Report to Congressional Committees

United States General Accounting Office

GAO

September 2002 SSA DISABILITY

Enhanced Procedures

and Guidance Could

Improve Service and

Reduce Overpayments

to Concurrent

Beneficiaries

GAO-02-802
Page i GAO-02-802 Coordination of DI and SSI Programs

Letter 1

Results in Brief 2

Background 3

There Are Over 1 Million Concurrent Beneficiaries and Few Work 8

Little Coordination of DI and SSI Programs Exists for Concurrent

Beneficiaries Who Work 12

The Application of Both DI and SSI Rules Makes It Difficult for

Concurrent Beneficiaries to Make Informed Decisions about

Work Activity 16

Conclusions 21

Recommendations for Executive Action 22

Agency Comments and Our Evaluation 22

Appendix I Scope and Methodology 25

Appendix II Comments from the Social Security Administration 27

Tables

Table 1: DI and SSI Work Incentive Provisions 6

Table 2: Percentage of Working Concurrent and SSI Beneficiaries’

Monthly Earnings at Various Levels 11

Figures

Figure 1: Primary Impairments of All Concurrent Beneficiaries and

Concurrent Beneficiaries Who Worked 9

Figure 2: Effect of Earnings on the DI and SSI Benefits of a

Concurrent Beneficiary 18

Abbreviations

DI Disability Insurance

PSC program service centers

SSA Social Security Administration

SSI Supplemental Security Income

Contents
Page 1 GAO-02-802 Coordination of DI and SSI Programs

September 5, 2002

The Honorable Max Baucus

Chairman

The Honorable Charles E. Grassley

Ranking Minority Member

Committee on Finance

United States Senate

The Honorable Bill Thomas

Chairman

The Honorable Charles B. Rangel

Ranking Minority Member

Committee on Ways and Means

House of Representatives

In calendar year 2001, the Social Security Administration (SSA) paid cash

benefits of nearly $60 billion to more than 6 million working-age adults

with disabilities and eligible family members under its Social Security

Disability Insurance (DI) program,1

 and nearly $20 billion to more than

3.5 million working-age adults with disabilities under the Supplemental

Security Income (SSI) program. In addition to cash benefits, the DI

program provides access to Medicare and for most beneficiaries the SSI

program provides access to Medicaid. Some beneficiaries, known as

concurrent beneficiaries, receive cash and medical benefits from both

programs. To encourage beneficiaries to return to work, the DI and SSI

programs offer work incentives that are designed to lessen the effect of

earnings on benefits, by allowing beneficiaries to test their ability to work

without losing all benefits. However, many of the work incentives in the

two programs differ. These differences can create challenges for SSA in

administering these programs for concurrent beneficiaries.

 1

In addition to disability beneficiaries who qualified on the basis of their own work records,

we are considering in the category of the DI program for purposes of this report, all

disability benefits paid from the Old-Age, Survivors, and Disability Insurance trust funds to

disability beneficiaries age 18-64 who qualified on the work record of a deceased, retired,

or disabled parent; as well as disability beneficiaries age 50-64 who qualified on the work

record of a deceased spouse.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-02-802 Coordination of DI and SSI Programs

The Ticket to Work and Work Incentives Improvement Act of 1999

(P.L. 106-170) requires us to assess the coordination of the DI and SSI

programs for individuals who are concurrently entitled to benefits. This

report discusses (1) the characteristics of concurrent beneficiaries, (2) the

extent to which SSA coordinates the DI and SSI program rules when

individuals are working and concurrently receiving benefits from both

programs, and (3) the potential effect of applying both DI and SSI program

rules on concurrent beneficiaries’ decisions to work and on their benefits.

To address these issues, we analyzed data from SSA’s Characteristic

Extract Record for September 2001 and February 2002. This record

contains information used to determine the eligibility for SSI benefits. We

interviewed SSA officials at their headquarters in Baltimore, Maryland, and

at seven field offices. We also interviewed academic researchers,

advocates for people with disabilities, and a small number of disability

beneficiaries. In addition, we reviewed SSA laws, regulations, and policies

on the work incentive provisions of the two programs. We performed our

work in accordance with generally accepted government auditing

standards from September 2001 through August 2002. (See app. I for a

detailed description of our scope and methodology.)

Concurrent beneficiaries comprised about 14 percent of SSA’s disability

population; 58 percent have mental impairments and about 53 percent are

female. About 11 percent of concurrent beneficiaries worked and earned a

median income of approximately $250 per month. More than threequarters of those who worked received benefits on the basis of mental

illness or mental retardation. The proportion of individuals with mental

retardation who worked was twice the proportion of concurrent

beneficiaries with mental illness. However, working concurrent

beneficiaries with mental retardation earned much less that those with

mental illness.

There is little coordination between SSI and DI program rules for

individuals who work and receive benefits from both programs

concurrently. Because most field office staff specialize in one program,

they may not be sufficiently knowledgeable of the procedures for the other

program to ensure that concurrent beneficiaries who work are paid the

appropriate benefit amount under both programs. The guidance SSA

provides to assist staff in this task is not well-integrated or sufficiently

cross-referenced to help busy field office staff determine what actions to

take when current beneficiaries work. In addition, SSA has not established

procedures to ensure that both DI and SSI program staff receive

Results in Brief
Page 3 GAO-02-802 Coordination of DI and SSI Programs

information related to concurrent beneficiaries’ work activity. Moreover,

SSA does not monitor the overall processing of work activity and may not

always take timely action, especially for DI benefits, which can result in

overpayment of DI benefits for concurrent beneficiaries even when

beneficiaries report their work in a timely manner. SSA recently took steps

to improve service to concurrent beneficiaries, including testing the use of

a field office employee specially trained in work issues and developing a

new computer system to collect information about work. However, it is

too early to know whether these initiatives will have the intended effect.

Applying both SSI and DI program rules to concurrent beneficiaries may

make it difficult for them to make informed decisions about attempting

work and could result in an increase or decease in overall income,

depending on the amount of earnings. Concurrent beneficiaries may not

receive adequate explanations from SSA staff or from published materials

about the complete effect work has on their disability benefits. However,

because the rules are complex and may be difficult to understand even

with a detailed explanation, beneficiaries who do not understand them

could possibly make decisions about work that would not meet their

needs or improve their situation.

