of income definitions and

rules and the challenges it poses for beneficiaries who are attempting to understand the impact of

even minor changes in their earnings on their eligibility and benefit amount.

Complex and Time-Consuming Nature of DI Work Activity CDR Processing  Work

activity continuing disability reviews (CDRs) are performed in the DI program to determine if a

beneficiary is engaging in substantial work following the trial work period. The work activity

CDR process is complex and time-consuming, involving the development of information related

to a beneficiarys work effort, verification of earnings level achieved and monthly wages earned,

and the assessment of work effort against the SGA guideline, including the development and

application of any subsidies and work incentives relative to the SGA determination.

The inability of SSA to effectively manage the work activity CDR caseload and make SGA

determinations and benefit adjustments in a timely manner has resulted in overpayment of

benefits for many DI beneficiaries. Factors identified as contributing to this problem are well

documented and include insufficient management information to support internal caseload

monitoring; the lack of screening mechanisms to identify DI beneficiaries at risk of large

overpayments; inadequate automation of the complex process; and staffing constraints related to

expertise, competing caseloads, and duplication of effort between field offices and program

service centers (GAO, 2004b; Livermore, 2003).

Marriage Penalty

There are several provisions in the Social Security Act that terminate or reduce benefits because

a beneficiary marries. This section will be restricted, however, to discussing the combined

disincentives to marry and work created by the eligible couple provisions of the SSI program.
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SSI beneficiaries often live significantly below the poverty level and may slide further into

poverty by marriage. Spousal income is deemed to be available to the SSI beneficiary, often

causing loss of essential income and health care supports upon marriage to an individual who

does not receive SSI. If an SSI-entitled individual marries someone else who is eligible for SSI,

there is a status change that lowers the potential SSI benefit to both individuals, increases the

reduction in available income caused by work, and significantly increases the risk to health care

created by working.

Eligible couple status is assigned to SSI beneficiaries who live together and are married or

holding out to the community as if they are married. The SSI program treats an eligible couple

as one SSI unit. The highest possible federal benefit payment for the eligible couple unit is

reduced by one-third from the total combined benefit for two unmarried individuals.

When two SSI recipients become an eligible couple, not only is their maximum combined SSI

benefit reduced, but the impact of other income against the potential SSI payment is increased.

Each single SSI individual beneficiary receives an exclusion of $20 for all types of income and

an additional exclusion of $65 of earned income when SSA determines benefit payments. A

couple, however, receives only one $20 and one $65 exclusion. The result is that work has a

greater negative impact on SSI benefits received by eligible couples. This creates a disincentive

to marry for SSI beneficiaries, a disincentive that is exacerbated by work activity because of

potential loss of health care.

Most states offer Medicaid entitlement automatically to SSI beneficiaries. Extended Medicaid for

people who work, authorized under Section 1619(b) of the Social Security Act, allows SSI

beneficiaries to retain Medicaid entitlement even though they have too much income to receive

an SSI cash payment. For Section 1619(b) to apply, the person must meet all other eligibility

criteria, such as disability status and resources under the allowable limit. The person may retain

Medicaid only if it is the individuals own earned income that causes the loss of entitlement to

cash payments. Because SSI is the payer of last resort for basic needs, any income, including the

earnings of a spouse, impacts receipt of SSI. If two SSI beneficiaries are married, the income of

either member of the couple is counted against the possible benefit of both. What is earned
64

income to the working member of the couple is treated as unearned income to the spouse. Since

the 1619(b) provisions require that the SSI beneficiary meet all SSI eligibility criteria except

income attributable to earnings, only the working spouse retains Medicaid.

Fortunately, if both husband and wife work, they may both retain Medicaid under Section

1619(b). It often happens, however, that one member of a couple is ready or willing to try work,

but the other member of the couple is medically unstable, unable to find work, or otherwise not

working. The result is that the member of the couple who could work might be unable to work to

his or her full potential without risking essential medical services for the spouse. How much the

working member of the couple could earn would depend on other income. If there were no other

income, for example, the working member of the couple could earn slightly less than $1,823 per

month in 2005 before the nonworking spouse would lose Medicaid. If the couple had high

unearned income, the amount the working member of the couple could earn would be very low.

Previous Attempts by Congress and SSA to Improve Customer Service and

Beneficiary Control

Congress and SSA have implemented many legislative changes, program modifications, training

initiatives and automation efforts in the past 15 years. Many of these have resulted in improved

customer service but have not had a direct impact on beneficiary sense of control to date. Some

examples of these modifications include testing of quarterly online wage verification in SSAs

Chicago Region; implementation of the Office of Hearings and Appeals (OHA) Case Processing

and Management System (CPMS) to facilitate tracking of appeal files; streamlining disability

claims processing (GAO, 2004a; GAO, 2004c); and the Social Security Protection Act, which

clarified income and asset definitions to streamline the adjudication of SSI applications (SSA,

2004d). Although any effort to streamline processing and improve customer service should be

lauded, the volume and level of detail necessary to discuss all the hundreds of programmatic

changes at length would be overwhelming. In order to limit the list to a manageable volume, the

following discussion outlines the initiatives that are clearly directed toward the improvement of

beneficiary understanding and choice.
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The Ticket to Work and Work Incentives Improvement Act

As described in Chapter I, many components of the Ticket to Work and Work Incentive

Improvement Act (TWWIIA) were designed to improve work incentives for individuals with

disabilities. Expedited reinstatement of benefits, for example, made it easier for individuals who

lost entitlement to SSI or Social Security benefits due to work activity to return to benefit status

if work was stopped due to the same or a related disability. The increase in the extended period

of Medicare coverage permitted individuals who lost entitlement to Social Security disability

benefits due to work to retain Medicare for at least an additional 54 months beyond the period

specified in earlier legislation. The rules for Medicaid buy-in programs were liberalized to allow

individuals with higher income to be eligible, should states choose to adopt the higher limits. The

two changes in the Act that are most relevant to beneficiary control, however, were the Ticket to

Work (TTW) itself and the provisions requiring SSA to improve the information available to

beneficiaries on the effect of employment on their continuing eligibility for financial and health

care benefits.

The Ticket  The purpose of the TTW program is to provide eligible beneficiaries with greater

choice and control of the employment support services they need to assist them in obtaining

employment or returning to work. While the program remains in its infancy, results to date have

fallen short of expectations. SSA has contracted with Mathematica Policy Research (MPR) to

conduct a comprehensive evaluation of the TTW program. MPR released its initial evaluation

report in February 2004 (Thornton et al., 2004), with subsequent reports to be released annually

through 2007. The initial MPR report documented a number of key findings.

Beneficiary participation is low. As of August 2003, less than 1 percent of Ticket holders

had assigned their Ticket to an Employment Network (EN). (While the participation rate has

risen slightly since 2003, overall participation remains extremely low.)

Most Ticket assignments have been to state vocational rehabilitation agencies (SVRAs).

Since the launch of the TTW program in February 2002, the overwhelming majority (over 85

percent) of Ticket assignments have been made to SVRAs.

EN recruitment and retention is difficult. Recruiting and retaining ENs has been a

significant challenge for the TTW program.
66

EN Ticket assignments are concentrated among a few providers. Over half of all ENs

have not accepted any Tickets, although they have not disenrolled from the program. Over 80

percent of all ENs have accepted five or fewer Tickets.

EN financial viability is still uncertain. Results of MPR interviews with ENs indicate that

virtually all ENs report that they are losing money on their TTW operations. This finding is

corroborated through EN testimony to the Work Incentive Advisory Panel (WIAP) and the

U.S. Congress (Webb, 2004).

Providers complain about TTW marketing. Many ENs feel that SSA has done an

insufficient job in terms of marketing the program to beneficiaries.

TWWIIA identified four target groups that were anticipated to have a difficult time receiving

services under the TTW program: those who (1) need ongoing support and services, (2) need

high-cost accommodations, (3) earn a subminimum wage, or (4) work and receive partial cash

benefits. While evidence in this area is quite limited, it appears that individuals in these groups

have, to some extent, been able to assign their Tickets to state VR agencies, but are often viewed

as too costly or risky to be served by ENs that continue to struggle to maintain financial viability.

SSA has required that state VR agencies serving current Ticket holders automatically assign the

Ticket to the state VR agencies in most circumstances. In order to receive services from a state

VR agency, consumers must sign a form that outlines steps necessary to achieving their

vocational goals. Once signed by the beneficiary, this plan, called an individualized plan for

employment (IPE), will be sent to the program manager with a blank assignment form as a

Ticket assignment, even if the individual consumer involved has not been informed and has not

offered consent. This policy appears to clearly violate the principles of consumer direction and

choice that were the foundation on which the Ticket legislation was built.

SSAs Work Incentives Support Plan

SSA has developed several programs designed to enable beneficiaries to make informed choices

about work. Two programsarea work incentive coordinators (AWICs) and work incentive

liaisonsare internal to the agency. The other two programsProtection and Advocacy for
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Beneficiaries of Social Security (PABSS) and Benefits Planning, Assistance, and Outreach

(BPAO)provide services through agencies and organizations outside the agency. The purpose

of these combined programs is to provide work incentive planning and assistance to SSA

beneficiaries, conduct outreach efforts to beneficiaries who may be eligible for various SSA

programs, and provide advocacy services for individuals participating in SSA programs. Each of

these program components was described in Chapter 1. Two of the programs, WILs and BPAOs,

are discussed in further detail below.

Work Incentive Liaisons  An additional group of internal work incentive specialists has been

put into place in each SSA field office. These specialists, called WILs, serve as a primary contact

for beneficiaries, rehabilitation professionals, and agencies that work with people with

disabilities. WILs have been a valuable source of information regarding the work incentives. A

significant drawback to this effort, however, has been the limited amount of time and resources

that the WILs have been able to devote to their additional work incentive job assignments, given

their other job duties. Beneficiaries often report that WILs frequently change, making it difficult

to establish a working relationship with WILs who serve their specific geographic area. Problems

reported less frequently are that many WILs do not understand the work incentives and that some

are not even aware that they are considered WILs.

Benefits Planning, Assistance, and Outreach  TWWIIA authorizes SSA to operate a national

network of BPAO programs that are intended to provide beneficiaries with accurate and

complete information on the effects of employment or increased earnings on the status of their

cash benefits and health care coverage. Nationally, 114 BPAO organizations had provided

services to nearly 168,000 beneficiaries as of March 31, 2005 (VCU-BARC, 2005). Many types

of organizations are providing BPAO services. Centers for Independent Living (CILs) are

providing services in 52 communities, accounting for nearly half of all BPAO organizations.

Nonprofit community organizations, ranging from Goodwill Industries to mental health centers,

provide services in 21 locations. State vocational rehabilitation agencies operate BPAO programs

in 18 states. Other BPAO organizations include advocacy organizations (e.g., United Cerebral

Palsy), universities, and legal aid agencies (including protection and advocacy organizations).
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Of the 167,950 beneficiaries served by the BPAO programs to date, 49.2 percent are DI

beneficiaries, 28.4 percent are SSI beneficiaries, and 15.4 percent are concurrent beneficiaries.

Individuals with psychiatric disabilities (33.6 percent), system diseases (15.2 percent), cognitive

disabilities (8.9 percent), and non-spinal-cord orthopedic disabilities (8.9 percent) account for twothirds of all individuals served. More than 90 percent of the individuals who receive intensive

benefit support through the BPAO program are either employed or in the process of seeking

employment. Most are currently not working but have a desire to change their employment status.

Slightly more than half indicate that they are not employed but are actively seeking employment,

and nearly 30 percent fewer are currently employed part time, working less than 30 hours a week.

Less than 6 percent of intensive benefit support beneficiaries were employed full time, working 30

or more hours a week (Virginia Commonwealth University, 2005).

The impact of the BPAO programs on beneficiaries subsequent employment experiences cannot

be determined through currently available data. In 2003, the SSA Office of Quality Assurance

conducted a consumer satisfaction survey of beneficiaries served through BPAO programs.

However, the methodology employed in conducting the survey does not allow the results to be

used to examine program effectiveness. At the present time, SSA is considering various

approaches that can be used to conduct a rigorous evaluation of the program.

Use of Technology for Outreach and Adjudication  SSA has made significant improvements

in the use of technology for outreach and adjudication. The SSA Web site is rich with valuable

information and is fully accessible and well constructed. Though a strong indicator of SSAs

commitment to embrace technology, the effectiveness of this medium is limited because only a

small percentage of individuals with disabilities have readily available Internet access (National

Organization on Disability, 2000). Also, even though they are presented well, the SSA programs

themselves are still complex and confusing.

There have been other internal attempts to improve accuracy and accountability for the

adjudication of work issues. The Modernized Return to Work system and the Disability Claims

Folder were two such initiatives. Both offered better control of disability work reports. Personal

Computer Continuing Disability Review (PCCDR) was another initiative developed to assist
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Social Security claims representatives in adjudicating work issues in a timely and accurate way.

Recently, these three initiatives were rolled into EWORK, the software that Social Security field

office staff are required to use when adjudicating work issues. Although consumers themselves

do not access the software, the structure of the software creates a significant improvement in

accountability for work-issue processing. Instead of a paper trail, SSA now takes work reports

electronically. EWORK immediately sends a note to the field office with adjudicative

responsibility that the beneficiary has reported work. An electronic file accessible from all

agency locations is created, and reminders are sent to field office staff that the issue is pending.

In addition to the improvement in accountability, the EWORK system should improve

consistency in the adjudication of work reports because EWORK screens force claims

representatives to consider work incentives that may apply.

The EWORK system was rolled out over the last few months of 2004. With time, it should

improve information exchange among offices and should improve adjudication of Title II work

issues. Unfortunately, the system is completely separate from the SSI system; therefore, it is still

possible that a beneficiary who receives both Social Security and SSI disability benefits will

need to report work separately to Social Security and SSI claims representatives. SSA is in the

process of developing software to add to EWORK that will supplement the report of work,

routing it to individuals responsible for both SSI and Social Security disability adjudication at the

same time.

Recommendations for SSA Policy Change: Beneficiary Perspective and

Self-Direction

I think a system based on work incentives wont work; instead, there has to be a

system where people feel protected until they are truly comfortable with their

ability to sustain themselves through work. The system has to acknowledge the

cyclical nature of many disabilities and the difficulty most beneficiaries have

regaining any employment if they have previously lost employment. The

reason for work incentives seems to be the draconian results that occur without

them. Create a system less interested in terminating benefits  and work

incentives become much less necessary. Work incentives are the result of the

piecemeal approach that has been such a damaging part of these programs from

the beginning (James McCarthy, Director of Governmental Affairs, National

Federation of the Blind, November 2005).
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The lack of a comprehensive, beneficiary-directed system of supports creates enormous risks in

the lives of already vulnerable individuals. When an unsuccessful work attempt can have a

significant negative impact on an individuals financial and health status, it is unrealistic to

expect large numbers of beneficiaries to attempt to leave the benefit rolls. Congressional and

regulatory policymakers must design alternatives that are better at recognizing the financial risks

faced by beneficiaries. To address these concerns, Congress and SSA must address these

concerns through improvements in the delivery of customer service, modifications to the TTW

program, expansion of SSAs efforts to promote consumer choice, eradication of overpayments,

and the elimination of marriage penalties.

Recommendations Specific to Customer Service

Efforts to improve SSAs customer service will require a combination of improved architectural

and programmatic accessibility, changes to staffing patterns and work assignments,

enhancements to the role of work incentive liaison, continued improvements to SSAs automated

processing efforts, and increased outreach to SSA beneficiaries. Specific recommendations are

provided below.

SSA should develop and implement a plan to improve the architectural and programmatic

accessibility of SSA field offices. SSA offices need to be more sensitive to universal access

issues. SSA staff members need to be better informed, more available, and more sensitive to the

concerns and limitations experienced by beneficiaries who come to Social Security field offices.

An ongoing program on disability awareness should be provided to all frontline staff. Field

office interviewing space should be designed to provide better access for individuals with

hearing impairments and all disabilities. Using better sound barriers, for example, would

facilitate hearing and improve privacy.

SSA field office personnel functions, staffing patterns, and work assignments should be

redesigned to prioritize activities that assist beneficiaries attempting to work. The existing

system of work credits for field office employees should be modified so that employees

receive credit for the complex work involved in processing work reports and other postentitlement issues. SSA should make the WIL a full-time position in most large field offices,
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instead of merely an additional job duty for a staff member with many other responsibilities.

Liaisons should receive intense, ongoing training to ensure that they provide accurate and

complete information to beneficiaries attempting to use various work incentives to increase their

employment opportunities. In addition, SSA should significantly increase the number of AWICs

in the field. There are currently 58 AWIC positions, with one housed in each area office. AWICs

conduct public outreach on work incentives; provide, coordinate, and oversee training on SSAs

employment support programs for all local SSA personnel; handle some highly sensitive

disability work-issue cases; and monitor the disability work-issue workloads in their assigned

areas. Feedback from beneficiaries consistently indicates that SSA field office staff struggle with

correctly implementing the complex work support rules for beneficiaries with disabilities. If SSA

expanded the number of AWICs, it is reasonable to expect that more training and oversight could

be provided to improve this situation.

The effort to automate processing of work reports not only needs to continue but needs to

expand to coordinate work reports in the SSI and Social Security benefit programs.

Information transfer processes should be improved so that an individual who has reported a

change to one employee of SSA can be assured that the information reaches and remains

available to all necessary offices and staff members. EWORK, SSAs newest work-issue

adjudication software, should improve information processing, but greater efforts should be

made to improve communication and local office accountability for work-issue processing.

SSA should significantly improve outreach efforts to beneficiaries to inform them of the

existence, advantages, and reporting requirements of various work incentives. SSA should

work with beneficiaries and advocacy groups to be more creative in choosing outreach

mechanisms by providing materials in accessible formats and by sending direct mail contacts to

individuals reminding them of work incentives and the need to report changes and work activity.

Efforts should be specifically targeted to better reach individuals who do not have Internet access.

Recommendations Specific to the Ticket to Work Program

In order for beneficiaries to successfully leave the benefit rolls, they must be able to gain access

to the services and supports necessary to enable them to obtain and maintain satisfying
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employment. The TWWIIA legislation is an effort to provide increased access to employment

services and beneficiary control of their own careers. To fulfill this purpose, the TTW program

needs considerable modification. Specific recommendations to improve the TTW program are

provided below.

Congress and SSA should expand Ticket eligibility to include beneficiaries whose

conditions are expected to improve and who have not had at least one continuing

disability review; childhood SSI beneficiaries who have attained age 18 but who have not

had a redetermination under the adult disability standard; and beneficiaries who have not

attained age 18. The low participation rates during the initial implementation of the TTW

program make it essential that SSA continue to identify those individuals on the disability rolls

who are most likely to obtain and maintain employment for extended periods of time. It is

important to note that if Congress were to adopt this recommendation, there would be additional

costs associated with its implementation and, therefore, by Office of Management and Budget

rules there would be a requirement to provide an offset to pay for the change.

SSA should review and modify the TTW regulations to ensure that Ticket assignment

practices do not violate the voluntary nature of the program and beneficiary rights to grant

informed consent. One of the major goals of the TTW program is to offer options for

rehabilitation outside the traditional VR system. However, SSA regulations allow the state VR

agency to automatically assign a beneficiarys Ticket if the person is eligible for a Ticket at the

point that the beneficiary signs his or her individualized plan for employment (IPE). It is

essential that changes be undertaken in order for the program to succeed in its intended purpose.

SSA should design and implement a strong national marketing program that will expand

and intensify its efforts to inform beneficiaries about the TTW and other SSA programs.