We make recommendations in this report that SSA develop methods for

collecting information and sharing it across the DI and SSI programs and

improve management information systems for tracking work activities of

concurrent beneficiaries. We also recommend that SSA improve its

guidance to employees regarding concurrent beneficiaries as well as

develop new public information materials specifically for concurrent

beneficiaries.

SSA provided comments on a draft of this report. SSA agreed with our

conclusions and highlighted initiatives either planned or underway that it

believes will address our recommendations.

SSA administers two programs that provide benefits for individuals who

are unable to work because of disability. Although they differ with respect

to program purpose and requirements for entitlement, both DI and SSI use

the same definition of disability for initial entitlement. Specifically, in

order to be found disabled, an individual must have a medically

determinable physical or mental impairment that (1) has lasted or is

Background
Page 4 GAO-02-802 Coordination of DI and SSI Programs

expected to last at least one year or result in death and (2) prevents an

individual from engaging in substantial gainful activity.2

DI was established in 1956 as an insurance program to help replace

earnings lost because of disability. To be eligible for benefits, individuals

with disabilities must have a specified number of recent work credits

under Social Security based on age as of onset of disability. Individuals

may also be able to qualify on the work record of a deceased, retired, or

disabled parent or a deceased spouse. Benefits are financed by payroll

taxes paid by covered workers and their employers, and are linked to the

worker’s earnings history. In most cases, individuals who have been

entitled to DI benefits for 24 months qualify for Medicare.

The SSI program was established in 1972 to provide a standard minimum

level of income for individuals with disabilities, as well as aged individuals,

who have limited income and assets. Eligibility does not require a past

work history. Benefits are paid from general revenues and, in general,

most beneficiaries are eligible for the same benefit amount. However,

other income counts against this benefit amount, usually resulting in a

reduction in that amount. In most states, entitlement to SSI means

automatic entitlement to Medicaid.

Most beneficiaries qualify for either one program or the other; however,

receipt of benefits under one program does not necessarily preclude

entitlement under the other program. Beneficiaries who are receiving one

benefit may transition to the other benefit or they may receive both

benefits concurrently. Receiving an SSI benefit has no bearing on

continuing entitlement to DI benefits. However, because SSI is a meanstested program, the amount of the DI benefit must be considered in

determining whether an individual with a disability also qualifies for SSI. If

the amount of the DI benefit is low and all other income and resource

factors are met, a DI beneficiary may also receive an SSI benefit.

Concurrent beneficiaries who are covered by Medicaid and who have been

entitled to DI long enough to qualify for Medicare may also be eligible for

payment of their Medicare premiums and co-payments by their state. The

minimum value of these payments would be $54.00 a month.

 2

SSA considers individuals to engage in substantial gainful activity if they have countable

earnings above a certain dollar level. For 2002, the dollar level was $780 a month ($1,300 a

month for legally blind beneficiaries).
Page 5 GAO-02-802 Coordination of DI and SSI Programs

Both programs feature work incentive provisions that are intended to

encourage beneficiaries to return to work. However, the provisions of the

two programs differ significantly, providing different levels of safeguards

for continuing eligibility, income, and medical coverage for DI and SSI

beneficiaries. For example, earnings, regardless of the amount, do not

affect a DI beneficiary’s cash benefit for a period of time known as the trial

work period. However, benefits will eventually stop completely after this

period if earnings exceed a specified level. In contrast, earnings can affect

an SSI beneficiary’s cash benefit immediately but the reduction in benefits

is gradual with a reduction in benefits of $1 for every $2 earned over the

first $65. Table 1 highlights each program’s work incentive provisions in

effect at the time the Ticket to Work and Work Incentives Improvement

Act of 19993

 called for this study. Even with the work incentive provisions

in the two programs, relatively few disability beneficiaries work and no

more than 1 percent leave the DI and SSI beneficiary rolls each year

because of their work.

 3

This act provides for additional extensions of medical insurance and new options for

reinstating eligibility if beneficiaries stopped working as well as demonstration projects

providing for earned income exclusions under DI.
Page 6 GAO-02-802 Coordination of DI and SSI Programs

Table 1: DI and SSI Work Incentive Provisions

Provisions by programa

Type of

safeguard DI SSI

Income Impairment-related work expenses: Allows the costs of

certain impairment-related items and services needed to

work and paid for by the beneficiary to be deducted from

gross earnings in determining whether earnings indicate

that the individual has performed substantial gainful

activity.

Subsidies: Allows the value of the support a person

receives on the job to be deducted from earnings to

determine whether earnings indicate that disability has

ended.

Trial work period: Allows beneficiaries to work for 9

months (not necessarily consecutively) within a 60-month

rolling period during which they may earn any amount

without affecting benefits. To qualify as one of the 9

months, earnings must exceed a specified amount

(currently $560 a month). After the trial work period, cash

benefits continue for 3 months and then stop if countable

earnings exceed a specified amount (currently $780 a

month; $1,300 a month for legally blind beneficiaries).

Unsuccessful work attempt: Allows for the exclusion of

brief periods of work activity that stopped because of the

beneficiary’s impairment from the consideration of benefit

cessation following completion of the trial work period.

Extended period of eligibility: Allows for a consecutive

36 month period after the trial work period in which cash

benefits are reinstated for any month countable earnings

fall below a specified level (currently $780 a month;

$1,300 a month for legally blind beneficiaries). This period

begins the month following the end of the trial work

period.

Impairment-related work expenses: Same as DI, except

that these expenses are also deducted from gross

earnings in computing the monthly SSI benefit amount.

Subsidies: Same as DI.

Earned income exclusion: Allows beneficiaries to exclude

half of all earned income in excess of $65 when

determining the SSI payment amount. (In addition,

beneficiaries may exclude from earned income any

portion of the $20 general income exclusion that was not

applied to unearned income.)

Section 1619(a): Allows beneficiaries to continue to

receive SSI cash payments even when monthly earnings

exceed a specified amount (currently $780 a month).

However, as earnings increase the payment decreases.

Plan for achieving self-support: Allows beneficiaries to

exclude from their SSI eligibility and benefit calculation

any income and resources used to achieve a work goal.

Student earned income exclusion: Allows student

beneficiaries under age 22 to exclude higher levels of

earned income than with the regular earned income

exclusion, with both monthly and annual limits on the

exclusion. Eligible students must not be married or the

head of the household.

Blind work expenses: Allows beneficiaries receiving SSI

on the basis of blindness to deduct from gross earnings

the cost of all expenses associated with work activity in

figuring the cash benefit.

Medical

coverage

Continued Medicare coverage: Allows for continued

Medicare coverage for at least 39 months following a trial

work period as long as medical disability continues.

Medicare buy-in: Allows beneficiaries to purchase

Medicare coverage after the 39 month premium-free

coverage ends. Beneficiaries pay the same monthly cost

as uninsured retired beneficiaries pay, but individuals

may be eligible for a reduction in the premium if they or

their spouse or former spouse have a significant work

history.

Section 1619 (b): Allows beneficiaries to continue

receiving Medicaid coverage needed to continue working

even when earnings become too high to allow a cash

benefit. Coverage continues until earnings reach a

threshold amount, which varies in every state.
Page 7 GAO-02-802 Coordination of DI and SSI Programs

Provisions by programa

Type of

safeguard DI SSI

Eligibility Continued benefit while in an approved vocational

rehabilitation program: Allows a person actively

participating in a vocational rehabilitation program to

remain eligible for cash and medical benefits even if he or

she medically improves and is no longer considered

disabled by SSA.

Re-entitlement to cash benefits and Medicare: After a

period of disability ends, allows beneficiaries who become

disabled again within 5 years to be re-entitled to cash and

medical benefits without another 5 month waiting period.

(Different rules apply to beneficiaries who qualify on the

work record of a spouse or parent.)

Continued benefit while in an approved vocational

rehabilitation program: Same as DI.

Property essential to self-support: Allows beneficiaries to

exclude from consideration in determining SSI eligibility

the value of property that is used in a trade or business or

for work. Examples include the value of tools or

equipment.

a

In effect as of December 17, 1999, the date the Ticket to Work and Work Incentives Improvement

Act was signed into law.

Source: GAO Analysis of SSA law, regulations and policy guidance.

DI and SSI beneficiaries who do return to work are responsible for

reporting their work activity to SSA as soon as it occurs. SSA has no

specific provisions for adjusting benefits for concurrent beneficiaries who

work and must apply the work incentive provisions of the two programs

independently to determine whether an individual remains entitled to DI

and SSI and, if so, the amount of each benefit. Most concurrent

beneficiaries interact with SSA through its network of nearly 1,300 field

offices. To cope with the complexity of its programs, most of these field

offices use employees who specialize in either the Social Security

programs, including the DI program, or the SSI program. The remaining

offices use generalist employees who are trained in both programs. To

supplement the information provided by its staff, SSA also publishes

several pamphlets that explain the provisions of the DI and SSI programs.

Two of these publications, Red Book on Employment Support and

Working While Disabled—How We Can Help, provide information about

the effect of work on DI and SSI benefits.
Page 8 GAO-02-802 Coordination of DI and SSI Programs

Concurrent beneficiaries, who comprised about 14 percent of SSA’s

disability population, were likely to have mental impairments and be

female. In addition, their average age was 45. About 11 percent of

concurrent beneficiaries worked and had a median earned income of

about $250 a month. More than three-quarters of those who worked have

mental impairments—mental illness and mental retardation.4 Individuals

with mental retardation worked at twice the rate of beneficiaries with

mental illness, but earned much less. The median earnings of beneficiaries

with mental retardation were nearly half those of beneficiaries with mental

illness.

Of the more than 6 million working-age adults receiving disability benefits

under the DI program and the more than 3.5 million working-age adults

receiving SSI, our analysis of the February 2002 SSA data indicates that,

approximately 1.2 million5

—14 percent—received benefits from both

programs. These beneficiaries were an average age of 45, with fewer than

15 percent between the ages of 17 and 30. In addition, 53 percent were

female. Concurrent beneficiaries received an average DI payment of about

$430 per month and an SSI payment of about $150 per month. The majority

of concurrent beneficiaries qualified for DI benefits on the basis of their

work record. The remainder received benefits on the basis of the work

history of a deceased, disabled, or retired parent (25 percent); or their

deceased spouse (3 percent).

Over half of concurrent beneficiaries had a mental impairment—a third

had mental illness and about a quarter had mental retardation.

Approximately one-ninth of concurrent beneficiaries had an impairment

related to their muscular or skeletal system. The remaining beneficiaries

had one of a wide range of impairments as their primary impairment.

 4

The percentages shown are based on the proportion of those beneficiaries for which a

primary impairment was shown in SSA’s records. SSA records did not show the impairment

for about 8 percent of concurrent beneficiaries. This analysis did not include additional

impairments that may contribute to some beneficiaries’ inability to work.

5

This figure includes individuals who do not receive cash benefits because of the amount of

their earnings, but who remain eligible for Medicaid coverage under the provisions of

section 1619(b).

There Are Over 1

Million Concurrent

Beneficiaries and Few

Work

More than One-half of

Concurrent Beneficiaries

Have Mental Impairments
Page 9 GAO-02-802 Coordination of DI and SSI Programs

Of the approximately 142,000 concurrent beneficiaries who worked,

almost 80 percent had a mental impairment. Concurrent beneficiaries who

worked were more likely to have mental retardation, tended to be

younger, and male. As shown in figure 1, while individuals with mental

retardation made up only a quarter of the concurrent population, they

accounted for over half of the concurrent beneficiaries who worked.

Moreover, nearly half may not have had a significant work history. Instead,

they qualified for benefits on the basis of the work history of a parent or

spouse.

Figure 1: Primary Impairments of All Concurrent Beneficiaries and Concurrent Beneficiaries Who Worked

Source: GAO analysis of SSA data.