The marketing program should allow SSA to inform beneficiaries about the TTW program at

least once each year. The program should also provide information to beneficiaries on the other

support services available to them in their local communities that can assist them in the pursuit of

their career goals.
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Recommendations Specific to Facilitating Beneficiary Choice

The SSA-funded network of BPAO programs has been highly successful in providing basic

information on SSA program provisions, work incentives, and employment services and supports

available to beneficiaries attempting to obtain employment. At the same time, the BPAO

program is limited in terms of the types of individuals that can be served and the types of

information that can be provided. The BPAO program currently lacks the capacity to adequately

supply information to all beneficiaries who need these services. The following recommendations

address these concerns.

The BPAO grant program should be elevated to an integrated federal grant-making

responsibility, combining resources and oversight from the Centers for Medicare and

Medicaid Services (CMS), Office of Special Education and Rehabilitation Services

(OSERS), Housing and Urban Development (HUD), and the Employment and Training

Administration (ETA). SSA must continue to engage RSA and its other federal partners in

dialogue to encourage them to jointly fund benefits counseling. Since these agencies all benefit

when individuals have access to accurate and complete information regarding the effect of

employment of benefits and health care, it makes sense that they participate in the purchase of

this service.

SSA should consider changes to the existing BPAO program to improve the accuracy and

quality of services provided to individual beneficiaries. SSA should immediately complete a

comprehensive evaluation of the BPAO program and implement program modifications based on

the evaluation results. The evaluation should focus specifically on efforts to promote quality

assurance and avoid conflicts of interest with BPAO provider agencies.

Recommendations Specific to Reducing SSA Overpayments to Beneficiaries

The problem of SSA overpayments to beneficiaries is very complex. To address this problem, SSA

should focus efforts on enhancing automated approaches to post-entitlement earnings processing,

centralizing the processing of post-entitlement earnings reporting, and informing beneficiaries of

their work-reporting responsibilities. Several recommendations are provided below.
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SSA should expand its efforts to increase the use of electronic quarterly earnings data and

automated improvements to expedite the processing of work activity and earnings that

affect eligibility and benefits. In doing so, SSA should adopt a uniform definition of wages for

both programs that bases the definition on when wages are paid as opposed to when they were

earned. In addition, SSA should simplify the process of estimating and verifying wages,

particularly for the SSI program, in order to reduce the effort expended by beneficiaries and SSA

in wage-accounting activities.

SSA should pilot the creation of centralized work Continuing Disability Review (CDR)

processing in cadres similar to PASS and special disability workload cadres. These units

might be staffed with CRs who have undergone training similar to the training provided to

AWICs. This approach would establish a specific unit as the single repository for earnings

information that could be held accountable for following up and processing the information

requested and received.

Congress should direct SSA to enhance its efforts to educate beneficiaries on reporting

requirements, the impact of wages on benefits, and available work incentives. Additional

options for reporting income by beneficiaries to SSA should be tested. Agency resources should

be directed toward monitoring the extent to which SSA district offices are providing receipts to

beneficiaries for reported income. Finally, program rules governing overpayments should be

changed to substantially limit liability for repayment of benefits in situations where beneficiaries

have reported earned income consistently to SSA as required by law.

Recommendations for Eliminating the Marriage Penalty

SSI beneficiaries should be allowed to make choices regarding their marital status without regard

to the effect of their actions on their benefits and health care. The following recommendations

address this concern.

Congress and SSA should undertake a complete review of the SSI program and make

program modifications that eliminate the financial disincentive to marriage inherent in the

present program. The drop in available SSI income places eligible couples even further below
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the poverty line than they are as unmarried individuals. The risk of terminating a spouses

Medicaid creates a huge disincentive for members of an eligible couple to work. In addition,

continued Medicaid protection should be extended to both members of an eligible couple when

the earnings of either member causes the loss of SSI.

Congress should amend the current Title XVI disability legislation to modify the manner in

which 1619(b) eligibility is applied to eligible couples. Given the intent of the 1619 provision

to provide a safety net to beneficiaries in ensuring continued access to health care, a member of

an SSI eligible couple who is not working should not be penalized with the loss of Medicaid as a

result of his or her spouses work activity. Access to continued Medicaid for the nonworking

member of the eligible couple could be provided through 1619(b), based on amended eligibility

criteria, or through the establishment of a separate protected status group.

Summary

The SSA disability system was originally developed for individuals who left the workforce with

the expectation that they would never return. However, the rapid pace of medical advances,

improved societal attitudes, and an increased focus on rehabilitation now allow many

beneficiaries who previously would have been permanently excluded from the workforce to

engage in full- or part-time employment. Congress and SSA must understand that beneficiaries

who attempt to obtain and maintain employment face many challenges and often view the

decision to work as endangering their ability to pay for their basic needs and maintain access to

health care. To assist these individuals, Congress and SSA must ensure that beneficiaries receive

high-quality customer service and have access to accurate and complete information that will

enable them to make informed career choices. They must be able to access appropriate and

effective employment services and supports. They must be assured that their attempts to obtain

employment will not lead to large overpayments that may further jeopardize their economic selfsufficiency or jeopardize their ability to access health care services. Finally, SSAs disability

program regulations should never create situations in which beneficiaries are penalized because

of their desire to be married.
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Chapter IV: Income Issues and Incentives

Gary is 32 years old and has been receiving SSI and DI benefits since he was 26,

when he applied for and was granted disability status by SSA. Garys DI benefits

are relatively low because he had a limited work history before he was granted

disability benefits, so he also qualifies for SSI benefits. Gary has worked several

times since becoming disabled, and he says, The last time I went to work I held

my job for nearly eight months. After I stopped working, I got a letter from SSA

telling me I had been overpaid about $700 and underpaid about $250. It was the

most bizarre thing I had ever seen. Some of my friends tell me I can earn as much

as I want for a year without my benefits being cut, and another friend says I can

only earn about $800 a month. This whole thing makes my head want to explode!

Gary understands that he has two different benefits and that the rules differ for each

one, but he does not want to owe the government any money. He decided to turn

down a small inheritance from his aunt because it would have made him ineligible

for Medicaid. Instead, he asked his mother to keep the money and pay for a college

course for him. I want to be rid of Social Security benefits, but I cant make up

what I get in cash and medical benefits until I get more training. Since I got that

notice about how I owed the government money, Im afraid to do anything!

Introduction

Social Security Administration disability benefits programs (Disability Insurance and

Supplemental Security Income) are characterized by a plethora of complex rules governing how

various forms of income and assets are treated in terms of benefit eligibility and payment

amount. Both disability programs make a significant distinction between income that is earned

(i.e., received in exchange for work effort or as remuneration for work performed) and unearned

(i.e., all other income that does not meet the definition of earned income or wages). In addition,

the SSI program imposes resource limits and includes a wide range of regulations that define

which resources count and under what circumstance they count, as well as numerous citations

detailing a host of specific income exclusions. The manner in which SSA treats these various

forms of income and resources has a significant effect on the behavior of beneficiaries. The rules

may serve to either encourage or reinforce behavior or to punish or decrease behavior. The

manner in which these rules influence efforts by beneficiaries to attempt employment is the

particular focus of this chapter.
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The myriad problems related to the DI and SSI income and resource rules and their impact on

beneficiaries decisions about work have been acknowledged repeatedly by beneficiaries,

scholars, advocates, and disability policy specialists for many years. The following sections will

examine several of the most persistent problems in both the DI and SSI programs in terms of

how income and resources are counted, describe the efforts SSA has made to date to resolve the

problems, and offer specific recommendations for the future.

The Problem

Employment Disincentives in the Disability Benefit Programs

The single most significant disincentive to employment in SSA disability programs is the sudden

loss of cash benefits as a result of earnings above the substantial gainful activity (SGA) level for

Title II disability beneficiaries. While disincentives remain in the SSI program, the way earned

income is treated by this program is, for the most part, quite positive. SSI earned income rules

encourage work by providing increased financial well-being through employment and continuing

Medicaid coverage under the 1619(b) provisions. It is only in rare circumstances that an SSI

recipient does not come out ahead by working. This is definitely not the case in the DI program.

The primary eligibility criterion for DI benefits focuses on the verification of a medical condition

that will result in death or has lasted or can be expected to last for at least 12 months, and which

results in an inability to work at a substantial level. In effect, if the applicant is able to work at

a substantial level (as defined by SSA), the person is not eligible for benefits, regardless of the

persons medical condition. SSAs definition of work in this context is SGA, which is defined

as the value of a persons work expressed as a monthly dollar figure. For FY 2005, the SGA

guideline is set at countable gross earnings of $830 per month.

Unlike the work incentives offered to SSI recipients, which allow for a gradual reduction in cash

benefits as the recipients earnings increase, the DI program operates in an all-or-nothing

fashion. The effect of earned income on DI benefits consists of a complex set of work incentive

phases, with the end result being loss of cash payments if and when countable gross earnings

consistently exceed the SGA guideline. During the first work incentive phase, known as the trial

work period (TWP), beneficiaries are permitted to retain benefits regardless of how much is
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earned. TWP months occur whenever gross earnings exceed the current TWP guideline, which is

$590 for FY 2005. The TWP ends when nine months of TWP-level employment are

accumulated within a rolling 60-month period. When the TWP ends, beneficiaries move into the

second phase of work incentives, known as the extended period of eligibility (EPE). During this

36-consecutive-month period, beneficiaries retain full benefits until SSA determines that the

person is demonstrating SGA-level work. If this level is determined while the beneficiary is in

the EPE, benefit payments are due for any month that earnings fall below the SGA guideline.

When a pattern of SGA-level work is demonstrated, beneficiaries are permitted a third work

incentive phase, known as the grace period. This allows the beneficiary to retain full benefits for

the first month SGA-level work occurred and two following months for a total of three

consecutive months. After the EPE ends, the beneficiary may be terminated from the DI program

if earnings continue to remain above the SGA guideline. If the grace period is used up during the

EPE and the beneficiary subsequently ceases employment or earns less than SGA, benefit checks

may resume. However, if the grace period is used up, after the EPE is over, a single month of

SGA-level work may cause termination of benefits. The manner in which DI benefits cease

entirely when earnings reach the SGA level is often referred to as the cash cliff.

Studies show that far less than 1 percent of DI beneficiaries return to work and earn at substantial

wages (Gerry, 2005). Many benefits experts, as well as the U.S. Government Accountability

Office (GAO), have suggested that this cash cliff that creates a clear disincentive to work for

most DI beneficiaries (GAO, 1996a; Sheldon and Trach, 1998; National Council on Disability,

1997a; ODay, 1999). SSA has made an effort to lessen the negative impact of the cash cliff

effect by indexing the SGA level annually (starting in 2001); allowing exclusions from countable

gross earned income, such as impairment-related work expenses (IRWEs) and subsidies; and

averaging earnings over a period of months and allowing short-term unsuccessful work attempts

(UWAs). However, many beneficiaries continue to choose not to work for fear of benefit loss, or

intentionally suppress their earnings under the SGA amount in order to retain their full DI cash

benefit and program eligibility (LaPlante, Kennedy, Kaye, and Wenger, 1996).
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It is not at all surprising to discover that beneficiaries are suppressing earnings in order to retain

benefits. The SSA definition of substantial work and the SGA earnings guidelines are

generally too low in relation to benefit payments, creating a major disincentive to working above

the SGA level. Although many DI applicants and beneficiaries might be able to maintain

employment at or marginally above the SGA level, this level of income is often NOT sufficient

to replace the full DI payment. The average monthly DI payment in 2004 was $895 (SSA,

2004a), while the SGA guideline was $810. The combination of average cash payments plus

earnings means that a beneficiary would have to earn, on average, $1,720 per month to replace

the income received by working at just below the SGA level. If the DI beneficiary receives

additional cash benefits for dependent family members (what SSA terms auxiliary benefits),

the point at which a beneficiary breaks even when he or she earns more than SGA is even greater

than $1,720 per month. It is very difficult for individuals to earn enough to replace the amount of

their lost DI cash benefit, even though the SGA amount increases every year. In addition, the

SGA guideline is measured by gross earnings, not net wages received after taxes, and does not

account for the additional expense and effort incurred by working. Unless a beneficiary can get a

job that pays more than the DI benefits paid to the family after all deductions and expenses are

accounted for, there is little or no financial incentive to work above SGA.

This effect is even more pronounced for people with the highest benefit payments and those with

the least ability to earn wages comparable to the DI payment. For a significant number of DI

beneficiaries, a greater financial outcome would be achieved by working part time below the

SGA level while still retaining full DI benefits and Medicare. Return-to-work strategies

attempted by SSA will only be effective if and when the applicant is convinced that working will

be of greater financial benefit than not working. Individuals stop participating in the labor force

when they decide that the benefits of working or seeking work no longer outweigh the costs of

doing so. Benefits include wages and health insurance as well as nonfinancial benefits such as

personal satisfaction and socialization. The costs of working include the effort involved to

perform the job, commuting time, cost of clothes and other work expenses, and intangible factors

such as frustration or conflict with co-workers and supervisors. A major cost is the value of the

activity forgone while working; that is, whatever benefits the person would have derived from

whatever activity they could have done instead of working.
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In summary, until the DI rules are changed to make work truly pay, many beneficiaries will

continue not to work or will choose to work part time and earn less than the SGA level.

Complex Rules Govern the Effect of Income on Disability Benefits

The complexity of the SSA rules creates significant disincentives to employment for both DI and

SSI beneficiaries. First, the series of work incentive phases inherent in the DI program

including TWP, EPE, cessation month/grace period, and SGA determinations, in combination

with the methods for reducing countable income through IWREs and subsidiesis simply too

much to expect a beneficiary to understand or negotiate. The sheer complexity of the work rules

causes beneficiaries to be leery of paid employment. When beneficiaries cannot readily

comprehend nor predict exactly what will happen when work is attempted, the result is that work

is forgone entirely or, at best, minimized. The perceived risk is simply too great. While the

advent of BPAO services authorized by TWWIIA is a positive step forward, the fact remains that

the DI program is just too complicated.

Second, while the work rules for the SSI program are relatively simple compared with those for

the DI program, the rules governing unearned income and resources are also incomprehensible

for many beneficiaries, their families, and advocates. When one examines the rules for concepts

such as deeming, in-kind support and maintenance, countable resources, and the many resource

exclusions, it is clear that the average untrained layperson has little or no chance of

understanding or applying these rules without expert assistance. Beneficiaries often feel

overwhelmed by the application of SSA regulations that they view as arbitrary and irrational.

The more insecure beneficiaries feel about how their behavior will affect benefit payment

amounts or eligibility, the less likely they are to risk anything that may cause problems.

It is unfortunate that attempts by SSA to address the employment disincentives in the DI and SSI

programs often add to the complexity of program rules. Rather than stripping the programs back

to the original core premises and starting over with a simplified framework, SSA makes

incremental changes by adding more exclusions, incentives, deductions, credits, and waivers.

The rules become more and more intricate and the behaviors we intend to reward occur less and

less often as people become unable to deal with the ever-increasing complexity and confusion.
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It is important to note that one of the primary reasons for the complexity in current SSA

regulations is the regulatory environment in which SSA currently operates. Major changes to the

existing system proposed by SSA as a way to provide greater incentives to employment and

promote economic self-sufficiency usually incur costs that must be paid for by offsets. It is

important to note that any change proposed by SSA, such as the elimination of the 24-month

Medicare waiting period, is strictly bound by Office of Management and Budget (OMB) rules

that require identified offsets in other program areas.

Harsh Income and Resource Limits Create Barriers to Employment

Social Security DI benefits are a form of insurance funded from the Social Security Trust Fund

that beneficiaries (or their parents) have contributed to through FICA deductions. For this reason,

entitlement for DI benefits is based on becoming an insured worker rather than on a financial

means test, other than countable earnings under the current SGA guideline. DI beneficiaries may

accumulate unlimited assets or resources, and may supplement their SSA benefit with most

forms of unearned income without suffering any adverse impact on DI eligibility. (There are

some exceptions when the unearned income is a form of public disability benefit.) For most DI

beneficiaries, the ability to save money and accumulate assets is unimpeded by SSA rules.

In stark contrast, SSI is a federal welfare program financed through general income tax funds.

SSI is a means-tested program with limits on both income and resources. SSI recipients risk loss of

both cash benefits and Medicaid if countable unearned income exceeds the current federal benefit

rate ($579 in FY 2005) and/or countable resources exceed $2,000. ($3,000 is permitted for an SSI

eligible couple in which two SSI recipients are married to one another.) Earned income is treated

more favorably due to the 1619(a) rules that permit earnings to exceed the SGA limit and the

1619(b) extended Medicaid provisions that permit eligible recipients to earn up to their state

threshold amount (and, under certain circumstances, up to an individualized threshold amount)

before SSI eligibility and Medicaid are lost. Furthermore, if the income and resource limits are

exceeded for more than 12 consecutive months, the individual is fully terminated from the SSI

program and must complete the initial application process again in order to reestablish entitlement.
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While the resource limits of $2,000 for an eligible individual and $3,000 for an SSI eligible

couple have not increased since 1989, the SSI program does offer various exclusions to the

income and resource rules that allow for some limited asset accumulation. For example, SSI

excludes one home of any value as long as the SSI recipient resides in it. In addition, SSI

recipients are permitted to own unlimited property essential for self-support (PESS). This

includes equipment, real property, or cash accounts that are part of a business for someone who

is self-employed. SSI also permits recipients to own one vehicle, which may be of any value if it

is needed to get to and from medical appointments or a job, or is modified to accommodate the

recipients disability. It is interesting to note that SSA only allows one house and one vehicle for

an eligible couple, which SSA defines as two SSI recipients married to each other. This is one of

several marriage penalties built into the income and resource rules for the SSI program and

described in detail in Chapter II.

In addition, SSI recipients may use a work incentive known as a Plan for Achieving Self-Support

(PASS) to save money or set aside income in order to pay for things needed to attain an

occupational goal. Funds set aside under an approved PASS do not count when SSI eligibility

determinations are made or when SSA is determining the SSI benefit amount. Unfortunately, few

SSI recipients are aware of even the most basic income and resource exclusions described above.

Work incentives such as PASS and PESS are long-standing provisions in Social Security policy,

but they remain relatively unknown and underutilized.

States have the option to supplement cash benefits to SSI beneficiaries. The option is designed to

alleviate poverty and is frequently applied to accommodate the higher cost of living particular to

a state or locale. When implementing the state supplement option, states have the right to set

their own limits on resources and are not bound to the SSI limit. For example, although federal

SSI policy allows $2,000 in countable resources, recipients could be held to a lower resource

limit of $1,500 in order to receive the state SSI supplement.

There are additional income and resource tests that individuals must meet to maintain eligibility

for optional Medicaid waiver programs, as well as the special extended Medicaid coverage

provided to certain former SSI recipients, and the Medicare savings programs in which Medicaid
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pays for Medicare premiums, co-payments, and deductibles. All of these programs have their

own unique rules governing income and resource limits for eligibility. Furthermore, some states

levy a share-of-cost or patient liability for Medicaid recipients in optional categories of

coverage whose countable income is over specified limits. This means that a portion of the

individuals income has to be paid back to the state Medicaid agency to offset the cost of care

provided. Needless to say, understanding these diverse sets of rules is impossible for most

individuals with disabilities, their families, or agency personnel. In some cases, individuals

simply choose not to rock the boat by working in order to avoid any chance that essential

Medicaid eligibility could be lost, or patient liability could be charged. This is particularly

frustrating for DI beneficiaries, who are not limited in asset accumulation by SSA but are

penalized by the state Medicaid agency due to participation in the home and community-based

services (HCBS) waiver program or inclusion in institutional waiver programs for persons with

mental retardation/developmental disabilities. In order to retain the Medicaid-funded services

that may make community participation possible, the individual must choose to forgo most forms

of asset accumulation.

Individual development accounts (IDAs) have been a recent response to the inadequacy of

income support and means-tested benefit programs to help the poor. IDAs are time-limited

matched savings accounts for eligible low-income workers for the purposes of saving for a first

home, college, or for starting or growing a business. These programs are currently authorized

under the Welfare Reform Act of 1996 and the Assets for Independence Act (AFIA). While

employment is certainly a critical pathway to self-sufficiency, Sherraden (1995) argues that

people move out of poverty by saving and investing, not by income generation alone.

However, evidence suggests that people with disabilities are underrepresented in the

population currently aided by IDAs. In addition, the earned income tax credit frequently

complements IDA programs, but these are also assumed to be relatively underutilized by

persons with disabilities. At the present time, no data systems are available that track variables

such as disability in the use of incentives such as IDAs or the EITC. SSA has recognized the

importance of asset accumulation through IDAs and currently allows IDAs funded under the

Welfare Reform Act and AFIA to be excluded as countable resources in the SSI program. In
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addition, the Youth Transition Demonstration Initiative funded by SSA includes additional SSI

waivers for other IDA programs.

Many New Beneficiaries Who Could Work Delay Employment Out of Fear of

Benefit Loss

As discussed in Chapter III, the definition of disability contained in the Social Security Act is

inextricably linked to the inability to perform work at the Substantial Gainful Activity level SGA

level. SSA further defines disability in terms of meeting a duration requirement. This means

that the inability to engage in SGA-level work has to have already lasted for at least one year or

is expected to last for a continuous period of at least one year or is expected to result in death (20

CFR 404.1503). Because of this duration requirement, individuals who return to work at the

SGA level within 12 months of when their disability began may risk losing entitlement, since

they would fail to meet SSAs definition of disability. As the regulations presently stand,

individuals with disabilities who attempt to work soon after disability onset incur the greatest

risk of being found ineligible for Social Security disability benefits. This is an unfortunate

situation, since individuals who are recently disabled have the strongest attachment to the

workforce and thus are most likely to be successful in returning to work. Research in the field of

disability management (DM) suggests that the longer ill or injured employees stay out on

disability leave, the less likely they are to ever return to work (Sun Life Financial, 2001).

There are regulations under both the DI and SSI programs to protect the benefit eligibility of

some individuals who return to work soon after disability onset. In the DI program, individuals

who have completed the initial five-month waiting period required before benefit payments may

begin and who have received notification of benefit award are afforded the protection of the trial

work period (TWP). The rules related to meeting the disability duration requirement and

governing the circumstances under which working at SGA soon after disability onset cause

ineligibility are very complex. Because of this complexity and perceived risk, beneficiaries are

fearful of attempting to work while in application status or for several years after benefits are

awarded. In some cases, this fear persists indefinitely, since beneficiaries become convinced that

any work effort will be interpreted as improvement in medical condition that may cause

termination. In earlier times, this was actually a legitimate concern, since evidence of work
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activity at any level was viewed by SSA as a potential indication of medical recovery and was

used as a rationale for initiating a full medical review. While TWWIIA changed the rules so that

work activity alone could not be used as a basis for initiating a medical review, this provision

only applies to DI beneficiaries who have been entitled for at least two years. Once again, these

rules discourage beneficiaries from trying to reenter the workforce soon after becoming disabled

or immediately after becoming entitled to benefits. Policies of this type, which serve to delay

work attempts, are counterproductive, since extended absence from the workforce creates a

separation from the habit of work, entrenches a disability mindset, and allows preexisting work

skills to deteriorate or become obsolete.

Delays in Accessing Health Insurance and Risk of Losing Health Insurance

Once Obtained

DI beneficiaries who are newly eligible for benefits are not entitled to Medicare until they have

completed a 24-month qualifying period. If those individuals receive DI or disabled widow(er)s

benefits, they must serve an additional five-month waiting period before the qualifying period

begins. This means that a total of 29 months must pass from the initial eligibility for DI benefits

until Medicare coverage may begin. In contrast, individuals who are determined eligible for SSI

must be eligible for benefits for only one month in order to qualify for Medicaid in most states.

In the 11 states that adopted slightly more stringent rules for Medicaid than the SSI income and

asset rules (known as 209(b) states), most SSI beneficiaries need only apply to county Medicaid

agencies to receive health coverage as soon as SSI entitlement is established. States that exercise

the 209(b) option are Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New

Hampshire, North Dakota, Ohio, Oklahoma, and Virginia. Having necessary medical supports in

place permits beneficiaries to manage their disabilities more effectively, making it easier to

contemplate a return to work. Having to wait for those supports, as under the DI program, further

separates beneficiaries from the workforce.
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Previous Attempts by Congress and SSA to Impact Income Issues and

Incentives

SSA is aware that its own internal rules and regulations governing the treatment of income and

resources act as a barrier to employment for DI/SSI beneficiaries. Over the past decade, several

attempts have been made to change the rules to encourage paid employment. These efforts are

delineated below.

Efforts to Lessen the Impact of the SGA Cash Cliff

During the past 15 years, SSA has taken several steps to diminish the disincentives surrounding

SGA determinations. In 1990, SSA implemented a change in program rules that increased the

level of gross earnings that constitute SGA from $300 to $500 a month. This change resulted in

limited improvement in the system, given that the $200 increase accounted solely for growth in

wages since 1980, when the SGA level had last been adjusted. A second proposed rule change in

1990, which was not implemented, was a plan to index the SGA level to average wage growth in

future years. The failure to implement such an index was particularly damaging in view of the

subsequent increase in the federal minimum wage level. Subsequent program rule changes

resulted in a further increase of the SGA guideline to $700 in July 1999; finally, in January 2001,

a major regulatory change provided for an annual adjustment of the SGA guideline to reflect

wage growth. While the increases in the SGA guideline are positive, they have not corrected the

fundamental problem. As discussed at length previously, it is still of greater financial benefit for

many DI beneficiaries to retain full DI payments and hold earnings under the SGA guideline.

Until SSA is able to correct this defect in the system, relatively few beneficiaries will choose to

work at a level that would cause termination. As long as beneficiaries who perform SGA and

lose cash benefits are worse off financially than those who do not work or those who earn less

than SGA, little progress will be made.

Another reason beneficiaries choose not to engage in employment above the SGA level is a

prevailing belief that DI benefits will not be available again if they are needed at a later date.

TWWIIA created a new work incentive called expedited reinstatement (EXR) of benefits to

make it easier for former beneficiaries who were terminated from the DI/SSI program due to
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excess earned income to come back into the disability program without having to fully reapply.

This provision was enacted in 2001 and was designed to alleviate the fear of sudden and

permanent detachment from the DI program. It is clear, however, that beneficiaries continue to

worry about losing their connection to the program, and this fear continues to have an effect on

work activity.

TWWIIA also requires the Commissioner of SSA to implement research demonstrations using

various models for sliding scale benefit offsets designed to ameliorate the disincentives posed by

the DI cash cliff. While the regulations governing the $1 for $2 offset demonstration have been

published, the cash benefit offset pilots have not begun as of this report (Federal Register, April

14, 2005). The Ticket to Work and Work Incentives Advisory Panel (2002) has supported and

recommended the implementation of $1 for $2 benefit offset pilot projects and has provided

extensive recommendations for the conduct of such demonstrations.

Efforts to Allow Increased Asset Development

PASS and PESS are important, long-established work incentives that allow SSI beneficiaries to

accumulate income and/or resources without risking loss of benefits while working toward a

future occupational goal or maintaining self-employment and small business ownership.

However, PASS and PESS are relatively unfamiliar to SSA personnel and service provider

agency staff, as well as beneficiaries. In order for these programs to have any widespread or

lasting impact, SSA needs to embark on a major public awareness, outreach, education, and

technical assistance campaign. In addition, these programs preclude savings for nonemployment-related purposes and are perceived as being complex and bureaucratic in nature.

SSA has also been increasingly interested in the use of individual development accounts (IDAs)

as a method for helping beneficiaries accumulate assets while retaining eligibility for SSI and

Medicaid. IDAs are temporary matched savings accounts designed to assist low-income workers

in buying a first home, starting or growing a business, or attending postsecondary education

(Sherraden, 1995). To qualify for the program, individuals must meet one or more of the

following eligibility definitions:
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Eligible for Temporary Assistance for Needy Families (TANF);

Eligibility for earned income tax credit (EITC); or

Earnings at or below 200 percent of poverty.

IDA program features include regular minimum deposits from earnings in IDA savings accounts

later matched with IDA match funds for a temporary period of time. For example, for every

dollar of earned income saved, a participant may receive the equivalent of $2 in matching IDA

funds at the time of an asset purchase (e.g., tuition payment, down payment on a home, inventory

for a business). AFIA and local programs set minimum deposit standards and maximum match

thresholds (e.g., $25 per month and matching contributions not to exceed $2,000 per person).

Other program features include regular financial education, asset-based training, and other

components that are unique to local programs. In March 2003, SSA incorporated several changes

to the treatment of assets in SSI: (1) disregarding retroactive payments of DI and SSI benefits;

(2) earned income tax credits; and (3) child tax credits for a period of nine months following the

month the payment was received (SSA POMS SSI 00830.670). Furthermore, personal savings

from income that are deposited in AFIA-funded IDA accounts are excluded from SSI resource

tests and are excluded from countable income in SSI definitions, which may mean (a) the

maintenance of SSI benefits, (b) qualification for cash benefits among former 1619 eligibles, or

(c) increasing cash payments while building temporary savings for later reduced dependency on

SSI. In 2001, SSA incorporated the provision of IDAs consistent with the AFIA in the Balanced

Budget Act and Workforce Investment Act. This provision excludes savings and matching funds

in AFIA-eligible accounts from resource tests in SSI, TANF, Food Stamps, and Medicaid

(Sweeney, 2004; Corporation for Enterprise Development, 2004).

Despite these changes, the number of people with disabilities who are accessing the programs is

unknown. While it is suspected that people with disabilities are accessing IDA programs, EITCs,

and child tax credits, few hard statistics are available. Demonstration projects sponsored by SSA

and the National Institute on Disability Rehabilitation and Research (NIDRR) are in the

formative stages of advancing the application of IDAs among youth and adults with disabilities,

including the incorporation of benefits planning and work-incentives counseling. Anecdotal

evidence suggests that the current infrastructure is inadequate to meet the needs of persons with
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disabilities and community-based programs. For example, nonprofit community development

corporations are largely unfamiliar with accommodation needs, universal design concepts, and

the availability of resources within the community-based service systems and VR. Furthermore,

IDA matching funds, as well as operating resources, are inadequate and are only in the

exploratory, conceptual stages for the integration of skill sets and resource leveraging necessary

to augment services.

Recommendations for SSA Policy Changes: Income Issues and Incentives

The following sections highlight recommendations for change that, if implemented, would

remove barriers to employment currently caused by the treatment of income and resources in the

DI and SSI programs.

Recommendations for Easing the SGA Cash Cliff for DI Beneficiaries

Congress should modify the current Title II disability legislation to eliminate SGA as a

post-entitlement consideration for continued eligibility for Title II disability benefits. Under

the current DI rules, substantial gainful activity continues to be a primary factor not only in

establishing initial eligibility but also in maintaining eligibility after benefits are awarded. The

policy premise that SGA defines inability to work has a detrimental impact on a beneficiarys

motivation to go to work and conveys a mixed message about employment and continuing

entitlement to SSA benefits. In a system in which disability takes on a meaning other than

inability to work, SGA should be abandoned as a primary standard for continued benefit

eligibility once initial eligibility for the DI program has been established. It is recommended that

the current system be changed to allow DI beneficiaries who work to retain their beneficiary

status and access to benefits in spite of earnings over the current SGA guideline.

Congress should modify the current Title II disability legislation to provide for a gradual

reduction in DI cash benefits based on increases in earned income. Unlike SSI, under current

program rules there is no provision for a gradual reduction in the DI cash benefit as earnings

increase. Instead, a Title II beneficiary will either receive the full cash benefit in a given month

or no income support at all. DI program rules should be amended to provide for a gradual
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reduction in cash benefits once earnings exceed an established earned income disregard level. To

minimize complexity and confusion for beneficiaries, it is recommended that the earned income

disregards and exclusions be comparable to those currently in place in the SSI program.

Additionally, any gradual reduction in the beneficiarys DI benefit should also be applied to

dependent beneficiaries (dependent children and spouses) or the disincentives will remain for

beneficiaries with dependent family members. Elimination of the SGA cash cliff coupled with a

gradual reduction in cash benefits as earnings increase will provide an incentive for employment

by ensuring an overall positive financial outcome for DI beneficiaries. These program changes

would have the added benefit of eliminating the need for labor-intensive tracking of trial work

periods, extended periods of eligibility, SGA determinations, and assessments of special

conditions, such as job coaches.

Congress should modify the current Title II disability legislation to establish a system of

continuation of program eligibility for DI beneficiaries through the creation of a

beneficiary nonpayment status. The current DI benefit system consists of a complex set of

work incentive phases with the end result being loss of cash payments if and when countable

gross earnings consistently exceed the SGA guideline. In addition, once the EPE ends,

beneficiaries lose their connection to the program if earnings continue to remain above the SGA

guideline. In addition to the elimination of the post-eligibility SGA criteria and implementation

of a gradual benefit reduction, program rules should be amended to provide for a continuation of

beneficiary status when cash benefits are ultimately lost due to earnings. Similar to SSI

beneficiaries in 1619(b), DI beneficiaries with earnings in excess of allowable limits should

retain beneficiary nonpayment status, providing for immediate reinstatement of benefits should

earnings be lost or reduced at a later time.

Recommendations for Reducing Restrictions on Assets for SSI Beneficiaries

Congress should direct SSA to develop and test program additions and regulatory

modifications that will enable SSI beneficiaries to accumulate assets beyond existing limits

through protected accounts and other savings programs. While PASS and PESS work

incentives allow for accumulation of assets related to self-employment or achieving a future

occupational goal, they are too limited and do not allow beneficiaries to save for other non-
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employment-related goals. IDAs, EITCs, and other alternative savings programs allowed under

many state Medicaid buy-in programs must be explored. Policies should be crosscutting in

nature, leveraging and augmenting resources, services, and outcomes for employment and

health-care-related programs.

SSA should change current program rules and work with other federal agencies to modify

and expand the value of IDA programs for SSA beneficiaries. To expand options and

availability for beneficiaries, current SSI program rules should be amended to extend the

exclusions that currently apply to TANF and AFIA IDAs to other state and local IDA programs.

In addition, while homeownership and educational goals are important, using savings for things

such as assistive technology, automobiles, home repair, transportation, and other purposes should

be explored. Home repair is particularly noteworthy given the decline in affordable housing

stock. IDAs for home repair may enable home accessibility options otherwise unaffordable to a

beneficiary. Finally, shorter, more immediate savings outcomes are frequently effective for

reinforcing positive money management practices and personal responsibility.

SSA should work collaboratively with other federal agencies to expand benefits counseling

services to include the full range of financial education and advisement services.

Beneficiaries must have the information, incentive, and resources necessary to make informed

decisions about their financial goals and planning. In so doing, it is important that train-thetrainer models be sponsored so that the infrastructure is established to increase capacity to

provide financial advisement services over time.

Recommendations for Improving Access to Health Care for DI Beneficiaries

Congress should modify the current Title II disability legislation to eliminate the Medicare

24-month qualifying period for DI beneficiaries. Providing critical health insurance as quickly

as possible after disability onset may act to stem the progression of disability over time and

encourage beneficiaries to better manage their illnesses or disabilities. With the addition of the

prescription drug coverage available as of January 2006 through the Medicare Modernization

Act, this recommendation becomes even more important.
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Recommendations for Decreasing the Complexity of the DI/SSI Program Rules

Governing Income and Resources

Congress should direct SSA to simplify regulatory earnings definitions and wage

verification processes so that they are consistent across the SSI and DI programs. SSA

should pursue consistent and simplified rules for defining earnings and treatment of earned

income across the SSI and DI programs. Such a change will not only reduce confusion among

beneficiaries but also will also reduce the current administrative burden on SSA in the

verification and benefit adjustment process.

Congress should direct SSA to modify regulations related to the treatment of earnings in the

DI program by applying the same rules currently applied in the SSI program. Specifically,

based on a gradual reduction in DI cash benefits, current SSI rules governing the treatment of

earnings used to pay for work-related expenses under impairment-related work expenses (IRWE)

and blind work expenses (BWE) should be applied in the same manner to the DI program. This

will allow beneficiaries to recover some, or, in the case of BWE, all of the cost of work-related

expenses in an equitable manner regardless of the type of disability benefit received. Applying

these work incentives in the same manner will also minimize confusion for beneficiaries.

Summary

In an effort to encourage employment for beneficiaries, Congress and SSA have made legislative

and regulatory changes in the DI and SSI programs over the past 30 years. The work incentives

that have resulted from these changes are aimed at reducing the risks and costs associated with

loss of benefit support and health insurance when a beneficiary is employed. Despite these

efforts, significant disincentives to employment in the Social Security disability benefit programs

persist. For example, while the Section 1619(a) and (b) provisions encourage work by providing

increased financial well-being and continued access to Medicaid, SSI beneficiaries continue to

face a system of complex rules regarding the treatment of income and resources and their effect

on continued benefit eligibility and payment amount. The disincentives to employment for DI

beneficiaries are even more pronounced, given the risk of benefit loss and reduction in overall

net income as a result of work at the SGA level.
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Beneficiaries must carefully consider the risk factors involved when weighing the uncertainties

of success in employment against the relative security of benefit support. To be effective in

encouraging employment, the SSI and DI programs must be amended to provide incentives and

supports to beneficiaries on a number of levels. Congress and the Social Security Administration

must take necessary action to remove the financial disincentives, particularly in the DI program,

to ensure that work pays. Changes to current program rules must likewise be pursued to enable

beneficiaries to maintain a connection to the benefit programs over time. Finally, the complexity

of the program rules governing income and resources must be simplified and the availability of

benefits counseling services expanded through collaborative efforts across federal agencies.
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Chapter V: Coordination and Collaboration Among Systems

Jane is 54 years old and has multiple sclerosis (MS). She worked all of her adult

life in secretarial or administrative support positions, but finally had to stop work

due to her disability at the age of 52. She went on her employers long-term

disability benefits, but both her doctor and the insurance case worker encouraged

her to apply for Social Security Disability Insurance (DI). Janes employer did not

discuss any return-to-work options with her or offer her the option of working a

lighter schedule or moving to part-time employment.

Janes DI benefits began 10 months after she applied. At the time, she had private

health insurance through her husband, but she was divorced shortly after getting

on DI benefits. Jane could not afford the COBRA coverage available through her

ex-husband or from her previous employer and had not yet served her 24-month

Medicare qualifying period. Medications to treat her MS cost in excess of $1,000

per month, so she applied for Medicaid under the medically needy or spend-down

program; however, she was found ineligible due to excess resources. Jane spent

all her savings and financial resources on health care expenses until she reached

the point that she was eligible for the medically needy program. She became

eligible for Medicaid and eventually qualified for Medicare as well.

Several years later, Janes medical condition had improved somewhat and she

wanted to find a way to return to work on a part-time basis. Since she did not feel

that her physical health was good enough to allow her to immediately start

working full time, she had difficulty finding an Employment Network to accept

her Ticket. She did receive services from the state VR agency and was sent to a

benefits specialist. Once Jane learned what impact earned income would have on

her Medicaid eligibility, she decided that working part time was not worth the

possible loss of Medicaid prescription drug coverage.