Most concurrent beneficiaries who worked earned low wages, but

earnings levels varied by impairment categories. While the median earned

income of all working concurrent beneficiaries was approximately $250

per month, more than one-quarter earned $65 per month or less.6 Workers

with mental retardation had median monthly earnings of about $200,

compared with about $400 for concurrent beneficiaries with mental

 6

Monthly earnings of $65 or less do not affect the SSI benefit amount.

About 11 Percent of

Concurrent Beneficiaries

Work but Earn Relatively

Low Wages

34% • Mental illness

24% • Mental retardation

12%

•

Musculoskeletal

5%

Central nervous system

• 25%

Other

24% • Mental illness

55%

•

Mental retardation

3%

Musculoskeletal

5%

Central nervous system

• 13%

Other

•

•

•

Primary impairments of concurrent beneficiaries Primary impairments of working concurrent beneficiaries
Page 10 GAO-02-802 Coordination of DI and SSI Programs

illness. However, the median earned income for concurrent beneficiaries

eligible for DI benefits on the basis of the work history of a deceased,

disabled, or retired parent was only $85 per month.

A higher proportion of concurrent beneficiaries worked than SSI

beneficiaries,7 but they earned much less. Fewer than 8 percent of SSI

beneficiaries worked, but they had median earnings of $400, compared

with about $250 for concurrent beneficiaries. More than one-quarter of SSI

beneficiaries earned $1,000 per month or more, greater than three times

the percentage of concurrent beneficiaries with earnings at that level.

Table 2 provides the percentage of concurrent and SSI beneficiaries that

were earning at the levels listed. The difference in earnings may be

explained, in part, by the higher proportion of working concurrent

beneficiaries with mental retardation as compared with SSI beneficiaries.

However, this higher incidence of beneficiaries with mental retardation

does not completely explain the difference in earnings since the earnings

for SSI beneficiaries with mental retardation were higher than those for

concurrent beneficiaries with mental retardation. For example, median

monthly earnings for SSI beneficiaries with mental retardation were $250

compared with $200 for concurrent beneficiaries with the same

impairment.

 7

For this report, we are using the term SSI beneficiaries to refer to individuals who receive

SSI benefits only. DI beneficiaries were not considered in this analysis because SSA

records do not allow them to readily distinguish between concurrent beneficiaries and

those who receive only DI benefits.
Page 11 GAO-02-802 Coordination of DI and SSI Programs

Table 2: Percentage of Working Concurrent and SSI Beneficiaries’ Monthly

Earnings at Various Levels

Earnings

Percent of working

concurrent beneficiaries

Percent of working

SSI beneficiariesa

$1-65 26.2 19.5

$66-99 4.0 3.8

$100-199 13.1 10.4

$200-299 10.6 8.0

$300-399 9.2 6.3

$400-499 7.7 5.9

$500-599 7.6 5.1

$600-699 6.0 4.3

$700-799 3.9 3.7

$800-899 2.7 3.5

$900-999 1.9 2.9

$1000 or more 7.2 26.5

a

Includes individuals who receive SSI benefits, but not DI benefits.

Source: GAO analysis of SSA data.

Our analysis of data available on the use of work incentives indicated that,

while 11 percent of concurrent beneficiaries worked, they did not take

advantage of most of the work incentives available to them under the SSI

and/or DI programs. Most concurrent beneficiaries who worked used the

earned income exclusion under the SSI program that reduces cash

benefits by $1 for every $2 earned, but the other incentives were not

widely used. The next most frequently used work incentive was the

Impairment Related Work Expenses provision, which allows beneficiaries

to exclude the costs of certain impairment-related items and services

needed to work. It was used by fewer than 3 percent of concurrent

beneficiaries who worked. Concurrent beneficiaries’ use of work

incentives was comparable to that of SSI beneficiaries. Because

beneficiaries may not meet all the eligibility requirements for work

incentives, it may be difficult to determine whether the low rates of use of

work incentives were attributable to the inability to meet eligibility factors

or lack of understanding of the provisions.
Page 12 GAO-02-802 Coordination of DI and SSI Programs

There is little coordination between SSI and DI program rules, especially

for concurrent beneficiaries who work and, as a result, SSA must apply the

complex provisions of the two programs independently. The specialization

of most SSA field office staff in either the DI or SSI program makes it

difficult to serve concurrent beneficiaries effectively. Specialists in one

program lack integrated guidance to readily determine the effect of work

on the benefits in the other program. Moreover, because the guidance does

not adequately cross reference the DI and SSI rules that pertain to

concurrent beneficiaries, these specialists may not recognize the need to

communicate information about work to the other program as required by

SSA guidance. In addition, SSA has not established formal operating

procedures that ensure that this information is collected and

communicated nor has it established a monitoring system to ensure that

appropriate actions are taken. Because information on the work activities

of concurrent beneficiaries may not be exchanged between the two

programs or acted on in a timely manner, SSA may be overpaying benefits.

SSA took steps recently that have the potential for improving service to

concurrent beneficiaries and increasing the accuracy of their payments by

better coordinating the administrative process related to work activity. For

example, SSA officials have created a new position and new software to

handle work-related issues for all beneficiaries, which could provide

better integrated service to concurrent beneficiaries. Because these

initiatives are still being tested and evaluated, it is too early to know

whether they will have the intended effect if implemented nationwide.

SSA’s guidance for administering the DI and SSI programs may contribute

to the difficulty encountered by staff that specialize in one program but are

required to collect information about both programs for concurrent

beneficiaries. SSA’s written guidance for both programs is contained in a

voluminous document of about 35,000 pages divided into multiple parts.8

 A

DI specialist collecting work activity information from a concurrent

beneficiary may find it challenging to use the multi-part guidance for DI

benefits and even more challenging to use the guidance for SSI that would

also be needed for a concurrent beneficiary.

SSA guidance does not provide integrated instructions for processing

work information reported for concurrent beneficiaries or an integrated

explanation of the effect of work on both DI and SSI benefits. Available

 8

SSA guidance consists of multiple parts because of the need to adjust guidance over time,

incorporate temporary updates, additional guidance from regional offices, and information

about court decisions that affect how policies are applied in certain areas.