Introduction

Expansion of the disability programs and the poor employment rates of adults with disabilities

have become major concerns for SSA and disability policymakers across the country (GAO,

1994; GAO, 1996b; GAO, 1998b; Social Security Bulletin, Spring 1996; Congressional Budget

Office Report, 2004). Too often, this alarming growth of the Social Security disability rolls has

been represented and perceived as SSAs problem to solve in isolation, when in fact it is a larger

societal problem. Receipt of Social Security disability benefits is merely the last stop on a long

journey that many people with disabilities make from the point of disability onset to the moment

at which disability is so severe that work is not possible (Burkhauser, 2002; McMahon,
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Danczyk-Hawley, Reid, Habeck, Kregel, and Owens, 2002). All along this journey, individuals

encounter the policies and practices of the other systems involved in disability and employment

issues. When these systems fail to stem the progression of disability or work at cross-purposes

with one another to prevent successful employment retention or return to work, it is the Social

Security disability system that bears the eventual brunt of this failure. Ultimately, however, the

costs associated with having so many Americans exiting the nations workforce to lead lives of

dependency on federal disability benefits are borne by all U.S. citizens.

Any meaningful effort to slow down or reverse this relentless advance toward federal disability

benefits will require significant and sustained collaboration and coordination between the Social

Security Administration and the other federal agencies with a stake in developing disability and

employment policy. A significant opportunity to establish such systems collaboration was

created on February 1, 2001, when President George W. Bush announced the New Freedom

Initiative as part of a nationwide effort to remove barriers to community living for people with

disabilities. The New Freedom Initiative is a comprehensive federal plan that represents an

important step in ensuring that all Americans have the opportunity to learn and develop skills,

engage in productive work, make choices about their daily lives, and participate fully in their

community. The initiatives goals are as follows:

Increase access to assistive and universally designed technologies;

Expand educational opportunities;

Promote home ownership;

Integrate Americans with disabilities into the workforce;

Expand transportation options; and

Promote full access to community life.

This initiative is particularly important because it involves so many departments of the Federal

Government and has the force of the White House solidly behind it. Through Executive Order

13217, President Bush directed six federal agenciesincluding the Departments of Justice

(DOJ), Education (ED), Labor (DOL), Health and Human Services (DHHS), and Housing and
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Urban Development (HUD), as well as SSAto evaluate the policies, programs, statutes, and

regulations of their respective agencies to determine whether any should be revised or modified

to improve the availability of community-based services for qualified individuals with

disabilities and to report back to the President with their findings. The Departments of

Transportation (DOT) and Veterans Affairs (VA), the Small Business Administration (SBA),

and the Office of Personnel Management (OPM), though not specifically named in the executive

order, also joined in the implementation effort. While it is still too early to assess the full impact

of the New Freedom Initiative, the platform it provides for systems coordination, collaboration,

and integration is very promising.

This chapter examines five major systems with which SSA must coordinate its efforts in order to

create positive change in the employment of persons with disabilities:

Health care system  including Medicaid, Medicare, and private health insurance.

Rehabilitation system  including the state vocational rehabilitation (VR) systems, private

rehabilitation systems involved with short-term and long-term disability insurance, workers

compensation programs, and community rehabilitation programs.

Employment and training system  including DOL programs such as One-Stop Career

Centers, state employment agencies, and unemployment insurance (UI) programs.

Education system  including transition services for students with disabilities in public

schools, vocational/technical education, and postsecondary educational entities such as

community colleges and universities.

Business community  including private employers, small businesses, and large corporations.

For each system, the current status of coordination and collaboration will be examined and the

attempts Congress and SSA have made in the past 15 years to improve systems collaboration and

coordination will be reviewed. After the discussion of the various systems, recommendations are

provided for policy changes Congress and SSA could make that would improve coordination and

collaboration in each area.
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Health Care System

Working with the major federal health care systems is nothing new for SSA, since it works

closely with the Centers for Medicare and Medicaid Services (CMS) in the implementation of

both the Medicare and Medicaid programs. Federal law guarantees that SSI recipients are

eligible to receive Medicaid coverage and, in many states, SSA is charged with making Medicaid

eligibility determinations. Both Medicare and Medicaid are inextricably linked to the disability

benefits provided by SSA, and policy shifts made by CMS in either of these programs are felt

keenly by DI/SSI beneficiaries.

The Problem

The solution lies in taking a long-range view and attacking the problem at its source: our

dysfunctional health care system, which is grossly inefficient, and often does harm when it is

supposed to be doing good. It doesnt make sense to fine-tune individual programs when the

whole system is broken (William Novelli, CEO of AARP, February 2005).

One of the most commonly cited reasons Disability Insurance (DI) and Supplemental Security

Income (SSI) beneficiaries offer for not engaging in work activity is the perceived and real risk

of losing health care benefits (Hanson et al., 2003). Catherine Kelly Baird, of the California

Governors Committee on the Employment of People with Disabilities, describes this concern

among beneficiaries: The big scare is always jumping out of a safety net because of the very

profound fear that once you lose your benefits, you will never be able to get them again

(Catherine Baird, key stakeholder interview, November 2004). For individuals with disabilities

who may have significant health care needs or high costs, the thought of losing health care

coverage can be particularly frightening.

Health insurance considerations are also of paramount importance when beneficiaries make

decisions about continuing to work versus making application for disability benefits. Honeycutt

(2003) found that over two-thirds (70 percent) of recipients were covered by some form of health

insurance in the year before their application, but less than half (46 percent) of all applicants

continued to be covered at the time of their DI application. Of those with coverage at the time of
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application, 20 percent had Medicaid or medical assistance. The desperate search for affordable

health insurance fuels the increased SSI/DI application rates as it simultaneously diminishes the

rates of termination due to employment. Health care concerns may represent the single most salient

factor contributing to increasing rates of dependency on federal disability benefits and depressed

rates of competitive employment for individuals with disabilities (NCD, 1997b).

Previous Attempts by Congress and SSA to Impact the Health Care System

This section will examine the two federal health care systems (Medicaid and Medicare) separately,

as these programs function so differently. The final section will examine SSAs efforts to impact

the private health care system  primarily employer-sponsored health care plans.

Medicaid Issues. In the past 15 years, SSA has made a significant effort to reduce the

employment disincentives related to loss of Medicaid coverage. In 1987, SSA collaborated with

the Health Care Financing Administration (HCFA, now CMS) to permanently implement the

1619(b) extended Medicaid coverage for SSI recipients who work. This provision provides

continued Medicaid coverage for individuals whose incomes are too high to qualify for an SSI

cash payment but are not high enough to offset the loss of Medicaid and/or publicly funded

attendant care. It allows SSA to disregard earned income when determining Medicaid eligibility

up to the states designated threshold amount (SSA POMS SI 01715.015  Special Groups of

Former SSI Recipients). This one provision is arguably the most powerful work incentive in the

SSI program (Sheldon, n.d.b; Virginia Commonwealth University, 2002).

SSA has also worked in close partnership with CMS to expand Medicaid buy-in programs for

individuals with disabilities who work. As described in Chapter I, the Ticket to Work and Work

Incentives Improvement Act of 1999 (TWWIIA) includes two key provisions designed to expand

authority originally granted to states under the 1997 Balanced Budget Act (BBA) to provide

Medicaid coverage to working people with disabilities. The Medicaid buy-in program is targeted

at individuals who otherwise would not qualify for Medicaid coverage because their earnings or

personal assets exceed established thresholds. Under TWWIIA, states have considerable

flexibility in terms of establishing asset, resource, and income limits for working individuals

with disabilities between the ages of 16 and 64. In addition to the Medicaid buy-in program,
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Section 203 of the Act created a grant program through the Department of Health and Human

Services (HHS) that would encourage and support states in developing a buy-in program. These

grants, termed Medicaid Infrastructure Grants (MIGs), permitted states considerable freedom to

address a variety of work-incentive issues in their state systems. Eligibility for MIG grants was

based to a large extent on the states willingness to provide personal assistance services to

employed individuals with disabilities.

Currently 32 states have implemented buy-in programs and, while Medicaid buy-in programs

have been operational for several years now, enrollments in many states remain relatively low

(Goodman and Livermore, 2004). In some cases, this may be due to poor public awareness

efforts. Other factors affecting enrollment may include the procedures used by states to verify

disability and work activity, and whether or not the enrollment process is automated. The

effectiveness of buy-in programs is also contingent on the ability of people with disabilities to

make informed choices. The buy-in has added another dimension of complexity to the already

complex employment decisions of people with disabilities. Unless the employment support

system for people with disabilities is markedly simplified in the future, the need for benefit

specialists will continue to increase, limiting the effectiveness of federal and state initiatives

attempting to promote the employment of people with disabilities.

Unfortunately, SSA and CMS have not worked collaboratively to identify and eliminate work

disincentives inherent in the various Medicaid waiver programs. The effect of earned income is

still a major problem for individuals enrolled in the medically needy or spend-down program,

Home and Community Based Services (HCBS) waivers, extended Medicaid coverage for former

SSI recipients who become entitled to Title II childhood disability benefits, and other special statespecific waivers. Income and resource rules governing both eligibility and patient liability or share

of cost for these waiver programs often penalize paid employment. While 1619(b) provisions may

protect basic Medicaid eligibility for SSI recipients who work, there are no such provisions to

protect the special services and supports Medicaid pays for through the waiver programs.

A promising new collaborative effort between SSA and CMS are the work incentives for

participants in the Florida Freedom Initiative (FFI). The FFI is a demonstration currently being
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conducted by CMS through the Florida Agency for Persons with Disabilities. The demonstration

is based on a cash and counseling model in which participants receive a monthly cash allowance

instead of traditional services provided by the agency. Participants use the allowance to purchase

necessary services from the provider of their choice. SSA is collaborating with CMS by

modifying a number of SSI program rules to test whether a combination of CMS and SSA

waivers will improve the employment outcomes of participants. This project is far too new to

generate definitive results, but it is an example of SSA and CMS working together to enhance

consumer choice, control, and empowerment.

Medicare Issues. In addition to FFI, SSA has actively engaged CMS in developing solutions to

the problem of beneficiaries fearing the loss of Medicare coverage due to paid employment.

With the passage of the Ticket legislation in 1999, the extended period of Medicare coverage

(EPMC) was created. This extended premium-free Medicare coverage for beneficiaries who lose

cash benefits due to work for a minimum of 93 months after the end of the trial work period. In

many instances, Medicare coverage may extend well beyond 93 months. In addition, SSA and

CMS worked to create a Medicare buy-in option for qualified disabled and working individuals

(QDWI). This provision allows eligible individuals to purchase Medicare Part A if Medicare

benefits were lost due to return to work at a substantial level. To be eligible for QDWI, an

individual must have countable income of more than 120 percent but less than 135 percent of the

federal poverty level, countable resources not exceeding twice the SSI limit, and not otherwise

be eligible for Medicaid. Eligibility for Medicaid benefits under the QDWI program is limited to

payment of Medicare Part A premiums. Finally, the new Medicare Modernization Act (MMA)

will add a prescription drug benefit, a provision that has significant consequences for SSA

beneficiaries with serious health conditions requiring medications.

Unfortunately, there are still Medicare issues that create barriers to the return-to-work efforts of

SSA beneficiaries. The 24-month Medicare qualifying period (MQP) that DI beneficiaries must

serve before Medicare coverage begins often denies individuals access to health care supports at

the point at which they are most urgently needed. By the time beneficiaries start receiving DI

payments, most have lost employer-sponsored health coverage and have been unable to afford to

pay the COBRA premiums. By not providing even the minimum levels of health insurance
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provided by Medicare for two full years, the medical condition of some beneficiaries may

deteriorate to the point that employment is impossible.

Medicare costs are taking up an increasing portion of the overall federal budget,

and the program could become part of the growing problem of funding the U.S.

health care system, U.S. Comptroller General David Walker warned at an event in

May 2005. Walker said, If theres one thing that can bankrupt the country, its

health care. Its out of control. According to Reuters/Yahoo! News, the Bush

Administration recently estimated that the total cost of the new Medicare

prescription drug benefit alone will be $724 billion over the next 10 years

(American Health Line, May 2005).

Private Health Insurance Issues. Private health coverage remains elusive for people with

disabilities for numerous reasons. First, most U.S. health care coverage is provided through

employer-sponsored plans accessed affordably while the person (or a legal partner) is employed

(Glied and Borzi, 2004). Data shows steadily decreasing enrollment rates across all categories,

but the most significant reductions occur in low-income categories (Davis, 2002) where other

data locates many workers with disabilities (Hanson, Neuman, Dutwin, and Kasper, 2003).

Illness or injury resulting in disability can be a cause of unemployment, leading to loss of health

insurance at inopportune times for a return to work or sustained health care (Bagenstos, 2004).

While it is theoretically possible to purchase health care coverage on the open market between

jobs, through COBRA protections or state high-risk insurance pools, the out-of-pocket cost at

these times is prohibitive for individuals who are unemployed with no regular source of income.

Medicaid coverage, outside of recent and still little-used Medicaid buy-ins, may not be even

considered by large numbers of those eligible as a means of accessing uninterrupted health

coverage after or in between employment situations.

Attaining coverage when severe preexisting conditions (i.e., the disability) are in evidence

presents another challenge (Miller and Luft, 1997). In order to access the public health insurance

system such as Medicaid, individuals with disabilities must have little income and few assets. It

is common for people to bankrupt themselves trying to pay for the medical services they need.

There is recent data that links high medical bills as the top reason for filing bankruptcy

(Himmelstein, Warren, Thorne, and Woolhandler, n.d.).
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Both SSA and CMS are aware of the problems beneficiaries with disabilities face in accessing

employer-sponsored health insurance due to the cost of premiums, co-payments, and deductibles.

In an effort to improve this situation, the Omnibus Budget Reconciliation Act of 1990 (OBRA

90) required all states to enact a program to identify cases in which enrollment of a Medicaid

recipient in a group health plan is cost-effective. An individuals enrollment in a group health

plan is considered cost-effective if the expenditures in Medicaid payments are likely to be greater

than the cost of paying the premiums and cost-sharing obligations under an employer group

health plan for those services. The state-run Health Insurance Premium Payment (HIPP)

programs can provide beneficiaries with access to private, employer-sponsored health coverage

through premium payments. The beneficiary can use employer-sponsored coverage and access

Medicaid for any services not covered under the employers plan. The problem is that to use

HIPP coverage, the person must have access to an employer-sponsored plan. This becomes a bit

of a vicious cycle, since so many people with disabilities are currently unemployed or employed

in part-time jobs that do not offer health insurance.

A 1997 study conducted by the Government Accountability Office (GAO, 1997) showed that

HIPP enrollment has been low across states primarily because of difficulty in identifying potential

enrollees. Many state Medicaid eligibility workers have limited knowledge about HIPP, and those

who are aware of the program find it difficult to determine which beneficiaries have access to

employer-sponsored health coverage. Many Medicaid recipients do not disclose their access to

employer-sponsored health coverage because they fear they will lose Medicaid eligibility.

Complex private health coverage rules for enrollment add to the confusion and ambivalence in

participating in the program. Employers also play a role in the low enrollment rate in HIPP

programs. To pay premiums, Medicaid requires information about the employers health plans.

Many employers fail to respond to requests for health insurance information for Medicaid

recipients, and without the employers support, Medicaid recipients cannot access this coverage.

From the employers or insurers perspective, transitioning workers with disabilities off private

insurance and onto the public benefit rolls makes sense. This is a perfect example of how private

insurance companies and/or self-insured employers manage risk by limiting their short-term

exposure. In the current system, there is every incentive for insurance companies to identify
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those individuals with the most severe conditions and move them as quickly as possible onto the

Social Security rolls. In fact, this practice is so common that an entire industry has emerged to

expedite movement of beneficiaries through the various short-term and long-term disability

programs and ultimately onto the public disability system (McMahon et al., 2002). While the

lack of private health insurance continues to be a major contributing factor in the growth of the

SSI/DI rolls, SSA has not attempted to engage the business community or the insurance industry

in a collaborative problem-solving process. This represents a major missed opportunity.

Vocational Rehabilitation System

The Problem

The passage of TWWIIA was a demonstration of SSAs recognition that the primary reason so

many beneficiaries with disabilities remain unemployed is their inability to access the services

and supports needed to make work a reality. This section describes past and current attempts by

SSA to improve employment outcomes by offering incentives to state VR agencies and, recently,

to community rehabilitation programs or other service providers.

Previous Attempts by Congress and SSA to Impact the Rehabilitation System

Social Securitys past efforts to work collaboratively with the rehabilitation system have focused

overwhelmingly on the SVRAs. It has only been since the passage of the Ticket to Work and

Work Incentives Improvement Act in 1999 that SSA began a serious attempt to reach out to the

world of private nonprofit and for-profit rehabilitation agencies. These efforts began with the

establishment of the SSA VR reimbursement program in 1983. As described in Chapter I, the

SSA VR reimbursement program was a massive effort that increased in size and cost every year

from 1983 to 2002 (Kregel and Revell, 2003). In FY 2002, the program served more than 10,000

individuals at a cost to SSA of over $130 million, although reimbursements have declined in

recent years (Rowlette, 2004). Many states viewed the SSA VR reimbursement program as a

major source of revenue and relied on these funds to operate their programs. SSA cost

reimbursement accounts for approximately 5 percent of all case service monies available to the

state VR agencies and represented a crucial source of revenue during a period of extreme budget

pressures in many states.
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The problem with the VR reimbursement program from SSAs perspective was that the

employment outcomes continued to be disappointing and SSA was continuously under pressure

from consumer groups to expand the choice of service providers. In 1994, SSA expanded the

reimbursement program to include alternative providers. This allowed other public or private

rehabilitation agencies to apply for provider status in order to receive SSA cost reimbursement in

the same way the SVRAs did. The alternative provider program, as it came to be called, was

never very successful, because most private rehabilitation agencies did not have sufficient

resources or cash flow to be able to delay reimbursement for such a long time.

The TWWIIA legislation made state VR agencies critical to the overall implementation of TTW.

They are currently the only entity that can provide services to SSA beneficiaries under the

traditional SSA VR cost reimbursement payment mechanism, a program that has been in place

for more than 20 years and has grown significantly in the recent past. SVRAs are also unique in

that they have a legislative responsibility to provide services to all eligible beneficiaries under

their current authorizing legislation, Title I of the Rehabilitation Act. Finally, SVRAs are able to

use existing Title I monies, coupled with funds from other sources, to serve beneficiaries while

simultaneously receiving funds from SSA to reimburse the SVRA for the same services it is

obligated to provide under Title I.

The dominance of the VR agencies in Ticket assignments is ironic, since the TTW program

appears to have been created in large part to establish an alternative to the SVRAs for SSA

beneficiaries seeking employment supports as they attempt to return to work. The legislation

attempts to enhance consumer choice and independence by allowing beneficiaries to choose from

an array of available providers that compete freely for the opportunity to receive the individuals

Ticket and provide employment services. In implementing the TTW program, SSA has devoted

significant resources to attempting to entice nontraditional employment service providers to

participate in the program and provide previously unavailable services to beneficiaries. As of

October 11, 2004, SSA had mailed Tickets to 10,050,310 beneficiaries, and 67,383 Tickets had

been assigned to Employment Networks (ENs) and state VR agencies. Of the 67,383

assignments, 61,347 or 91 percent have been assigned to state VR agencies.
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Based on initial evaluation results, the TTW program has failed to live up to the high

expectations for it (Thornton et al., 2004). Beneficiary participation in the Ticket program is very

low, with only 1 percent of Ticket holders having assigned their Ticket to an EN. When

assignments do occur, they are overwhelmingly to SVRAs, which indicates that consumer choice

has not been significantly improved. Recruitment and retention of ENs has been very challenging

and EN Ticket assignments are concentrated among a few providers, with over 80 percent of all

ENs having accepted five or fewer Tickets. Finally, virtually all ENs other than the state VR

agencies report that they are losing money on their TTW operations. Obviously, the payment

mechanisms are not working as they were intended and are not acting as incentives for new

providers to offer employment services or supports to SSA beneficiaries. Currently, the TTW

regulations are under review by SSA and are expected to be significantly revised (Gerry, 2005).

Collaboration with the Rehabilitation Service Administration  The State Partnership

Systems Change Initiative. Under a March 1998 Executive Order, the President created the

National Task Force on Employment of Adults with Disabilities. The first initiative under this

executive order was the establishment of the State Partnership Systems Change Initiative (SPI).

The purpose of SPI was to support selected project states in the development of innovative

service delivery systems that would increase employment of individuals with disabilities, such as

employer partnerships, customer-driven services, waivers and buy-in, state policy change

initiatives, benefits assistance, and employment supports and programs.

SSA and RSA funded a combined total of 18 demonstration projects. SSA awarded grants to 12

states to develop innovative projects to assist adults with disabilities in their efforts to reenter the

workforce. RSA funded systems change projects in six states. These awards helped states

develop statewide programs of services and support for their residents with disabilities that

attempted to increase job opportunities and decrease their dependence on benefits. Other federal

agencies, such as DOL and HHS, joined SSA in support of these projects. The SPI projects were

completed only recently and evaluation of project results is currently under way.

Collaboration with Private Rehabilitation Agencies and Community Rehabilitation

Programs (CRPs). As previously described, SSA began to interact with private rehabilitation
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agencies as early as 1994 with the initiation of the alternative provider initiative and has

increased interaction with these entities through the TTW program. Thus far, the relationship

between SSA and the private rehabilitation community has been difficult, primarily due to the

payment mechanisms inherent in the TTW program and what CRPs often view as preferential

treatment provided to the SVRAs. Many of the recommendations that have been made by the

SSA Ticket Advisory Panel address these concerns.

Employment and Training System

The Problem

SSA has made a monumental effort in the past five years to increase coordination and

collaboration with DOLs Employment and Training Administration (DOLETA). The passage of

the Workforce Investment Act (WIA) of 1998 initiated a major reorganization of the nations

employment programs that was intended to consolidate preparation and employment services

into a unified system of support. Key to this reorganization was the creation of a national

network of One-Stop Career Centers throughout the United States and its territories, to provide a

single place where job seekers and potential job seekers can receive the services that they need to

become employed or reemployed (Morris and Farah, 2002). Although previous DOL

employment programs, such as the Job Training Partnership Act, had been largely ineffective in

serving individuals with significant disabilities, WIA presented a new opportunity for

beneficiaries to successfully access and benefit from the same employment services as those

available to the general public (Bader, 2003). Prior to the passage of WIA, formal interaction

between SSA and DOL had rarely occurred.

Previous Attempts by Congress and SSA to Impact the Federal Employment and

Training System

The following section describes prior and current collaborative efforts on the part of DOL and

SSA. As previously noted, collaboration between these two federal agencies began primarily

with the passage of the WIA 1998 when DOL moved toward full implementation of the OneStop Career Center system.
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Work Incentive Grants  One of the first areas in which SSA worked collaboratively with

DOLETA was on the Work Incentive Grant (WIG) initiative that began in 2001. This initiative

provided competitive grants designed to enhance the employability, employment, and career

advancement of people with disabilities through enhanced service delivery in the new One-Stop

system established under WIA. The WIG program provides grant funds to consortia and/or

partnerships of public and private nonprofit entities working in coordination with the One-Stop

system to augment the existing programs and services and ensure programmatic access and

streamlined, seamless service delivery for people with disabilities. Although SSA did not provide

funding for WIG projects, it did envision the inclusion of benefits planning and counseling as a

service available in One-Stop Career Centers. WIG project personnel were permitted to attend

the required Benefits Planning, Assistance, and Outreach (BPAO) training and also were invited

to training events funded through the SSA/RSA collaborative State Partnership Initiative.

Although only a few of the WIGs became BPAO providers, it is clear that SSA was working to

facilitate the coordination of their own employment demonstration projects with WIGs interested

in collaboration.

Disability Program Navigator  In 2002, recognizing that specialized supports would be

necessary to make certain that SSA beneficiaries would have the opportunity to fully participate

in WIA programs, SSA and DOL collaboratively developed, funded, and piloted a new position

 disability program navigator  to assist individuals with disabilities to access and benefit

from One-Stop Career Centers. The disability program navigator position is designed to assist

individuals with disabilities work their way through the complex eligibility criteria and program

rules in the various disability systems that often discourage people with disabilities from

working. Disability navigators assist people with disabilities access the wide variety of programs

available to support their successful entry or reentry into the workforce, connecting such

individuals to programs and the benefits, services, and/or supports they provide, and following

up to ensure that each individual is receiving the level of benefits, services, and/or supports

needed. In addition, navigators serve as a One-Stop Career Center resource on Social Security

work incentives and other employment support programs, including the Ticket to Work program

and the provision of services through BPAO organizations, the protection and advocacy systems

(P&As), SSAs employment-related demonstration projects, and state vocational rehabilitation
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agencies. As of June 2004, DOLETA had established disability program navigators in 17 states.

An outcome evaluation of the program is in its initial stages.

Developing Work Records and Earnings Histories  In another example of collaboration with

DOL, SSA area offices have begun establishing agreements with state unemployment insurance

(UI) agencies to use the quarterly wage data they collect to assist with developing work records

and earnings histories. This is an excellent strategy, since UI data offers more complete data than

the IRS files and provides this data quarterly instead of annually. Since overpayments due to

unreported work activities create significant problems in the DI system, this development is

extremely positive. In a similar collaborative effort, SSA has established the ability to

periodically match all SSI beneficiaries against wage and new-hire data in the Office of Child

Support Enforcements National Directory of New Hires, thus enabling the agency to more

expeditiously identify individuals with earned income.

Office of Disability Employment Policy  SSA has also been involved in a minor way with the

activities of DOLs Office of Disability Employment Policy (ODEP). ODEP currently has a

number of demonstration initiatives under way, including its recent series of Customized

Employment Grants. The purpose of the Customized Employment Grant Initiative, begun by

ODEP in FY 2001 and continued in FY 2002, is to provide funds to selected Local Workforce

Investment Boards to build the capacity in local One-Stop Career Centers to provide customized

employment services to persons with disabilities who may not now be regularly targeted for

services by the One-Stop Career Center system.

In response to the employment goals in the Presidents New Freedom Initiative, ODEP also has

recently developed the Small Business and Self Employment Service (SBSES). This new

program provides information, counseling, and referrals about self-employment and small

business ownership opportunities for people with disabilities. The SBSES is housed in and

operated by the Job Accommodation Network. The main objective of the SBSES is to support

people with disabilities in their efforts to start and successfully manage profitable small

businesses. Although the program briefly references the Social Security benefits and work

incentives such as PASS in its informational materials, there is no linkage to the SSA Web site or
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any other site containing specific information on the effect of self-employment on disability

benefits. (For more information, go to www.dol.gov/odep/programs/promotin.htm.) Similarly,

SSA fails to reference any assistance that people with disabilities can receive in developing small

businesses or microenterprises on its Web pages or in its printed informational materials.

Another area of the DOL system that SSA also needs to work more closely with is state

unemployment insurance programs. One of the current problems with the UI system is that

applicants have to be able to work and actively seeking work to get UI benefits. These benefits

are generally not payable to unemployed individuals who are sick or unable to work for any

reason (DOLETA, 2005). It is not uncommon for UI benefits to be denied to individuals who

indicate that they are disabled, even though disability and employment are not necessarily

mutually exclusive. In some cases, BPAO providers have reported that state UI workers have

denied benefits to people who indicate that they receive any form of SSA disability benefit.

Apparently, the rationale here is that people who get SSA disability benefits are by definition too

disabled to work at a substantial level  truly a catch-22 situation. Since UI benefits are not

payable to people who are disabled (i.e., unable to work), many applicants are afraid to mention

that they have impairments or are on disability benefits. A more functional strategy would be for

SSA and the state VR agencies to work with the state UI agencies to develop ways to probe for

indicators of disability during the initial interview or application for unemployment benefits

(Golden, OMara, Ferrell, and Sheldon, 2005).

Educational System

The successful transition of students with disabilities from school to work or postsecondary

training and education is a major policy initiative for several federal agencies, including the U.S.

Department of Education (ED), DOL, and SSA. Many of the students who are the target of these

initiatives are receiving Social Security disability benefits such as SSI or Title II Childhood

Disability Benefits (Miller and OMara, 2003). In a recent NCD report discussing financial aid

barriers faced by youth with disabilities, Moore states, It is in the best interest of this country

that the next generation of young people with disabilities is competent and adequately prepared

to enter the workforce rather than depending on Social Security and welfare benefits (Moore,

2003). Unfortunately, misinformation and fear of losing cash benefits and/or medical benefits
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have prompted transition-aged beneficiaries and their families to limit their employment and

educational options, even though they have a strong desire to enter the labor force (Brooke,

2003). As discussed below, there is a clear need for all systems involved with transition-aged

youth to coordinate their efforts to provide accurate and complete information to beneficiaries

and their families as they attempt to exit secondary education and transition into the community.

The Problem

The problem on the educational systems front is really twofold. First, many SSI recipients first

apply for benefits as children while enrolled in public schools. These individuals often remain on

the rolls well into adulthood, with very few transitioning from high school into substantial

employment after graduation (GAO, 1996b; GAO, 1998b). Failure of the public school system to

implement successful transition services or programs creates an ongoing dependency on public

benefits. The impact of Social Security benefits on transition-aged youth is seldom considered

during the formal transition planning process conducted by school personnel. This failure to

focus on Social Security and other public benefits during transition is not only a missed

opportunity, but harm may be caused when students and family members are not educated about

or prepared for the effect of earnings on cash benefits and medical insurance (Miller and

OMara, 2003).

Differences in public policies and programs may account not only for the growth of younger

entrants on the SSI and DI rolls but also the confusion about eligibility and program purposes. In

the NCD report Transition and Post-School Outcomes for Youth with Disabilities: Closing the

Gaps to Postsecondary Education and Employment (NCD, 2000), the conflict between IDEA

and SSA rules is illustrated.

For example, technical assistance provided by the U.S. Department of

Educations Office of Special Education Programs (OSEP) through the National

Transition Alliance (Halloran and Austin, 1998, p. 3; NTN, 1998) staunchly

promotes application to the SSI program by youth in special education. This

raises concerns about schools encouraging students with certain disabilities to

apply for SSI. This strategy could be viewed as inconsistent with the IDEA

requirement for services based on each childs individual need, rather than on a

category or type of disability. OSEP is required by IDEA to implement

transition policies and programs that are designed to promote successful
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transition of youth from secondary school to the world of work and adult life. At

the same time, SSA is required by the Social Security Act to implement policies

and programs that provide cash benefit to children and youth whose disability

prevents their employment. The eligibility requirements are different for children

and adults. To become enrolled (that is, to be determined eligible by SSA), youth

over 18 years of age must present themselves as being unable to be employed. At

the very minimum, these public policies and their interpretation appear to be in

direct conflict.

Second, there is the problem of poor educational attainment of DI beneficiaries who enter the

disability system later in life. A 2004 study conducted by the Congressional Budget Office found

that a significant number of baby boomers aged 51 through 61 years are leaving the labor force due

to disability, primarily musculoskeletal or cardiopulmonary conditions. Unfortunately, this group is

characterized by low educational attainment, with over 25 percent not having completed high

school and only 5 percent having an undergraduate college degree. These beneficiaries also tend to

have histories of low-skilled, fairly low-wage employment, such as factory or service work

(Congressional Budget Office, 2004). Efforts to help this population return to work will be stymied

by their lack of education and marketable job skills  particularly in todays highly competitive

information economy. It is now more important than ever that people of all ages have access to

higher education and the financial means to pay for training and education (Moore, 2003).

Although SSA recognizes the connection between postsecondary education and/or training and

the ability to achieve competitive employment, no efforts have been made to date to engage

higher education in any federal interagency collaborative efforts. The Social Security disability

programs do offer work incentives that encourage postsecondary education, such as the student

earned income exclusion (SEIE) and the Plan for Achieving Self-Support (PASS), but the impact

of these incentives has been limited.

Previous Attempts by Congress and SSA to Impact the Educational System

and Youth

The following section describes specific projects that SSA has implemented to try to enhance

successful transition of beneficiaries from secondary school to employment and adult life in the
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community. For the most part, these projects have been operated either directly by SSA or as

grants from SSA to community-based organizations.

Graduating to Independence  SSA has become increasingly aware of the importance of

working with educational systems, particularly public high schools, in its efforts to promote

employment of younger beneficiaries. In the late 1990s, SSA created an education kit called

Graduating to Independence (GTI) aimed specifically at youth in transition from education to

employment and their families. The kit is designed for use by educators and professional

organizations to instruct young beneficiaries and their families about SSAs work incentives. The

multimedia kit contains a videotape and several computer disks in addition to written materials

that combine facts with motivational examples. SSA has been fairly aggressive in distributing the

GTI kits, sending them to school districts across the country and handing them out at national

conferences. The impact of this public information effort has not been evaluated to date.

SSAs I Can Work Project  Beginning in 2000, SSA initiated a special school-to-work

transition pilot project through a contract with MAXIMUS, Inc. in the states of Maryland and

Florida. This program targeted youth age 15 to 16 years old who were SSI recipients and

enrolled in the public education system (Smith, 2002). The interventions included vocational

assessment and employment-focused transition planning combined with a case management

approach in which referrals to community resources were coordinated. Actual employment

services and supports were delivered by community agencies such as the state VR agency and

other community rehabilitation programs. Efforts were also made to provide information about

the effect of paid employment on Social Security benefits and the use of applicable work

incentives. Based on the written report submitted to SSA by MAXIMUS, Inc. summarizing the

results after three years of implementation, the pilot program was successful in increasing

participation in transition planning, increasing family participation in the Individualized

Education Planning (IEP) process, and increasing the employment of participants during school

and after graduation (Smith, 2002). No external independent evaluation has been conducted on

this program to date, so objective assessment of project results is not available.
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Cooperative Agreement with D.C. Childrens National Medical Center  An innovative

program was undertaken by Childrens National Medical Center and the school system in

Washington, D.C., in the late 1990s to provide transition planning for SSI youth 1121 years of

age. Participants received vocational counseling with their parents, attended transition

workshops, and were given opportunities for leadership development and college preparation

(McGill, 2002). SSAs four-year cooperative agreement with Childrens Medical Center has

ended, but the Adolescent Employment Readiness Center continues to exist.

Youth Transition Process Demonstration  In 2003, SSA initiated Youth Transition

Demonstration (YTD) projects designed to test the impact of a comprehensive package of

services and SSI waivers on the postsecondary educational and employment outcomes of SSI

beneficiaries between the ages of 14 and 25 years. SSA has awarded seven cooperative

agreements in six states: California, Colorado, Iowa, Maryland, Mississippi, and New York. The

demonstration projects are designing and implementing interventions that include services and

supports such as benefits advisement, service coordination, disability program navigators,

enhanced individual development accounts, and job placement and training services. In addition,

SSA is testing the effect of waiving five SSI program rules for participants:

Participants determined by their age 18 reviews to no longer be eligible for SSI benefits may

retain those benefits as long as they participate in the project.

Participants may receive the student earned income exclusion (SEIE) through the age of 25.

Participants will benefit from a $1 for every $4 benefit offset for earnings above the general

earned income exclusion.

Participants will be allowed greater flexibility in the establishment and implementation of

IDAs.

Participants will be allowed to establish goals for PASS accounts that target either

postsecondary education or employment outcomes.

The Youth Transition Demonstration projects are too new for any results to be evident, but the

effort is commendable. SSA is well aware of the importance of early intervention with the
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younger beneficiaries in any efforts to enhance employment outcomes for adults with

disabilities. The earlier students are exposed to employment and the more the expectation of

work is reinforced and supported during school, the greater the likelihood that they will be

gainfully employed upon graduation (Miller and OMara, 2003).

Employers, Business Community, and Private Insurance Industry

The Problem

SSA has had very limited involvement with employers or the business community around the

issues of return to work, early intervention, or preventing individuals from joining the disability

rolls. So far, SSA has focused its attempts to engage employers primarily on programs that

encourage businesses to hire beneficiaries.

Previous Attempts by Congress and SSA to Impact the Employer, Business, and

Private Insurance Systems

The following section describes the efforts SSA has made to engage the business community in

efforts to reduce the disability rolls or at least stem the recent growth. For the most part, SSA has

focused on finding ways to encourage businesses to hire persons with disabilities, as evidenced

by the Ticket to Hire program detailed below. This section also examines some of the state-ofthe-art approaches businesses are using to decrease the incidence of disability at the workplace as

well as return ill or injured workers to employment more quickly. There are some interesting

lessons on prevention and early intervention coming out of the private insurance systems using

innovative disability management techniques, which may be applicable to the Social Security

disability system.

Ticket to Hire  Currently, SSA operates the Ticket to Hire program in conjunction with the

Ticket to Work initiative. This program is a national referral service for employers interested in

hiring individuals who experience disability. The Ticket to Hire program links employers to the

approved Employment Networks in their area that have qualified candidates with disabilities

who have assigned their Ticket. The Ticket to Hire program is a free, Web-based service that

employers can access through the SSA Web site.
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Disability Management Programs  While the past 15 years have witnessed tremendous

growth in the public disability rolls, private businesses have been learning how to manage the

costs associated with disability. Since the late 1980s, there has been a growing awareness in the

business and private insurance communities that focusing on cutting short-term costs of medical

coverage and wage replacement programs for employees who are ill, injured, or disabled actually

increases total expenditures over the long term (Habeck and Hunt, 1999; Integrated Benefits

Institute, 2004). The lost productivity costs of employee absences due to illness, injury, or

disability may be up to seven times higher than the cost of wage replacement payments such as

short-term disability (STD) or long-term disability (LTD) alone. Combined wage replacement

payments and lost productivity costs outweigh medical payments for workers compensation and

group health by more than four to one (IBI, 2004). Companies are beginning to realize that the

costs of disability are measured not just by insurance premiums but also by lost workplace

efficiency, disrupted customer relationships, expenses related to hiring and training new workers,

and added administrative costs (Watson Wyatt and Washington Business Group on Health,

1999). The new thinking is that the optimal outcome of any disability claim is the employees

return to a healthy and productive life  not ongoing dependence on a progression of wage

replacement payments.

To reduce the full and true cost of disability, businesses increasingly have been implementing

disability management (DM) programs. This term refers to a proactive, employer-based approach

to (a) prevent and limit disability; (b) provide early intervention for health and disability risk

factors; and (c) foster coordinated disability administrative and rehabilitation strategies to promote

cost-effective restoration and return-to-work strategies (Williams and Westmoreland, 2002). DM is

characterized by a prevention and remediation approach that seeks to prevent disability from

occurring, or to intervene very quickly after the onset of illness, injury, or disability with the goal

of returning individuals to productive employment (Habeck and Hunt, 1999). Research has shown

that the following are the most effective components of DM programs:

Common case management techniques characterized by ongoing open communication among

ill or injured employees, supervisors, physicians, and designated case managers to resolve

issues preventing a speedy return to work.
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Aggressive return-to-work policies and strategies, including modified job duties, transitional

job duties, job site accommodations, and vocational counseling.

Active coordinated management of work and non-work-related disability issues.

Identifiable, simple, and coordinated points for intake and claims reporting for all disability

issues (Calkins, Lui, and Wood, 2000; Williams and Westmoreland, 2002).