Little Coordination of

DI and SSI Programs

Exists for Concurrent

Beneficiaries Who

Work

Lack of Integrated

Guidance and Operational

Procedures Increases the

Difficulty Specialized Staff

Have in Effectively Serving

Concurrent Beneficiaries
Page 13 GAO-02-802 Coordination of DI and SSI Programs

guidance usually segregates information by program and provides little

cross-referencing to issues that may be common to both programs. In

addition, the cross-referencing that is provided does not always direct

specialists to the specific procedures to follow for the other program. For

example, the guidance for dealing with a DI beneficiary who returns to

work contains a single cross-reference to an 81 page section of SSI policy

and procedural statements. However, this 81 page section does not explain

the basic effect of work on benefits. To determine the specific procedures

and how work affects the person’s SSI benefits, the DI specialist would

need to go to yet another section of SSI guidance without the benefit of a

cross-reference to find it. The need for efficient and accessible guidance is

particularly important in field offices where heavy workloads and

changing priorities often compete for employee attention.

The lack of integrated guidance may contribute to SSA not collecting all

the required information on concurrent work beneficiaries. In some

offices, concurrent beneficiaries report their work activity to either a DI or

SSI specialist who collects the information he or she believes necessary to

determine the amount of benefits that should be paid under both

programs. Some specialists reported that they did not always know when

an individual was a concurrent beneficiary and did not always know what

information to collect about the other program. In other offices, a

concurrent beneficiary reported to a specialist in each program. If the

beneficiary is unable to meet with both specialists, SSA may not collect all

the information needed to adjust benefits correctly.

Even if the information is collected, some field offices lack standard

procedures for ensuring that information about the work activity is shared

between programs. Some field offices have established local procedures

for sharing this information, but these procedures may not always be

adequate. For example, in one field office we visited, the SSI specialists

who usually collected information about work activity from concurrent

beneficiaries would copy and share the information with one designated

supervisor who was responsible for taking the actions necessary to adjust

DI benefits. Even with this procedure in place, the supervisor told us she

was not confident that she was receiving all the information that was being

reported by concurrent beneficiaries.
Page 14 GAO-02-802 Coordination of DI and SSI Programs

SSA’s procedures for determining the appropriate DI benefit amount when

concurrent beneficiaries work make it difficult to adjust benefits in a

timely manner. When a concurrent beneficiary reports work, the field

office handling the case can adjust the SSI benefit, when warranted. In

contrast, in most cases, field office employees cannot take immediate

actions to adjust DI benefits because they cannot be adjusted until the

beneficiary has completed a 9 month trial work period.9 At the beginning

of the trial work period, SSA procedures direct the field office to transfer

DI cases to one of seven program service centers (PSC) for documenting

the start of this period. At the end of this period, the PSC is supposed to

return the case to the field office, which then determines whether the

beneficiary will continue to be entitled to benefits. However, SSA does not

routinely monitor or have a comprehensive system that tracks actions on

cases as they move between SSA components and automatically identifies

the cases may be nearing the completion of the trial work period. As a

result, the field offices may not be notified immediately upon the

completion of a trial work period and, therefore, may not know whether or

not to terminate DI benefits. Employees in several field offices told us that

they often do not receive the cases back from the PSCs in a timely manner.

Their estimates of the time it took the PSC to return these cases for further

action ranged from 1 to 10 years. SSA officials could not verify these

delays because they told us that they did not systematically collect

information about these time frames. These problems occur not only when

administering the trial work period for concurrent beneficiaries, but for all

DI beneficiaries who return to work.

Untimely actions may also occur because the tasks related to adjusting

benefits after the end of the trial work period are given a lower priority

than other workloads. Several SSA officials told us that many tasks

associated with adjusting benefits to account for work activity do not

receive workload credits that help maintain or increase field office staffing

levels. For this reason, field office managers generally give a higher

priority to tasks that do, such as processing initial claims for benefits.

However, an SSA headquarters official recently told us that SSA will focus

greater attention on the post trial work period workload as it implements

the Ticket to Work program.

Because SSA employees do not always evaluate and take action related to

the work activity in a timely manner, some DI beneficiaries continue to

receive benefits that they are no longer due. When DI beneficiaries earn

 9

See table 1 for an explanation of the trial work period.

SSA Does Not Monitor Its

Process for Accounting for

Work Activity, Often

Resulting in Untimely

Actions That May Cause

Overpayments
Page 15 GAO-02-802 Coordination of DI and SSI Programs

more than a specified amount10 in any month after completing the trial

work period, as of that month, SSA no longer considers the person

disabled and should end their DI benefits 2 months later. However, several

SSA officials told us about a one-time analysis of SSA disability

overpayments based on cessation of disability in calendar year 2000 that

revealed that about one-half of the overpayment dollars were made to

people who should not have received benefits because of their earnings.

Given this analysis, failure to take timely actions when DI beneficiaries

work may account for about $350 million dollars in overpayments for

calendar year 2001.11

SSA established a temporary new position in July 2000, the employment

support representative, which has the potential to address the challenges

it faces in serving concurrent beneficiaries. SSA developed the position, in

part, to concentrate on the needs of disability beneficiaries who work and

tested it with 32 SSA employees who had responsibility for 54 field offices.

These representatives received extensive training in the work incentive

provisions of both the DI and SSI programs. This training prepared them to

take the necessary actions for both programs without the need to rely on

unfamiliar program guidance. Moreover, funneling all work activity cases

through a single employee would allow this individual to develop a level of

expertise that was not possible in the traditional field structure. Further,

combining all duties related to disability beneficiaries who return to work

into a single position could eliminate the problem of specialists in one

program failing to share information with the other program. In addition,

since these representatives do not share responsibility for handling the

case with the PSC, they could take actions to adjust DI benefits in a

timelier manner.