The growing success of DM approaches has some profound implications for stemming the

growth of the Social Security disability rolls. Perhaps if more companies consistently utilized

this approach, fewer ill or injured workers would experience a progression of disability benefits

(PODB) that ultimately ends up in an application for Social Security disability benefits. Even if

DM techniques served to merely delay or slow down the PODB phenomenon, it would result in

substantial savings for the DI Trust Fund. SSA would be well served to initiate collaborative

efforts with private insurers and the business community that would result in slowing the

progression of injured workers onto the DI roles.

Recommendations for SSA Policy Changes

The following sections delineate recommendations for ways SSA could improve collaboration

with each of the five major systems discussed above: the health care system; VR system; federal

employment and training system; educational systems; and employer, business, and private

insurance systems. Recommendations are specifically targeted at steps Congress and SSA could

take to enhance collaboration among the various systems to improve the employment outcomes

of DI and SSI beneficiaries and reduce dependency on public benefits

Collaborating with the Health Care Systems

While SSA and the Centers for Medicare and Medicaid Services (CMS) have made significant

strides in coordinating their respective systems in the past 15 years in order to promote

employment outcomes for people with disabilities, a substantial amount of work remains. The

following are examples of policies that continue to work at cross-purposes.
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CMS and SSA should work together closely to modify existing program regulations in

order to uncouple Medicare and Medicaid coverage from DI/SSI cash payments, similar to

the way in which Medicare coverage is currently provided to persons with end-stage renal

disease or the Medicaid buy-in program. Anecdotal reports indicate that many individuals

would forgo cash payments entirely if they could access affordable health care.

SSA, CMS, and state Medicaid agencies need to work together to identify and eliminate the

many employment disincentives currently built into the Medicaid waiver, Medicaid buy-in,

and Health Insurance Premium Payment (HIPP) programs. Income and resource rules

governing both eligibility and patient liability or share of cost often penalize paid employment

for individuals receiving services through Medicaid waiver programs. In addition, there remain

many aspects in state Medicaid buy-in programs that are problematic, such as low resource or

asset limits, deeming of spousal income, and limited pharmacy coverage. Finally,

implementation of the HIPP program needs serious attention. There are numerous places in this

program where the systems fail to interface correctly. SSA needs to become a more active

partner in helping state Medicaid agencies train workers, inform beneficiaries, and educate

employers about this special assistance with health care costs. It does not make fiscal sense to

have beneficiaries choosing to stay on expensive public health care benefits when employersponsored plans are available.

SSA and CMS should work collaboratively to examine the Medicare programs for policies

that do not promote paid employment or that encourage earlier application for DI benefits.

As recommended elsewhere, eliminating the 24-month Medicare qualifying period would enable

some beneficiaries to access needed health care at a crucial period in their return-to-work efforts.

Another alternative would be to expand the Medicare buy-in option. Currently, this option is

offered only to individuals who were awarded DI benefits but subsequently became ineligible

due to engaging in SGA. Another policy change that would encourage employment would be to

allow beneficiaries to deduct the cost of health care premiums from earnings for the purposes of

SGA determinations. This might encourage beneficiaries to work more and participate in

employer-sponsored health care plans that may require premiums, co-payments, and deductibles

otherwise viewed as unaffordable.
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Congress should direct SSA and CMS to conduct a complete review of the current

Medicaid and Medicare programs to identify and correct inconsistencies between the two

programs that result in disincentives to employment for beneficiaries. There are currently

numerous system interface problems between the Medicaid and Medicare programs that CMS

needs to address with input from SSA in order to promote employment of beneficiaries. These

two programs work in complete isolation from one another, and the resulting silos cause

problems in many areas. One of the areas that needs work is the Medicare Savings Program, in

which Medicaid pays all or part of the Medicare premiums and also covers the co-payments and

deductibles for beneficiaries who meet specified income and resource limits. The effect of earned

income on eligibility for these programs is not conducive to work. In addition, the interaction of

Medicaid buy-in programs and the Medicare Modernization Act on prescription drug coverage

poses problems. These are not issues that CMS should address without significant involvement

with SSA, since they affect return-to-work efforts of beneficiaries. Finally, Medicare

expenditures are not included when calculating individual threshold amounts for 1619(b)

extended Medicaid coverage. This practice penalizes SSI recipients with dual eligibility in both

Medicare and Medicaid programs who are earning more than the standard state threshold amount

but who have unusually high medical expenses.

SSA should convene a task force composed of representatives of private insurance providers,

large employers, and small business to design, implement, and evaluate a series of

demonstration activities that will assess the effectiveness of public-private insurance

partnerships in expanding access to health care for individuals with disabilities. SSA has

never attempted to engage the business community or the insurance industry in collaborative

efforts on the issue of health care coverage. This represents a significant missed opportunity that

must be addressed. The public and private health care systems are currently working at crosspurposes. A blending or braiding of public and private funds may well be more cost-effective and

could possibly lead to a more seamless and integrated health care coverage system for people with

disabilities. This task will undoubtedly be difficult, but the consequences of having the public and

private health care systems continue to work in isolation from each other are significant.
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Vocational Rehabilitation System

SSAs efforts to work collaboratively with the vocational rehabilitation system to improve the rates

of Substantial Gain Activity (SGA)-level work for its beneficiaries have not been particularly

successful to date. The main problem seems to be the way SSA pays for these outcomes. However,

the general concept of having SSA provide financial incentives for employment outcomes is a

sound one, and alternative payment mechanisms should be investigated and piloted to test their

effectiveness. Specific recommendations include the following:

SSA should modify Ticket to Work (TTW) program regulations to allow the SSAs

Vocational Rehabilitation (VR) traditional VR cost reimbursement program to carry on as

a parallel program to the Employment Network (EN) outcome or outcome-milestone

payment mechanisms. The cost reimbursement and EN payment systems should operate as

parallel programs in which both the VR agency and the EN would receive payments for serving

the same beneficiary. This approach would facilitate VR-EN partnership in which the SVRA

could get reimbursed for its costs and then hand off the case to an EN for follow-up, and the EN

would receive the outcome payments through the Ticket. The funding security this approach

would foster for the ENs would position them better financially to accept Tickets from

individuals who do not use VR services.

SSA should modify the TTW regulations to ensure that an EN is able to accept Ticket

assignment from a beneficiary, refer that individual to a VR agency for needed services,

and not be required to reimburse the VR agency for those services. TWWIIA did not specify

a rigid set of requirements with regard to the nature of agreements between ENs and VR

agencies, only that they are required. The current TTW regulations do not specify the terms of

the agreements and do not require ENs to automatically reimburse VR agencies for services

provided to beneficiaries by the EN. However, in practice, virtually all current VR-EN

agreements require that when an EN refers a beneficiary to a VR agency for services, it must

reimburse the VR agency for the cost of services (Kregel & Revell, 2003). This creates a

tremendous disincentive for ENs, which are struggling to find economically viable business

models under which to operate the TTW program. The fact that, under the terms of nearly all

current agreements, the monies that must be repaid to SVRAs may constitute 25 percent to 50
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percent of the total Ticket reimbursement to the EN makes a huge difference in an ENs ability

to successfully participate in the Ticket program.

Federal Employment and Training System

With the advent of the One-Stop Career Center approach to delivering employment and training

services nationally, SSA recognized a unique opportunity to gain assistance for its beneficiaries

and has actively pursued collaborative projects with DOLETA.

SSA should undertake an analysis of the impact of allowing DOL One-Stop Career

Centers to receive cost reimbursement payments for successfully serving beneficiaries

under the TTW program. Beneficiaries might have access to more choice of providers if

SSA granted the same reimbursement mechanism to One-Stop agencies that it currently

reserves for the state VR agencies. While this would be a controversial move, it might

encourage One-Stop Career Centers to take a more active role in providing employment

services and supports to individuals with disabilities.

Congress should direct SSA and DOLETA to evaluate the impact of the Workforce

Investment Act (WIA) performance standards on beneficiary participation in WIA

programs and design and test a set of waivers that will assist beneficiaries to access and

benefit from WIA core and intensive services, as well as individual training accounts. While

SSA has been involved with special DOL projects targeting consumers with disabilities, such as

the Disability Navigator Initiative and the Work Incentive Grants, there has been little involvement

in the regular WIA-funded core services (including outreach, job search and placement assistance,

and labor market information) or intensive services (including comprehensive vocational skill

and/or interest assessments, development of individual employment plans, and career counseling

and career planning provided through the One-Stop Centers). Of particular interest are the WIAfunded training services in which participants may receive short-term occupational skills training

and/or training in basic skills. Participants use individual training accounts to select an appropriate

training program from a qualified training provider. The problem with the WIA standard adult

services is that eligibility is very narrowly defined and determined. Only individuals who meet the

criteria for groups such as dislocated workers or recipients of public assistance such as Temporary
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Assistance for Needy Families (TANF) generally qualify. In addition, agencies that provide the

WIA-funded adult services are held to rigorous DOL performance standards relating to number of

placements, length of employment retention, number of hours worked, and wages earned. These

performance standards inadvertently create a disincentive to enroll people with disabilities, since

they are perceived to be less successful (or more difficult to support) in competitive employment.

SSA beneficiaries would have access to another valuable source of employment preparation,

training, and job placement services if DOL offered WIA providers additional performance credit

for serving persons with disabilities. The WIA-funded youth services could also become a useful

source of transition and early intervention services if the same performance credit were extended

for serving youth with disabilities as a priority population.

Congress should direct SSA and DOL to evaluate the effect of changing unemployment

insurance policies to all the payment of benefits when combined with vocational

rehabilitation or other employment support services, instead of denying UI benefits to

individuals who are sick or injured. The UI system could be an essential partner in the early

identification of and intervention with potential SSI/DI beneficiaries. It does not make good

fiscal sense to deny someone UI benefits if it simply hastens application for Social Security

disability benefits. Since some state UI and VR agencies are co-located in One-Stop Career

Centers created by WIA, there should be existing mechanisms for collaboration and coordination

of this type.

Educational System

The educational system should be a critical partner with Social Security in efforts to promote

employment and economic self-sufficiency for SSA beneficiaries. These systems have access to

current and future disability beneficiaries at a very early age and have the resources of

individualized education and transition planning at their disposal. Unfortunately, these systems

have not been engaged by SSA on any large scale in order to advance the successful transition

from school to paid employment. The following recommendations offer several steps that SSA

should pursue.
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Congress should direct SSA to expand the current student earned income exclusion (SEIE)

and the Plan for Achieving Self-Support (PASS) to encourage involvement of SSA

beneficiaries in postsecondary education and training. The maximum age for the SEIE should

be raised to 25 from its current level of 22. This would create an incentive for beneficiaries to

participate in postsecondary education and training programs. In addition, the PASS program

should be revised to allow beneficiaries to set a goal of career exploration or postsecondary

education as an allowable goal under the program.

SSA should work with the Department of Education to ensure that benefits planning and

financial management services are available to the transition-aged population. Early

intervention in the area of benefits counseling would result in getting valuable information about

the effect of earned income on benefits and the many work incentives available for use in meeting

career goals out to students with disabilities and their families. While the BPAO initiative has been

successful to date, there remains a problem with delivering benefits counseling to the school-age

beneficiary population. The BPAO program only can serve students beginning with the age of 14,

and benefits specialists are not trained to meet the unique counseling needs of young students and

their families. SSA should work with ED to ensure the inclusion of benefits counseling and

financial planning as part of the IEP process and transition planning.

Congress should consider a policy change that would disregard all earned income and asset

accumulation limits of beneficiaries who are transitioning from secondary education to

postsecondary education or employment for at least one year after education or training is

completed. This will allow youth to accumulate funds through scholarships, grants, and

employment that will help them acquire the education and training needed for competitive

employment without fear of losing financial and health care supports. A one-year period after

completion of education will allow these young adults to establish themselves in their career path

and move toward economic self-sufficiency. SSA is testing higher earned income and asset

limits in its Youth Transition Demonstration (YTD).
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Employers, Business Community, and Private Insurance Industry

SSA needs to engage the business community in its quest to increase employment outcomes

for people with disabilities on two fronts. First, the business community is the primary source

of employment for SSA beneficiaries. SSA has a compelling interest in encouraging businesses

to hire people with disabilities. Second, the business community is the source of many

disability applicants who acquire disability later in life. Practices of the business community

and the insurance industry that fail to return workers with disabilities to gainful employment

contribute to the progression of disability benefits phenomenon that ultimately ends at Social

Securitys doorstep.

Congress should direct SSA and the IRS to evaluate the possible effects of a disabled

worker tax credit as a means of increasing the use of DM programs in business to prevent

progression of injured and disabled workers onto the public disability rolls. The concept of

a disabled worker tax credit, similar to the work opportunity tax credit created in the context of

welfare reform, should be evaluated as a potential strategy for controlling the inflation of the DI

rolls. This credit could be offered to businesses on a per worker basis whenever an ill or injured

worker is returned to employment instead of moved onto the public benefits rolls. Another

possibility is to offer companies broader tax incentives for implementing a federally approved or

certified program of disability management. While tax incentives are certainly attractive to the

business community, they often are perceived by businesses as being bureaucratic and involving

unnecessary red tape or paperwork. Any initiative would need to be sensitive to these concerns

and would best be designed with significant input from the business and insurance communities.

Congress should direct SSA to collaborate with the Small Business Administration (SBA)

and the Rehabilitation Services Administration (RSA) to develop and implement an

employer outreach program targeted toward small and mid-size businesses. While

encouraging the expansion of DM programs is a useful strategy, these programs tend to be offered

primarily by large corporations, while most Americans are employed by small to mid-sized

businesses (Drury, 1991). In 1994, the SBA published statistics showing that firms with 100 or

fewer employees employed 35 percent of all U.S. workers. Companies with fewer than 500

workers employed more than half of all Americans and accounted for 99 percent of all business
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establishments. Interestingly enough, small firms (those with fewer than 100 employees) are a

major employer of workers compensation rehabilitants who cannot return to their former jobs, as

well as placements from state VR agencies and private VR programs (Drury, 1991) These statistics

suggest that there might be some innovative ways to engage small business that SSA could test

through partnerships with other federal and state agencies. In particular, collaborative approaches

between the SBA and the RSA could make small businesses a priority for outreach efforts

conducted by the state vocational rehabilitation agencies. The focus of these outreach efforts would

be to educate small business owners on disability issues and strategies for retaining workers by

using return-to-work approaches such as job accommodation, job modification, vocational

counseling, and case management. The state VR agencies would be uniquely qualified to provide

these services at the workplace but would need to develop a much closer connection to local small

business communities in order for this approach to work (Drury, 1991).

SSA should examine ways to encourage beneficiaries to establish small businesses or

microenterprises as an alternative to traditional wage employment. Not only is selfemployment identified as a priority in the Presidents New Freedom Initiative but research

indicates that self-employment offers more flexibility and accommodation for an individual with

a severe disability or medical condition than working for an existing employer (Griffin and

Hammis, 2003). The PASS work incentive offers an excellent way to set aside income and

resources to capitalize a business, but, as previously noted, this work incentive remains

underutilized. The problem could potentially be resolved by making a concerted effort to inform

not only VR agencies but also business entities such as local Small Business Development

Centers (SBDCs) and SBA officials about the potential a PASS offers to entrepreneurs who

experience disability. Another possible approach would be to examine why PASS plans

containing a self-employment goal fail to be approved by SSA PASS specialists. Perhaps some

common areas of weakness could be identified and steps taken to correct the problem. SSA is

testing various types of small business and microenterprise approaches as a key part of its Work

Incentives for Participants in the Florida Freedom Initiative demonstration.
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Summary

Despite concerted efforts by Congress and federal agencies, the chronic unemployment of SSA

beneficiaries remains a vexing problem. Beneficiaries are frequently unable to access the

employment services and other supports they need to obtain employment, despite the fact that

many beneficiaries feel they are capable of and motivated to work. As a result, many individuals

feel trapped on the disability rolls, unable to pursue economic self-sufficiency without

jeopardizing the health care and support they need. This situation continues to strain our nations

fiscal resources.

The complex obstacles to employment faced by SSA beneficiaries require a comprehensive set

of solutions. New approaches must be identified that emphasize beneficiary control of career

planning and the ability to access self-selected services and supports. Public and private health

care providers must develop new collaborations and new approaches to combining coverage

from multiple sources to improve program efficiencies. SSA must continue to work with RSA

and DOL to improve implementation of the TTW program and identify new approaches that will

overcome the traditional inability of SSA beneficiaries to benefit from services provided by the

nations employment and training programs. Secondary and postsecondary educational

institutions must emphasize benefits counseling and financial management training as the

foundation for beneficiary self-direction and economic self-sufficiency. Federal agencies and the

business community must realize that collaborative approaches to incorporating beneficiaries

into the workforce are needed as a way to reduce dependence on federal benefits while

simultaneously enhancing the productivity and competitiveness of large and small businesses.
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Chapter VI: Summary of Findings and Recommendations

The purpose of this study was to conduct a comprehensive analysis that (1) examines SSAs

current efforts to implement its SSI and DI disability programs; (2) documents philosophical,

programmatic, and regulatory obstacles that limit the ability of SSA beneficiaries to return to

work; (3) identifies evidence-based practices that promote the return to work of working-age

beneficiaries of the DI and SSI programs; and (4) recommends the legislative, policy, and

regulatory changes that will be necessary to ensure the successful adoption and implementation

of evidence-based practices. This chapter summarizes the findings from the entire study in

relation to the four specific research questions that guided the overall research effort and outlines

a comprehensive set of recommendations that will serve as a basis for future program reform.

Research Question 1

What are the evidence-based practices that promote the return to work of working-age

beneficiaries of the DI and SSI programs?

Since 1980, Congress has granted the Social Security Administration (SSA) the authority to

conduct demonstration projects that investigate the efficacy of possible policy or programmatic

changes that may improve the ability of beneficiaries to obtain and maintain employment. The

demonstration authority provides the agency considerable flexibility in designing and

implementing research activities, even allowing SSA to waive certain DI and Medicare

program rules to test potential changes that may enhance program administration or lead to

Trust Fund savings.

In exchange for this demonstration authority, Congress placed several requirements on SSAs

design and implementation of demonstration programs. First, SSA demonstrations must be of

adequate scope and must be designed with sufficient methodological rigor that the results will

generalize to the entire DI population or a specific subgroup within the entire population.

Second, SSA must inform Congress when it initiates a demonstration and must provide regular

reports throughout implementation. Third, SSA must communicate findings and make
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recommendations to Congress that will translate the results of the demonstrations into significant

policy changes.

To date, SSAs demonstration authority has not resulted in the validation of evidence-based

practices that promote employment and return to work for beneficiaries. In November 2004, the

Government Accountability Office (GAO) released a report that was critical of the manner in

which SSA had used its demonstration authority (GAO, 2004a). GAO concluded that the current

demonstration authority provides a valuable opportunity for SSA. The agency is allowed to

waive program rules in demonstrations and has the unique advantage of being able to fund these

activities through Trust Fund monies, not just through congressional appropriations. Even with

these advantages, GAO concluded that SSA has yet to use it to propose or assess major policy

options that could result in saving[s] to the Trust Fund (GAO, 2004a, p. 24).

GAO identified four specific shortcomings in SSAs prior demonstration efforts:

(1) SSA lacks a formal process for developing a long-range demonstration agenda that will

establish clear priorities for future research. Current demonstration planning occurs with

insufficient input from internal and external stakeholders.

(2) SSA has not used its demonstration authority to test potential program modifications prior to

launching new program initiatives. For example, if SSA had tested various components of

the Ticket to Work (TTW) program before launching the program nationwide, it may have

been able to identify problems and develop solutions prior to implementation.

(3) SSAs design of demonstration programs has frequently lacked sufficient methodological

rigor. Prior demonstration projects have not been of sufficient scope or conducted on a wide

enough scale to result in the validation of evidence-based practices that could potentially

form the basis of policy reform.