It is unclear whether SSA will make this position permanent, and to what

degree. In a November 2001 report, an SSA workgroup recommended that

the position be implemented permanently in as many of its 1,300 service

locations as feasible. While the 32 employment support representatives

 10Earnings above a specified monthly amount indicate the capacity to perform substantial

gainful activity and would result in a finding that the beneficiary is no longer disabled. The

monthly limit for 2002 is $780 for all beneficiaries, except for those with statutory

blindness. For blind beneficiaries, the monthly limit is $1,300.

11In another situation, SSA has underpaid SSI beneficiaries who should have been

concurrent beneficiaries. Because of a problem in the SSI benefit payment system, SSA was

not alerted to all the cases in which SSI beneficiaries had worked a sufficient amount of

time to become eligible for DI benefits. SSA estimates that more than 500,000 SSI

beneficiaries may be underpaid an average of 8 years’ benefits.
Page 16 GAO-02-802 Coordination of DI and SSI Programs

continue to perform the duties of this position, the agency has not

announced decisions about the ultimate fate of this position. As of July

2002, SSA officials were still evaluating the resource implications of

implementing this position in most of its field offices. Without additional

resources, some field office managers told us they would have to divert

existing staff from their current positions to assume the employment

support representative role. SSA has not evaluated the timeliness of

actions taken by the employment support representatives to adjust

benefits. However, the employment support representatives with whom

we spoke thought that the additional costs associated with the new

position could be offset by the reduction in overpaid DI benefits from their

more timely actions.

In addition to testing the employment support representative position, SSA

is developing a new computer system that may potentially help to improve

the timeliness of actions in response to the work activity of DI

beneficiaries. Scheduled for release at the end of calendar year 2002, the

new program will allow SSA for the first time, to collect information about

the monthly earnings of all DI beneficiaries who are working. This

information should provide the basis for a systematic method for SSA to

determine whether additional action is needed to determine continuing

eligibility for of DI benefits. However, SSA is still deciding what additional

information the new system should include and what reports it should

produce to monitor all the actions needed to account for the work activity

of DI beneficiaries and to adjust benefits in a timely way.

Just as SSA has no special procedures for administering the rules for

concurrent beneficiaries, it does not provide concurrent beneficiaries with

any integrated explanation of the effects of work on both DI and SSI

benefits through its public information materials. The numerous

publications that SSA has issued explain how work affects one benefit or

the other. SSA extends this practice of not integrating their explanations

of the effects on benefits by sending beneficiaries two separate letters, one

to explain changes in DI benefits and another to explain SSI benefits. In

addition, SSA field office specialist employees that lack expertise about

both programs may provide incomplete or incorrect information about

these effects.

While it may be difficult to communicate, it is important for concurrent

beneficiaries to understand that work activity affects their benefits at

different levels of earnings and at different times, depending on the

program. For example, concurrent beneficiaries with relatively low

earnings may be able to maintain both benefits while increasing their total

The Application of

Both DI and SSI Rules

Makes It Difficult for

Concurrent

Beneficiaries to Make

Informed Decisions

about Work Activity
Page 17 GAO-02-802 Coordination of DI and SSI Programs

income. However, as earnings increase, so does the probability that they

will eventually lose one or both benefits. Figure 2 illustrates these effects

of work activity at three earnings levels on the DI and SSI benefits. At low

earnings, a beneficiary receiving the average DI benefit who starts working

in February 2002 retains DI and SSI benefits throughout the 13 month

period shown. In contrast, a beneficiary with high earnings—higher than

substantial gainful activity—will lose both benefits during the same

period.
Page 18 GAO-02-802 Coordination of DI and SSI Programs

Figure 2: Effect of Earnings on the DI and SSI Benefits of a Concurrent Beneficiary

Moderate earnings - $600 per month

Low earnings - $300 per month

Total income

0

200

400

600

800

1000

1200

1400

Jan-02 Feb-02 Mar-02 Apr-02 May-02 June-02 July-02 Aug-02 Sept-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03

Months

Total income

0

200

400

600

800

1000

1200

1400

Jan-02 Feb-02 Mar-02 Apr-02 May-02 June-02 July-02 Aug-02 Sept-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03

Months
Page 19 GAO-02-802 Coordination of DI and SSI Programs

Note: Computations are based on the following assumptions: an individual (1) has the average

monthly DI benefit of $430 for concurrent beneficiaries, (2) has an SSI benefit of $135 and no income

other than earnings, (3) began work in February 2002, (4) lives in a state that does not supplement

the federal SSI benefit and (5) has Medicare and does not need Medicaid to continue working. For

the sake of simplicity, no cost-of-living adjustments have been estimated for 2003.

Source: GAO Analysis of SSA law, regulations and policy guidance.

Because the work incentive provisions of the two programs are designed

to encourage beneficiaries to test their ability to work without losing their

benefits, concurrent beneficiaries who understand the rules of both

programs can make decisions that best support their priorities for income,

services, and self-sufficiency. Concurrent beneficiaries who wished to

become self-sufficient would need to understand that, to maintain an

equivalent of their level of benefits and services, they would need to earn

enough to make up for the eventual loss of cash benefits and health

High earnings - $900 per month

Earnings

DI

SSI

Total income

0

200

400

600

800

1000

1200

1400

Jan-02 Feb-02 Mar-02 Apr-02 May-02 June-02 July-02 Aug-02 Sept-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03

Months
Page 20 GAO-02-802 Coordination of DI and SSI Programs

insurance and benefits and services from other sources. Concurrent

beneficiaries who are uncertain about their ability to sustain work can

focus on working at a level that preserves enough benefits to support them

while they test their ability to work. In determining what level of work

they can pursue, these beneficiaries would have to weigh the value of non

cash benefits that depend on income and assets such as housing or social

services compared with the earnings from increased work activity. For

example, a service provider told us about one concurrent beneficiary who

was receiving in-home support services from his county that allowed him

to live independently. However, he returned to work and was then earning

too much to continue to qualify for these services. He determined that he

could continue to qualify for the support services by working 1 hour less

per week and he negotiated the change with his employer.

Concurrent beneficiaries who do not understand the programs’ provisions

may make decisions about work that will make them worse off financially.