(4) SSA lacks a process to ensure that it carefully considers the policy ramifications of

demonstration project results. In addition, the agency has done a poor job of communicating

results of its demonstrations to Congress.
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A number of factors account for this lack of evidence-based practices related to employment and

return-to-work services for SSA beneficiaries. Political pressures sometimes lead policymakers

and program administrators to rush promising but unproven practices into the field in an attempt

to address the critical needs of beneficiaries. Changing congressional priorities have sometimes

made it difficult for SSA to conduct the methodical, long-term investigation of employment

practices necessary to determine whether a promising pilot program will develop into an

evidence-based service alternative.

In an era of increasingly tight fiscal resources, Congress and SSA cannot afford to devote scarce

funds to unproven national programs that ultimately do not live up to initial expectations. Access

to comprehensive, scientifically valid research information prior to committing large-scale

resources to new efforts is essential to achieving long-term program reform. Congress and SSA

should resist the temptation to rely on short-term solutions to long-standing problems and accept

the need to conduct methodologically rigorous evaluations of clinical interventions and devote

the time and resources necessary to develop and validate additional evidence-based employment

practices that will guide policy development and service delivery in the future.

Research Question 2

What policy changes are needed, given recent trends in program participation and

employment?

Although SSA has taken steps to improve its return-to-work services, a more fundamental

change in the agencys process and underlying philosophy is necessary in order to make the SSA

disability program more work-oriented. SSA needs to integrate return-to-work strategies into all

relevant phases of its disability determination process and benefits systems to enable workers

with disabilities who can return to work to do so, and reassess the root causes of its problems. To

accomplish this task, the agency must address the contradictions inherent in the current mission

and purpose of its disability programs.

Promoting employment and return to work among SSA beneficiaries will require SSA to make a

major paradigm shift and totally redefine both its mission and how it conducts its work on a day-
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to-day basis. In order to be successful in these endeavors, SSA will have to work in an

aggressive and proactive manner to indemnify against future risk, as opposed to simply passively

processing applications submitted by former workers with severe disabilities and then managing

their ongoing payments. Furthermore, a comprehensive return-to-work program cannot be

implemented by SSA alone. Successful efforts at program reform will require significant

collaboration and coordination among SSA; other federal agencies, such as the Department of

Labor (DOL), Rehabilitation Services Administration (RSA), Centers for Medicare and

Medicaid Services (CMS), Housing and Urban Development (HUD); the Small Business

Association (SBA); employers; the disability services community; and the private insurance

industry. The alarming expansion of the Social Security disability rolls cannot be viewed as

SSAs problem to solve  it is a societal problem. It is in the best interests of American society

to slow down this relentless progression from initial illness or injury to complete and total

disability. No one wins when millions of Americans are removed from the productive labor force

to live a life of dependency on federal benefits.

Research Question 3

Are there proven and documented practices that work best for some populations of people

with disabilities and not others?

The overall lack of evidence-based practices in employment and return-to-work services also

applies to strategies used to meet the employment needs of specific groups of individuals with

disabilities. Among the many vocational approaches identified in the literature for specific

groups of individuals with disabilities, few have been adequately described and, with one

exception, none have a systematic body of rigorous research documenting improved program

outcomes. The sole example of an employment approach that has been empirically validated

with a specific population of individuals with disabilities is the work that has been done to

validate the effectiveness of supported employment as a strategy to help mental health

consumers (i.e., individuals with psychiatric disabilities) achieve competitive employment

(Bond, 1992; Bond, Drake, Becker, and Mueser, 1999; Heyman, Turton, and Schneider, 2002;

Honey, 2000; Lehman, 1995).
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A crucial influence on the conceptualization of supported employment has been the work of

Robert Drake and Deborah Becker in the development of the Individual Placement and Support

(IPS) model (Becker and Drake, 1993, 2003). The IPS model is now regarded as synonymous

with evidence-based supported employment for individuals with psychiatric disabilities. The

following are the key principles that define IPS (Becker and Bond, 2002; Bond, 1998, 2004a):

(1) Services are focused on competitive employment. The agency providing supported

employment services is committed to competitive employment as an attainable goal for its

consumers with psychiatric disorders, devoting its resources for rehabilitation services to this

endeavor rather than to intermediate activities, such as day treatment or sheltered work.

(2) Eligibility is based on consumer choice. No one is excluded who wants to participate.

(3) Rapid job search. Supported employment programs use a rapid job search approach to help

consumers obtain jobs directly, rather than providing lengthy preemployment assessment,

training, and counseling.

(4) Integration of rehabilitation and mental health. The supported employment program is

closely integrated with the mental health treatment team.

(5) Attention is paid to consumer preferences. Services are based on consumer preferences

and choices rather than provider judgments. Staff and consumers find individualized job

placements based on consumer preferences, strengths, and work experiences.

(6) Time-unlimited and individualized support. Follow-along supports are individualized and

continue indefinitely.

(7) Benefits counseling is provided. Consumers are given specific and timely guidance tailored

to their unique circumstances.

Evidence-based supported employment (i.e., the IPS model) has been described in detail in a

practice manual (Becker and Drake, 2003) and an implementation resource kit (Becker and

Bond, 2002). A well-validated supported employment fidelity scale has been developed (Becker,

Smith, Tanzman, Drake, and Tremblay, 2001; Bond, Becker, Drake, and Vogler, 1997; Bond,

Vogler, Resnick, Evans, Drake, and Becker, 2001).
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Using the most stringent requirements for level of evidence, all the recent reviews of supported

employment for clients with psychiatric disabilities point to the conclusion that it should be

considered an evidence-based practice (Bond, 2004b; Bond, Becker, Drake, Rapp, Meisler,

Lehman, Bell and Blyler, 2001; Bond, Drake, Mueser, and Becker, 1997; Crowther, Marshall,

Bond, and Huxley, 2001; Heyman, Turton and Schneider, 2002; McLaren, 2004; Moll, Huff, and

Detwiler, 2003; Ridgway and Rapp, 1998; Twamley, Jeste, and Lehman, 2003).

Research Question 4

Which factors ensure that documented and evidence-based practices could be

adapted/adopted by SSA and other entities that seek to ensure the employment of people

with disabilities? Which factors prevent adaptation/adoption?

Over the past decade, SSA has devoted considerable resources to promoting employment and

return to work among DI and SSI beneficiaries. The agency has implemented a number of new

initiatives authorized under TWWIIA, such as the Ticket to Work and Self-Sufficiency Program;

the Benefits Planning, Assistance, and Outreach program; and the protection and advocacy

program for Beneficiaries of Social Security. It has modified program rules to provide increased

work incentives to beneficiaries, such as the expedited reinstatement and protection from

continuing disability review provisions of TWWIIA, indexing the SGA threshold, and increasing

the level of earnings allowed during the trial work period. The agency has also launched, or is

planning to initiate, a number of demonstrations that will test the efficacy of early intervention

services, new modifications to work incentives in the DI program, and services targeted toward

youth with disabilities.

While SSA has taken steps to improve its return-to-work services, the agency faces a number of

challenges as it implements its reform initiative. The definition of disability in the current SSA

eligibility process is based on a 50-year-old conceptualization of disability that is in direct

conflict with the premises of more recent federal policies and programs. The present eligibility

determination process fails to recognize the difference between the presence of a disability and

total work incapacity. It does not acknowledge the concepts of partial disability or temporary

disability. Rather than facilitating early intervention services by making rehabilitation services
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available to individuals early in the disability process, it delays eligibility for the rehabilitation

and medical services and supports that might enable individuals to return to work and avoid

lifelong dependence on disability benefits.

SSA is a vast federal agency that implements program rules in an attempt to ensure that millions

of individuals with disabilities receive the financial support they need to care for their basic

needs and maintain independence. However, the culture of SSA is not geared toward providing

rehabilitation services and returning individuals to work. The complexity of the system thwarts

the efforts of many beneficiaries who would like to receive rehabilitation services and return to

work. The complexity of program rules, coupled with the inability of the agency to accurately

track and record post-eligibility earnings, frequently penalizes beneficiaries who attempt to enter

or reenter employment.

SSA is not and should not be solely responsible for providing all the services and supports

necessary to enable beneficiaries to enter employment or return to work. The agency has worked

closely with the Department of Education (ED), the Centers for Medicaid and Medicare Services

(CMS) of the Department of Health and Human Services (DHHS), and the Department of Labor

(DOL) to provide beneficiaries with access to the direct employment services and indirect

employment supports necessary for employment success. While these efforts are laudable,

coordination and collaboration across multiple federal and state agencies remain a significant

challenge for the agency. Increased efforts are necessary to ensure consistency across eligibility

criteria and program rules, thereby allowing beneficiaries to access and benefit from all necessary

services and supports. In addition, SSA needs to expand its collaboration efforts by working more

closely with the business community and with public and private insurance providers.

The previous chapters have identified a number of recommendations to modify SSA disability

programs to make them more work-oriented. Each of the recommendations has been identified

through a review of all available published and unpublished literature, considered and supported

at a consensus validation conference attended by representatives of a large number of groups,

and described and justified earlier in this report. The 38 recommendations are organized into
134

three categories: Beneficiary Perspective and Self-Direction, Income Issues and Incentives, and

Coordination and Collaboration across Multiple Public and Private Systems.

Beneficiary Perspective and Self-Direction

Customer Service

(1) SSA should develop and implement a plan to improve the architectural and programmatic

accessibility of SSA field offices and Web sites.

(2) SSA field office personnel functions, staffing patterns, and work assignments should be

redesigned to prioritize activities that assist beneficiaries attempting to work.

(3) SSA should continue and expand its efforts to automate processing of work reports and

increase coordination of work reporting across the SSI and DI benefit programs.

(4) SSA should significantly improve outreach efforts to beneficiaries to inform them of the

existence, advantages, and reporting requirements of various work incentives.

Ticket to Work Program

(5) Congress should expand Ticket eligibility to include beneficiaries whose conditions are

expected to improve and who have not had at least one continuing disability review,

childhood SSI beneficiaries who have attained age 18 but who have not had a

redetermination under the adult disability standard, and beneficiaries who have not attained

age 18. It is important to note that if Congress were to adopt this recommendation, there

would be additional costs associated with its implementation and therefore, by Office of

Management and Budget (OMB) rules, there would be a requirement to provide an offset to

pay for the change.

(6) SSA should review and modify the TTW regulations to ensure that Ticket assignment

practices do not violate the voluntary nature of the program and beneficiary rights to grant

informed consent.

(7) SSA should design and implement a strong national marketing program that will expand and

intensify its efforts to inform beneficiaries about the TTW and other SSA programs.
135

Facilitating Beneficiary Choice

(8) Congress should authorize and direct SSA, RSA, CMS, HUD, and the DOLs Employment

and Training Administration (DOLETA) to develop and implement an integrated benefits

planning and assistance program that coordinates resources and oversight across several

agencies, enabling beneficiaries to access benefits planning services within multiple federal

systems.

(9) SSA should consider changes to the existing BPAO initiative to improve the accuracy and

quality of services provided to individual beneficiaries.

Reducing SSA Overpayments to Beneficiaries

(10) SSA should expand its efforts to increase the use of electronic quarterly earnings data and

automated improvements to expedite the processing of work activity and earnings that affect

eligibility and benefits.

(11) SSA should pilot the creation of centralized work continuing disability review (CDR)

processing in cadres similar to Plan for Achieving Self-Support (PASS) and special disability

workload cadres.

(12) Congress should direct SSA to enhance its efforts to educate beneficiaries on reporting

requirements, the impact of wages on benefits, and available work incentives.

Eliminating the Marriage Penalty

(13) Congress and SSA should undertake a complete review of the SSI program and make

program modifications that eliminate the financial disincentive to marriage inherent in the

present program.

(14) Congress should amend the current Title XVI disability legislation to modify the manner

in which 1619(b) eligibility is applied to eligible couples.
136

Income Issues and Incentives

Easing the SGA Cash Cliff for DI Beneficiaries

(15) Congress should modify the current Title II disability legislation to eliminate SGA as a

post-entitlement consideration for continued eligibility for Title II disability benefits.

(16) Congress should modify the current Title II disability legislation to provide for a gradual

reduction in DI cash benefits based on increases in earned income.

(17) Congress should modify the current Title II disability legislation to establish a system of

continuation of program eligibility for DI beneficiaries through the creation of a beneficiary

nonpayment status.

Reducing Restrictions on Assets for SSI Beneficiaries

(18) Congress should direct SSA to develop and test program additions and regulatory

modifications that will enable SSI beneficiaries to accumulate assets beyond existing limits

through protected accounts and other savings programs.

(19) SSA should change current program rules and work with other federal agencies to modify

and expand the value of individual development account (IDA) programs to SSA

beneficiaries.

Decreasing the Complexity of the DI/SSI Program Rules Governing Income and

Resources

(20) Congress should direct SSA to simplify regulatory earnings definitions and wage

verification processes so they are consistent across the SSI and DI programs.

(21) Congress should direct SSA to modify regulations related to the treatment of earnings in

the DI program by applying the same rules currently applied in the SSI program.
137

Coordination and Collaboration Among Multiple Public and Private Systems

Health Care System

(22) CMS and SSA should work together closely to modify existing program regulations in

order to uncouple Medicare and Medicaid coverage from DI/SSI cash payments, similar to

the way in which Medicare coverage is currently provided to persons with end-stage renal

disease or to the Medicaid buy-in program.

(23) SSA, CMS, and state Medicaid agencies need to work together to identify and eliminate

the many employment disincentives currently built into the Medicaid waiver, Medicaid buyin, and Health Insurance Premium Payment (HIPP) programs.

(24) SSA and CMS should work collaboratively to examine the Medicare programs for

policies that do not promote paid employment or that encourage earlier application for DI

benefits.

(25) SSA should work collaboratively with other federal agencies to expand benefits

counseling services to include the full range of financial education and advisement services.

(26) Congress should direct SSA and CMS to conduct a complete review of the current

Medicaid and Medicare programs to identify and correct inconsistencies between the two

programs that result in disincentives to employment for beneficiaries.

(27) Congress should direct SSA and CMS to convene a standing task force composed of

representatives of public and private insurance providers, large employers, and small

business to design, implement, and evaluate a series of demonstration activities that will test

the effectiveness of providing a seamless, uninterrupted public-private insurance partnership

in expanding access to health care for individuals with disabilities.

Vocational Rehabilitation System

(28) SSA should modify TTW program regulations to allow SSAs traditional VR cost

reimbursement program to carry on as a parallel program to the Employment Network (EN)

outcome or outcome-milestone payment mechanisms.
138

(29) SSA should modify the TTW regulations to ensure that an EN is able to accept Ticket

assignment from a beneficiary, refer that individual to a VR agency for needed services, and

not be required to reimburse the VR agency for those services.

Federal Employment and Training System

(30) SSA should undertake an analysis of the impact of allowing DOL One-Stop Career

Centers to receive cost reimbursement payments for successfully serving beneficiaries under

the TTW program.

(31) Congress should direct SSA and the DOLETA to evaluate the impact of the WIA

performance standards on beneficiary participation in WIA programs, and design and test a

set of waivers that will assist beneficiaries to access and benefit from WIA core and intensive

services, as well as individual training accounts.

(32) Congress should direct SSA and DOL to evaluate the effect of changing unemployment

insurance (UI) policies to all the payment of benefits when combined with vocational

rehabilitation or other employment support services, instead of denying UI benefits to

individuals who are sick or injured.

Educational System

(33) Congress should direct SSA to expand the current student earned income exclusion

(SEIE) and the Plan for Achieving Self-Support (PASS) to encourage involvement of SSA

beneficiaries in postsecondary education and training.

(34) SSA should work with the Department of Education to ensure that benefits planning and

financial management services are available to the transition-aged population.

(35) Congress should consider a policy change that would disregard all earned income and

asset accumulation limits for beneficiaries who are transitioning from secondary education to

postsecondary education or employment for at least one year after education or training is

completed.
139

Employers, Business Community, and Private Insurance Industry

(36) Congress should direct SSA and the IRS to evaluate the possible effects of a disabled

worker tax credit as a means of increasing the use of disability management programs in

business to prevent progression of injured and disabled workers onto the public disability

rolls.

(37) Congress should direct SSA to collaborate with the Small Business Administration

(SBA) and the Rehabilitation Services Administration (RSA) to develop and implement an

employer outreach program targeted toward small and mid-size businesses.

(38) SSA should examine ways to encourage beneficiaries to establish small businesses or

microenterprises as an alternative to traditional wage employment.
140
141

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A review of the literature. Work 19: 8793.

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toward a more work-focused disability definition for Social Security Administration (SSA)

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150

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151

Appendix A: Methodology

Introduction

Between July 2004 and March 2005, a comprehensive qualitative research study was conducted

under the direction of NCD that (1) examined efforts of the Social Security Administration to

implement its SSI and SSDI disability programs; (2) documented philosophical, programmatic,

and regulatory obstacles for SSA beneficiaries to return to work; and (3) identified evidencebased practices that promote the return to work of working-age beneficiaries. The final outcome

of the study was the compilation of recommendations for policy changes necessary to facilitate

the successful implementation of evidence-based practices.

Research Questions

The specific research questions addressed in the study were:

(1) What are the evidence-based practices that promote the return to work of working-age

beneficiaries of the DI and SSI programs?

(2) What policy changes are needed, given recent trends in program participation and

employment?

(3) Are there proven and documented practices that work best for some populations of people

with disabilities and not others?

(4) Which factors ensure that documented and evidence-based practices could be

adapted/adopted by SSA and other entities that seek to ensure the employment of people with

disabilities? Which factors prevent adaption/adoption?

Implementation of the Study

A four-step approach was used to implement the study. First, a comprehensive literature

synthesis was completed to identify all information of relevance to the proposed study. Second,

34 detailed structured interviews were conducted with key stakeholders, including federal SSA

officials, representatives of other federal agencies, consumer and advocacy organization

representatives, service organizations, community service providers, and business

representatives. Third, NCD and its researchers developed a preliminary list of findings,

evidence-based practices, and recommendations based on the literature review and structured

interviews through the development of seven topic papers, and then convened a consensus

building conference that allowed individuals with disabilities, advocacy organizations, service

providers and policymakers to react to and further develop the proposed recommendations.

Fourth, was the development of the comprehensive study report. The information which follows

describes the methodology used to implement the process used for the study.
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Identification of Evidence-Based Practices

The approach to this task involved the development and synthesis of a research database of

studies related to return to work for working-age individuals with disabilities. This database

includes studies not only of SSA disability beneficiaries, but any individuals whose disabilities

are comparable to those of beneficiaries regardless of their SSA status. The rationale for this

higher level of inclusiveness is that it will allow identification of evidence-based practices not

only for SSI and DI beneficiaries, but also those designed for nonbeneficiaries that may be

applicable or adaptable to the SSI and DI populations.

A thorough and comprehensive search of the existing professional literature was conducted

through online bibliographic resources, through Social Security and other governmental

resources, World Wide Web searches, and direct communications with the research community.

Relevant studies were analyzed and recommendations that were made were identified. This

research database will be made publicly available to encourage submissions from the field and to

enhance the validity of the effort as well as to benefit various constituencies, particularly federal,

state and local disability organizations, policymakers and researchers.

Conducting the Literature Search

Keyword and subject index searches. The initial means of searching for research were through

databases available through the researchers university library system, which included the

following: (1) Databases of professional journal citations, including educational, rehabilitation,

and policy-related journals; (2) the library card catalog; (3) card catalogs for all public

universities and most private universities in the Central Virginia area; and (4) databases of

Federal Government documents, including the GPO Monthly Catalog, Government Information

Resources, and the Government Periodicals Index.

Table 1 provides a partial list of the educational and social services databases available through

the library system. Keywords used to search for relevant studies included Social Security

beneficiaries, disabilities and return-to-work/employment/work.
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Table 1

Databases Available Online Through the UNIVERSITY Library System

ArticleFirst

Arts and Humanities Citation Index

Directory of Electronic Journals

Dissertation Abstracts Online

Education Abstracts

Education Resources Information

Center

Expanded Academic ASAP

FirstSearch Databases

General Science Abstracts

Humanities Abstracts

Lexis-Nexis Universe

PubMed/MEDLINE

netLibrary

Ovid Web Gateway Databases

PAIS: Public Affairs Information

Service

PapersFirst Proceedings Index of

Conference Papers and Publications

Project MUSE (Johns Hopkins

University Press)

PsycINFO Psychological Abstracts

Social Sciences Abstracts

Sociological Abstracts

Web of Science

WebSpirs Databases

Citation searching. An alternative means of searching for specific articles is to search by

citation. This method came into play as studies were suggested by the projects consultants and

collaborators, and by those in the field. Citation searching involved searching by researcher

names, affiliation, publication dates, journal, or title keywords.

Obtaining copies of published research. In order to assess a studys quality and enter it into the

database, abstract alone did not suffice and it was necessary to obtain a hard copy or electronic

copy of the complete study. For those studies that are identified as potentially useful which are

not available through subscriptions or the university library collections, they were obtained

through either purchasing directly from the publisher, or using interlibrary loan and journal

article retrieval agreements with other universities within Virginia.

Federally funded research and demonstrations. Most federal agencies have one or more

offices that support research and demonstration projects through discretionary grants. As a major

part of the search effort, employment-focused research studies were sought that related to

individuals with disabilities, including Social Security disability recipients (youth and adults)

that have been funded through these offices. Attempts were made to obtain final reports or other

research summaries.

Fugitive literature. One of the common oversights in research synthesis is de-emphasizing the

so-called fugitive literature. This term denotes material that cannot be located through

traditional, commonly used sources (Rosenthal, 1994). Pursuing the fugitive literature serves as

an assurance that the literature search has been exhaustive and that all viable studies are

included. The methods used to accomplish this objective included Web browsing, Listserv and

USENET browsing, and snowball sampling, which involved personal contacts through research
154

and demonstration projects, state and local educational agencies, university programs, technical

assistance providers, and others.

Analysis of the Literature

Once a relevant study was identified, it was analyzed for its relevancy. The purpose,

methodology, and results were summarized and recommendations that were made were

identified.

Developing the Research Database

A database of research literature related to employment outcomes for individuals with

disabilities, including SSI and DI beneficiaries was developed. This includes a summary of the

purpose of the study, methodology, results, and recommendations that were made.

Data Management

A Microsoft Access data table was created, containing the following fields:

Record ID Primary Author

Additional Authors (up to 7) Year of Publication

Title of Work Cited Source

Volume Pages

Citation is from a book (yes or no) Book Author/Editor

Publisher City, State

Purpose Methodology/Sample

Results Recommendations

Work Cited is nonempirical (yes or no) Article Availability (URL)

In addition, a user interface was designed for data entry. Each articles analysis came in the form

of a Microsoft Word document so that data entry could be conducted in copy/paste fashion. If

necessary, the citations were modified to meet ADA formatting standards before entry into the

database. Then, components of the analysis were copied and pasted into the appropriate fields.

Each analysis was assigned a unique ID in the database, and the Word filename was edited to

contain that ID so that each record in the database will be associated with its corresponding

physical Word file.

Database Development and Making it Web Accessible. A copy of the Microsoft Access

database was put on a Web server and it was registered as a data source with ColdFusion MX.

From there, the search engine functionality was built using ColdFusion MX as well as the

integrated Verity search tool that ships with ColdFusion MX. Once the search capability was
155

running, the Web-based forms were built to allow for the adding of new research literature to the

database via a Web browser, as well as the editing of existing literature. A Web page was finally

constructed to allow users to view a listing of the research in the database, which can be sorted

on a number of fields.

User feedback. The database was made accessible to project consultants and collaborators

during its development and they were asked to provide input into its development to enhance

quality and usefulness. This allowed users to submit or recommend research or publications not

listed to be analyzed and added to the database, allowed users to monitor and critique our quality

assessments enhances our coding reliability; as well as modify the database in order to enhance

its functionality and user-friendliness.

Key Stakeholder Interviews

The research method used for this part of the study consisted of structured telephone interviews

with members of eight targeted stakeholder groups. No more than nine interviews using the same

questions was used within each of the targeted groups. Table 2 below identifies the affiliations of

the stakeholder who participated in the interviews. A total of 55 individuals were identified as

key stakeholders by the NCD Employment Team. Of these, 34 individuals were interviewed

between October 2004 and January 2005.

TABLE 2

NCD SOCIAL SECURITY STUDY

INTERVIEWS COMPLETED

KEY STAKEHOLDER AFFILIATION

Social Security Administration Offices

Office of Program Development and Research

Office of Employment Support Programs

TWWIIA Advisory Panel

SSA Initiatives

State Partnership Initiative (SPI) Projects

Protection and Advocacy for Beneficiaries of Social Security (PABSS)

Benefits Planning, Assistance, and Outreach (BPAO) Projects

Employment Networks

Youth Transition Initiative

Early Intervention Demonstration Projects

Federal Partners

DOE Office of Special Education and Rehabilitation Services (OSERS)

HHS Administration on Developmental Disabilities (ADD)
156

State and Regional Offices

State Protection & Advocacy Services

State Vocational Rehabilitation Agencies

Workforce Investment Boards

Disability Program Navigators

State WIG Grants

State MIG Grants

Governors Committee on Employment of Persons with Disabilities

Consumer Organizations

National Council on Independent Living (NCIL)

Paralyzed Veterans of America

Speaking for Ourselves

National Association of People with AIDS

American Council of the Blind (ACB)

National Federation of the Blind (NFB)

Advocacy Organizations

Consortium for Citizens with Disabilities (CCD)

American Association of People with Disabilities (AAPD)

Association of Persons in Supported Employment (APSE)

National Association of the Deaf (NAD)

Self Help for Hard of Hearing People (SHHH)

National Organization of Social Security Claimants Representatives

The Arc

Service Organizations

National Industries for the Blind (NIB)

Goodwill

Business Organizations

U.S. Chamber of Commerce

Potential respondents were initially contacted by phone or email by the researchers to solicit their

participation. A script of the recruitment is attached. If the potential respondent agreed to be

interviewed, the staff person coordinating the interview process made sure that the consent

statement, a copy of the designated questions, and a one-page description of the study was sent to

them for preview. An appointment time for the telephone interview was then set-up.

Interviews were conducted using a three-way teleconference that included (1) the interviewer,

(2) the participant, and (3) a note-taker. The interview began with a re-reading of the verbal
157

consent statement, and a verbal confirmation from the respondent that he/she consented to be

interviewed. The verbal consent statement was sent to each respondent prior to the interview.

Using the state teleconference provider, each interview was audio recorded, and participants

were appropriately informed that they were being recorded prior to the interview taking place.

After each interview, audio recordings and notes were then summarized by the note taker.

Interview summaries were emailed by the interviewer to each respondent, who had the

opportunity to edit his or her responses for clarification or to remove potentially risky statements.

Only participant-edited summaries and verified comments were made available for analysis.

Data were analyzed descriptively, reviewing the interview summaries and notes to identify

themes, commonalities, and patterns of responses. The data were then analyzed within

respondent categories and across all respondents. These themes and patterns were then organized

and used in the development of the topic papers.

Development of Topic Papers

In December, NCDs researchers developed seven topic papers, also referred to as white

papers, that synthesized the findings from the evidence-based practices reviewed to date with

the findings from the interviews with the key stakeholders. These topic papers were distributed

to invited participants of the Consensus Validation Conference that was convened in late January

in Washington, D.C. The purpose of developing the topic papers was to present a written

discussion of key issues that affect the employment of beneficiaries so that invited participants

could react to the information and identify additional issues that should be prioritized and

included in the study report.

The topic papers were authored by the researchers, consultants, and leading experts on the

employment of people with disabilities. The titles of the papers and their authors were:

Evidence-Based Practices that Promote Employment of People with Disabilities

Authors: Gary Bond, Paul Wehman, and David Wittenburg

Lessons from the Foreign Experience: How Some Other Countries Deal with the

Current United States Barriers to Employment of People with Disabilities

Author: Ilene Zeitzer

SSAs Current Efforts to Implement the Ticket to Work and Work Incentive

Improvement Act

Author: John Kregel

Post Eligibility Policies and Procedures: Eliminating Disincentives to Employment in

the SSA Benefits Program

Author: Susan OMara, JoAnne Malloy, and Tobey Partch-Davies

Early Intervention and Diversion Strategies as a Means for Stemming the Growth in

Social Security Disability Programs

Author: Lucy Miller
158

Public and Private Health Coverage for Social Security Disability Beneficiaries who

Work

Authors: Toni Lee Acevedo, Omar Kahn, and Bryon MacDonald

Beneficiary Experiences: Entitlement and Return to Work for Social Security Disability

and SSI Beneficiaries

Author: Terri Uttermohlen

Consensus Validation Conference

NCD and its researchers conducted a Consensus Validation Conference as part of the Social

Security Study on January 26, 2005 at the National Press Club in Washington, D.C. Of the 103

invited participants, 69 individuals registered to attend the conference, and 64 researchers,

policymakers, service providers and consumers, including former and current SSI and DI

beneficiaries, attended the one-day conference. This number does not include the NCD Council

Members, staff and the research team who were present.

Proceedings

The agenda for the conference was divided into a number of plenary sessions followed by small

group working sessions. There were seven groups, each directly related to the seven topic papers

sent out a few days previous to the conference to the participants assigned to each group.

Assignment of participants was based on expertise, experience and the desire to have as much

diversity in roles in each group as possible.

Each small topic paper group followed the same process with minor modifications being made as

accommodations to ensure full participation:

Identification of key points from the topic paper.

Identification of findings that should have been in the topic paper but were not.

Clustering together the identified findings that were similar and assigning a descriptive

phrase.

Voting by each group on the findings in each cluster by coding according to the following

color scheme:

Red = you agree with the finding and believe that most other individuals in your field

would agree as well

Green = you agree with a finding but do not necessarily believe it is the consensus of

your field

Yellow = you agree with the finding but believe it has a long way to go to becoming

consensus

Leave Blank = you do not agree with the finding

(Note: All findings were read out loud and ranking was done verbally in the small groups for the

benefit of participants who had low vision or who were blind.)
159

After presentation of findings in a plenary session, each individual participant had the

opportunity to vote on the single finding, from among all findings, that was felt to be most

important. These consensus findings were represented by red hearts.

Data Analysis

After the conference, all findings were listed by topic group and categorized according to the

cluster in which they were placed. The number of specific codes awarded through team vote by

group members was recorded as well as whether a particular finding had been prioritized through

the consensus vote done by all participants. Identification as to whether the finding came directly

from the white paper or had been added by the topic group was identified by an asterisk (*).

All findings which received at least one consensus vote were then grouped together according to

topic group and according to its assigned cluster. After examination of the findings, themes

began to emerge and coding was again used for grouping purposes.

Results

The themes that emerge from the analysis of the consensus validation conference data fall into

four trends:

Definition of Disability. There was much diversity in how the small groups identified the

issue of definition of disability. Discussion ranged from how the current definition differs

from an international perspective of work incapacity to the presumption made by the current

definition that beneficiaries have the inability to work. No recommendations were made as to

what the definition of disability should be.

Coordination/Collaboration Among Systems. Increased coordination and communication

across federal Agencies for policy alignment was discussed. Also identified was the need for

SSA to increase coordination with Vocational Rehabilitation Services and employers at all

levels within the framework of the Ticket to Work programs.

Beneficiary Focus and Control. Discussion focused on the need for increased individual

planning and choice with work incentives. Improved customer focus and simplification of

rules that directly affect beneficiaries were recommended.

Income Issues and Incentives. This area was approached in small group discussions at both

the systems and individual beneficiary levels. Recommendations were made for specific

change to individual incentives, but also recommendations by a number of small groups were

made for a comprehensive approach to policy change that would allow for increased earnings

without the current penalties encountered by beneficiaries.

All trends but the Definition of Disability have a research base as identified in one or more of

the topic papers. The strength in the number of participants who identified Definition of

Disability was unexpected, but is explored in the study report.
160

Next Steps

NCD has taken the findings from the consensus validation conference and triangulated them with

the information obtained from the key stakeholder interviews, the recommendations emanating

from the topic papers, and any additional findings from the continuing literature search on

evidenced based practices and has used them in the development of the final study report.

Use of NCD Employment Team for Advice and Feedback

Throughout the studys implementation process, there were at least monthly contacts made

between the researchers and the NCD Employment Team. The feedback received from Team

members and staff was invaluable for the implementation of the study. A monthly conference

call was held with the Employment Team, and communication occurred with NCD staff multiple

times in any given week.

It was the researchers intent to include the Employment Team in every step of the studys

process so that Team members were fully aware of any issues that were encountered and could

provide advice in how to address any issues that were encountered. This proved to be especially

helpful in addressing concerns that arose from SSA during the key stakeholder interview phase

of the study. Also Team members provided names and contact information of a number of key

stakeholders who were interviewed as part of the study.
161

Appendix B: Results of Literature Review to Identify

Evidence-Based Practices

Topic Papers Used for Discussion at the Consensus Validation Conference

Acevedo, T.L., O. Kahn, and B. MacDonald. (2005). Public and private health coverage for

Social Security Disability beneficiaries who work. Richmond, VA: Virginia Commonwealth

University, NCD Social Security Study. Retrieved July 12, 2005, from

www.worksupport.com/research/viewContent.cfm/510.

Bond, G.R., P. Wehman, and D. Wittenburg. (2005). Evidence-based practices that promote

employment of people with disabilities. Richmond, VA: Virginia Commonwealth University,

NCD Social Security Study. Retrieved July 12, 2005, from

www.worksupport.com/research/viewContent.cfm/505.

Kregel, J. (2005). SSAs current efforts to implement the Ticket to Work and Work Incentive

Improvement Act. Richmond, VA: Virginia Commonwealth University, NCD Social Security

Study. Retrieved July 12, 2005, from www.worksupport.com/research/viewContent.cfm/507.

Miller, L. (2005). Early intervention and diversion strategies as a means for stemming the

growth in Social Security disability programs. Richmond, VA: Virginia Commonwealth

University, NCD Social Security Study. Retrieved July 12, 2005, from

www.worksupport.com/research/viewContent.cfm/509.

OMara, S., J. Malloy, and T. Partch-Davies. (2005). Post-eligibility policies and procedures:

Eliminating disincentives to employment in the SSA benefits program. Richmond, VA: Virginia

Commonwealth University, NCD Social Security Study. Retrieved July 12, 2005, from

www.worksupport.com/research/viewContent.cfm/508.

Uttermohlen, T. (2005). Beneficiary experiences: Entitlement and return to work for Social

Security Disability and SSI beneficiaries. Richmond, VA: Virginia Commonwealth University,

NCD Social Security Study. Retrieved July 12, 2005, from

www.worksupport.com/research/viewContent.cfm/511.

Zeitzer, I. (2005). Lessons learned from the foreign experience: How some other countries deal

with the current United States barriers to employment of people with disabilities. Retrieved July

12, 2005, from www.worksupport.com/research/viewContent.cfm/506.

Results of the Literature Review

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Alston, R.J. (2004). African Americans with disabilities and the Social Security

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164

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Appendix C: Mission of the National Council on Disability

Overview and purpose

The National Council on Disability (NCD) is an independent federal agency with 15 members

appointed by the President of the United States and confirmed by the U.S. Senate. The purpose

of NCD is to promote policies, programs, practices, and procedures that guarantee equal

opportunity for all individuals with disabilities regardless of the nature or significance of the

disability and to empower individuals with disabilities to achieve economic self-sufficiency,

independent living, and inclusion and integration into all aspects of society.

Specific duties

The current statutory mandate of NCD includes the following:

Reviewing and evaluating, on a continuing basis, policies, programs, practices, and

procedures concerning individuals with disabilities conducted or assisted by federal

departments and agencies, including programs established or assisted under the

Rehabilitation Act of 1973, as amended, or under the Developmental Disabilities Assistance

and Bill of Rights Act, as well as all statutes and regulations pertaining to federal programs

that assist such individuals with disabilities, to assess the effectiveness of such policies,

programs, practices, procedures, statutes, and regulations in meeting the needs of individuals

with disabilities.

Reviewing and evaluating, on a continuing basis, new and emerging disability policy issues

affecting individuals with disabilities in the Federal Government, at the state and local

government levels, and in the private sector, including the need for and coordination of adult

services, access to personal assistance services, school reform efforts and the impact of such

efforts on individuals with disabilities, access to health care, and policies that act as

disincentives for individuals to seek and retain employment.

Making recommendations to the President, Congress, the Secretary of Education, the director

of the National Institute on Disability and Rehabilitation Research, and other officials of

federal agencies about ways to better promote equal opportunity, economic self-sufficiency,

independent living, and inclusion and integration into all aspects of society for Americans

with disabilities.

Providing Congress, on a continuing basis, with advice, recommendations, legislative

proposals, and any additional information that NCD or Congress deems appropriate.

Gathering information about the implementation, effectiveness, and impact of the Americans

with Disabilities Act of 1990 (ADA) (42 U.S.C. § 12101 et seq.).

Advising the President, Congress, the commissioner of the Rehabilitation Services

Administration, the assistant secretary for Special Education and Rehabilitative Services

within the Department of Education, and the director of the National Institute on Disability

and Rehabilitation Research on the development of the programs to be carried out under the

Rehabilitation Act of 1973, as amended.
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Providing advice to the commissioner of the Rehabilitation Services Administration with

respect to the policies and conduct of the administration.

Making recommendations to the director of the National Institute on Disability and

Rehabilitation Research on ways to improve research, service, administration, and the

collection, dissemination, and implementation of research findings affecting people with

disabilities.

Providing advice regarding priorities for the activities of the Interagency Disability

Coordinating Council and reviewing the recommendations of this council for legislative

and administrative changes to ensure that such recommendations are consistent with

NCDs purpose of promoting the full integration, independence, and productivity of

individuals with disabilities.

Preparing and submitting to the President and Congress an annual report titled National

Disability Policy: A Progress Report.

International

In 1995, NCD was designated by the Department of State to be the U.S. governments official

contact point for disability issues. Specifically, NCD interacts with the special rapporteur of the

United Nations Commission for Social Development on disability matters.

Consumers served and current activities

Although many government agencies deal with issues and programs affecting people with

disabilities, NCD is the only federal agency charged with addressing, analyzing, and making

recommendations on issues of public policy that affect people with disabilities regardless of age,

disability type, perceived employment potential, economic need, specific functional ability,

veteran status, or other individual circumstance. NCD recognizes its unique opportunity to

facilitate independent living, community integration, and employment opportunities for people

with disabilities by ensuring an informed and coordinated approach to addressing the concerns of

people with disabilities and eliminating barriers to their active participation in community and

family life.

NCD plays a major role in developing disability policy in America. In fact, NCD originally

proposed what eventually became ADA. NCDs present list of key issues includes improving

personal assistance services, promoting health care reform, including students with disabilities in

high-quality programs in typical neighborhood schools, promoting equal employment and

community housing opportunities, monitoring the implementation of ADA, improving assistive

technology, and ensuring that people with disabilities who are members of diverse cultures fully

participate in society.

Statutory history

NCD was established in 1978 as an advisory board within the Department of Education (P.L. 95-

602). The Rehabilitation Act Amendments of 1984 (P.L. 98-221) transformed NCD into an

independent agency.
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