Some concurrent beneficiaries do not work at all because they are afraid

of losing their benefits. For example, two social service providers with

whom we spoke indicated that some of their clients with mental

retardation and the family members who helped them make decisions

would avoid any work activity. Even though some earnings would not

significantly affect benefits, they feared the loss of any benefit and health

insurance and decided to forego the additional income they could have

earned. At the other extreme, beneficiaries may inadvertently lose the

benefits and health insurance they need by earning more than the

allowable limits under one or both of the programs.

Concurrent beneficiaries who do not understand the full range of work

incentives may not pursue provisions that might ease their transitions to

work. For example, one young concurrent beneficiary who was working

part-time and attending college told us that SSA employees had never

explained two SSI work incentive provisions that would have allowed her

to exclude more of her earned income from the total used to determine

her benefit. This would have allowed her to have more money for her

tuition. Another concurrent beneficiary said that, even though she had

expressed a strong desire to work and had returned to work for a short

time, SSA had never explained that she could deduct from her countable

earnings the cost of any items or services related to her impairments that

were necessary for her to continue working.

To assist beneficiaries in making better decisions about work activity, as

authorized by the Ticket to Work and Work Incentives Improvement Act of

1999, SSA has provided funding since 2000 to community-based
Page 21 GAO-02-802 Coordination of DI and SSI Programs

organizations. These organizations are funded to provide work incentives

planning and assistance to beneficiaries and conduct outreach to

individuals who are potentially eligible to participate in work incentive

programs. In fiscal year 2002, SSA awarded a total of about $20 million to

more than 100 organizations for these activities. The 2001 annual report of

this program indicates that, through the end of that calendar year, more

than 100 organizations receiving funding provided intensive benefit

support services to more than 4,500 beneficiaries, most of whom were

working or considering a return to work. In addition, more than 5,000

beneficiaries received less intensive services, such as information and

referral.

Some disability advocates have recommended making the work incentive

rules similar in both the DI and SSI programs to help beneficiaries better

understand the effect of work on benefits. They frequently suggest

eliminating the 9 month trial work period for DI and replacing it with a

gradual reduction in benefits in response to increased earnings, similar to

the SSI program. Such a change would require legislative action. The

Ticket to Work and Work Incentives Improvement Act requires SSA to

conduct a demonstration project to test whether a reduction of $1 in DI

benefits for every $2 earned would remove disincentives to return to work.

SSA is still in the planning stages for this demonstration, and it is unclear

when data will be available.

The DI and SSI programs were designed as two separate programs to serve

two distinct categories of disability beneficiaries. However, a third

category, concurrent beneficiaries—those who qualify for both DI and SSI

benefits–has emerged as a sizable disability population. Failure to properly

administer the program for this special population could result in benefit

overpayments and underpayments and less-than-ideal beneficiary

decisions about work.

Without taking additional steps, it will be more difficult for SSA to

effectively administer the disability program and serve concurrent

beneficiaries under the current program. Without improved guidance and

procedures, staff that have knowledge only about SSI or DI program rules

may not collect and share information needed to make accurate

determinations about concurrent beneficiaries’ benefit payments. In

addition, without a monitoring system to ensure information about

concurrent beneficiaries’ work activity is shared across program

components and acted upon within a timely manner, SSA faces an

increased risk that concurrent beneficiaries, as well as all DI beneficiaries

Conclusions
Page 22 GAO-02-802 Coordination of DI and SSI Programs

who return to work, will be overpaid. Moreover, without public

information materials that clearly explain the complex interaction of the

two programs, the possibility that beneficiaries would make decisions

about working that are not in their best interest could increase. Further, a

lack of understanding of the work incentive provisions could create a

disincentive to work.

SSA needs to undertake the necessary steps to ensure it adequately serves

concurrent beneficiaries and exercises its stewardship over program funds

by avoiding overpayments. We recommend that the Commissioner of SSA:

• Develop procedures and integrated guidance to ensure information about

work activity is collected and shared between the DI and SSI programs.

One option would be to improve the cross-references used in its program

guidance to more specifically target needed information to take actions to

adjust benefits for both programs. Another option would be to require that

some staff are knowledgeable about both programs and that they collect

and act on work activity information for both programs. Regardless of the

option selected, SSA should also consider adding to its guidance

explanations and examples of the effect of work activity for individuals

receiving both DI and SSI benefits.

• Develop comprehensive systems to monitor the progress of DI cases as

they move between SSA components and set timeliness goals for the

entire process for each action and component. In addition, use this

information to help ensure timely actions and minimize overpayments of

DI benefits when individuals return to work.

• Develop public information materials targeted to concurrent beneficiaries

that explain the complex interaction of the two programs in language that

beneficiaries can understand. SSA may wish to consider revising its

publication, Working While Disabled—How We Can Help, to include a

basic explanation of the effects of work when an individual receives both

DI and SSI benefits and examples that illustrate these effects. For more

detailed explanations, SSA could direct beneficiaries to contact an SSA

representative knowledgeable of both programs.

In its comments on a draft of this report, SSA agreed with our conclusions

and highlighted the initiatives it has underway or planned that it believes

will address our recommendations (see app. II). Concerning our first

recommendation, SSA stated that it is developing training for fall 2002 to

enhance field office employees’ technical proficiency in both the DI and

Recommendations for

Executive Action

Agency Comments

and Our Evaluation
Page 23 GAO-02-802 Coordination of DI and SSI Programs

SSI programs. It is also developing and refining its supportive software

systems to print referral forms for use in routing program information. We

believe additional training should help to improve the technical

proficiency of field office employees in both programs. However, SSA

may need to consider the time field employees will need to develop

proficiency after completing the training. Reliable, user-friendly program

guidance could help reinforce this training as well as be a reference to

these and future employees. Therefore, we continue to believe that

program guidance should be modified to more completely explain the

interactions of the two programs when concurrent beneficiaries work.

Further, while the enhancements to software should provide SSA with an

additional tool for sharing information between programs, SSA may wish

to consider developing procedures to ensure that such available tools are

being used appropriately to share information.

Concerning our second recommendation, SSA said that the systems it now

has under development and scheduled for release in November 2002 will

provide the necessary management information capabilities needed to

ensure actions related to beneficiaries working are taken on a timely basis.

As acknowledged in our report, the new system under development has

the potential for improving the timeliness of actions in concurrent cases.

However, because the system is still under development, we are unable to

determine how effective it will be in identifying and controlling work

activity. For example, we cannot confirm at this time whether the

databases being developed will contain information about all working

beneficiaries nationwide that can be accessed by all field offices or local

databases that can only be accessed by the employees in one office,

similar to those being tested in a number of field offices.

Concerning our third recommendation, SSA stated that it would develop a

fact sheet for concurrent beneficiaries that explains the interaction of the

two programs in language they can understand. The agency will also

modify another publication to make it clear that beneficiaries should

contact the agency for an explanation because the interaction of work

activity with the two programs is so complex that it requires individualized

explanations. We believe a fact sheet that explains the interactions of the

DI and SSI programs should be useful for concurrent beneficiaries. In

addition, we agree that the interaction of work with DI and SSI benefits is

complex and that individualized explanations may provide concurrent

beneficiaries with the most complete information. In relying on

individualized explanations provided by SSA employees, SSA may wish to

consider developing methods to ensure that concurrent beneficiaries have

access to employees who are knowledgeable in both programs regardless
Page 24 GAO-02-802 Coordination of DI and SSI Programs

of the method of contact. For example, given that many beneficiaries may

contact SSA through its 800 number teleservice centers, SSA could either

deploy knowledgeable staff in the teleservice centers or establish

procedures to ensure that these calls are referred to staff who are

knowledgeable in both programs.

SSA also provided technical comments, which we have incorporated as

appropriate.

We are sending copies of this report to the Commissioner of Social

Security, appropriate congressional committees, and other interested

parties. We will also make copies available to others on request. In

addition, the report will be available at no charge on the GAO Web site at

http://www.gao.gov.

If you or your staff have any questions about this report, please contact me

on (202) 512-7215 or Shelia Drake at (202) 512-7172. Key contributors to

this report were Beverly Crawford, Amy Bevan, Patrick DiBattista, and

Vanessa Taylor.

Robert E. Robertson, Director

Education, Workforce, and

 Income Security Issues
Appendix I: Scope and Methodology

Page 25 GAO-02-802 Coordination of DI and SSI Programs

To determine the number and characteristics of concurrent beneficiaries,

we used data from the Social Security Administration’s (SSA) monthly 10

Percent Characteristic Extract Record file of the Supplemental Security

Record, which contains data from a 10 percent simple random sample of

the records of all Supplemental Security Income (SSI) applicants and

beneficiaries. We used data from the September 2001 extract to test our

analysis and used the February 2002 extract for the final analysis.

We first determined the number of working age beneficiaries (both

concurrent and SSI only). To do this, we deleted from the sample universe

all records that

• were not active (those that did not have a Record Identification

Code of G);

• showed a date of death in a month prior to the month of the file;

• showed a master file type other than disabled or blind;

• showed that the beneficiary was under age 18 or over age 64 as of the

month of the file;

• showed that the claim was denied and no payments had been made on that

record;

• showed entitlement for a veteran under title VIII of the Social Security Act;

and

• showed that the beneficiary was not receiving SSI because of excess

income, except for those beneficiaries who continued to be eligible for

Medicaid under section 1619b of the Social Security Act and who would be

eligible for SSI payments if it were not for their earnings.

We then determined which beneficiaries received Disability Insurance (DI)

income as well as SSI income—concurrent beneficiaries. To do this, for

the records that remained, we identified concurrent beneficiaries as

individuals who were currently receiving type A unearned income. Type A

unearned income is any Social Security benefit. The remaining records

were identified as beneficiaries who received SSI but not DI. We did not

eliminate the remaining records for which benefits were suspended, but

were not terminated as of February 2002, because, in many cases, these

suspensions are temporary and the beneficiary will return to payment

status within a relatively short period of time. In addition, our

methodology did not allow us to discern whether concurrent beneficiaries

ages 62 through 64 were receiving Social Security benefits on the basis of

disability or retirement. As a result, we may be slightly overstating the size

of the concurrent beneficiary population.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 26 GAO-02-802 Coordination of DI and SSI Programs

All estimates have sampling errors of +/- 5 percent or less of the value of

the point estimates offered. We employed standard and widely accepted

social science and statistical methods. We did not independently verify the

accuracy or completeness of the data provided to us by the SSA.

To assess the extent to which SSA coordinates the DI and SSI program

rules when individuals are working and receiving benefits from both

programs, we reviewed the relevant sections of the Social Security Act,

regulations, and SSA policy and procedural guidance to its employees. We

also interviewed SSA officials at the headquarters in Baltimore, Maryland,

and at several field offices. We visited two SSA field offices each in

metropolitan Los Angeles, California; and Chicago, Illinois, and one each

in Alexandria, Virginia; Wilmington, Delaware; and Towson, Maryland. We

judgmentally selected the locations on the basis of geographic diversity,

the presence or absence of an employment support representative pilot,

and the use of generalist or specialist claims representatives.

To determine the potential effect of applying both DI and SSI program

rules on concurrent beneficiaries’ decisions to work and on their benefits,

we relied on our review of SSA law, regulations, and policy and procedural

guidance as well as our interviews with SSA officials at headquarters and

in field offices. We also reviewed the public information materials that

SSA developed and used to communicate information about its programs

to beneficiaries and other interested parties. In addition, we interviewed

academic researchers, advocates for people with disabilities, social service

providers for individuals with disabilities, and a small number of

concurrent beneficiaries.
Appendix II: Comments from the Social

Security Administration

Page 27 GAO-02-802 Coordination of DI and SSI Programs

Appendix II: Comments from the Social

Security Administration
Appendix II: Comments from the Social

Security Administration

Page 28 GAO-02-802 Coordination of DI and SSI Programs
Appendix II: Comments from the Social

Security Administration

Page 29 GAO-02-802 Coordination of DI and SSI Programs (130076)
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