I
105TH CONGRESS
1ST SESSION
H. R. 534
To provide as a demonstration project a Transition to Work Program for
individuals entitled to disability benefits under title II of the Social
Security Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 4, 1997
Mrs. KENNELLY of Connecticut introduced the following bill; which was re-
ferred to the Committee on Ways and Means, and in addition to the
Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To provide as a demonstration project a Transition to Work
Program for individuals entitled to disability benefits
under title II of the Social Security Act, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Transition to Work
Act of 1997’’.
SEC. 2. TRANSITION TO WORK PROGRAM.
(a) IN GENERAL.—The Commissioner of Social Secu-
rity shall establish as a demonstration project, in accord-
ance with this section, a Transition to Work Program
(hereinafter in this section referred to as the ‘‘TWP’’) in
such localities as the Commissioner considers appropriate
to meet the purpose of the TWP. The purpose of the TWP
shall be to determine the best practicable means of provid-
ing individuals entitled to disability benefits prompt access
to vocational rehabilitation services in order to move them
from disability benefits to work.
(b) TWOS PROVIDED TO BENEFICIARIES.—
(1) IN GENERAL.—The Commissioner shall in-
clude with each notification to an individual covered
under the TWP of—
(A) the individual’s entitlement to disabil-
ity benefits, or
(B) the commencement of a review of the
individual’s case for purposes of continuing eli-
gibility,
a ticket for work opportunity (hereinafter in this
section referred to as a ‘TWO’), together with an ex-
planation of the purpose of, and the method of
using, the TWO under this subsection.
(2) TWO DEFINED.—For purposes of this sec-
tion, the terms ‘‘ticket for work opportunity’’ and
‘‘TWO’’ mean a document issued by the Commis-
sioner which provides that, upon presentation by the
individual named therein to a provider of vocational
rehabilitation services participating in the TWP,
compensation will be provided to the provider, under
the terms of the TWP, for the services rendered to
the individual.
(3) COMMENCEMENT OF TWP AND INDIVIDUALS
COVERED.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the TWP shall apply with
respect to beneficiaries, under any entitlement
to benefits—
(i) whose first month of such entitle-
ment commences after the date of the en-
actment of this Act or who receive after
such date a notice of a review for purposes
of continuing eligibility, and
(ii) who reside, on the date of the es-
tablishment of the TWP, in the localities
affected by the TWP.
The Commissioner shall establish the TWP not
later than January 1, 1998.
(B) CURRENT
BENEFICIARIES.—Individ-
uals who are entitled to disability benefits for
the month in which this Act is enacted and who
reside in a locality affected by the TWP may
apply to the Commissioner, in such form and
manner as shall be prescribed by the Commis-
sioner, for inclusion in the TWP. Any such in-
dividual making such an application shall be
treated as an individual covered by the TWP,
and the Commissioner shall issue a TWO to
such individual as soon as practicable after re-
ceipt of the application.
(d) REDEMPTION OF TWOS.—
(1) IN GENERAL.—After receipt, by a partici-
pating provider, of a TWO from the individual to
whom the TWO was issued, the provider may re-
deem the TWO, upon presentation to the Commis-
sioner, as provided in this subsection.
(2) TIMING
AND
AMOUNT
OF
PAYMENTS
TO
PROVIDERS.—
(A) IN GENERAL.—The TWP shall provide
for payments from the Federal Disability Insur-
ance Trust Fund to the provider, as compensa-
tion for the provision of services to an individ-
ual, upon presentation of the TWO to the Com-
missioner, as follows:
(i) upon initial placement of the indi-
vidual in employment while the individual
is in the course of receiving the services
from the provider, a milestone payment to
the provider in a fixed dollar amount which
shall be established by the Commissioner
from time to time in accordance with the
terms of the TWP; and
(ii) after commencement by the indi-
vidual of a period of work, payment upon
completion of each calendar quarter begin-
ning or ending during such period of work,
of an amount equal to 50 percent of the
total amount of the benefit payments
which were not payable for any month in
such quarter but would have been payable
but for the cessation of benefit payments
by reason of the individual’s engagement
in, or ability to engage in, substantial gain-
ful activity.
(B) PERIOD
OF
WORK
DEFINED.—For
purposes of this paragraph, the term ‘‘period of
work’’ means, in connection with any entitle-
ment to disability benefits, a period beginning
with the month following the first month for
which such benefits are not payable by reason
of engagement in, or a determination of ability
to engage in, substantial gainful activity, and
ending with the end of the 60th month follow-
ing such first month for which such benefits are
not payable.
(C) 
ADJUSTMENTS
BY
THE
COMMIS-
SIONER.—The Commissioner may alter the per-
centage specified in subparagraph (A)(ii), the
length of the period specified in subparagraph
(B), or both, to the extent that the Commis-
sioner determines that such an alteration would
not otherwise provide an adequage incentive for
work.
(D) CERTIFICATION OF PAYMENTS.—Pay-
ments under subparagraph (A) shall be made
by means of certification by the Commissioner
to the Managing Trustee of the Federal Dis-
ability Insurance Trust Fund of the amount of
the payments. The Managing Trustee shall
make the payments from the Trust Fund in ac-
cordance with the certification.
(3) CHANGING OF PROVIDERS.—The Commis-
sioner shall make provision, upon the request of an
individual who has been issued a TWO, for changing
the provider receiving compensation under the TWP
in connection with the TWO.
(e) PROVIDER REQUIREMENTS.—
(1) CERTIFICATION
OF
PROVIDERS.—A pro-
vider of vocational rehabilitation services may par-
ticipate in the TWP only if the provider is certified
under the TWP. Under the TWP, any such provider
shall be certified, irrespective of whether the pro-
vider is public or private, if the provider—
(A) meets criteria established under the
TWP to ensure to the satisfaction of the Com-
missioner reasonable access to providers who
meet applicable requirements for professional
certification,
(B) includes in the services provided a
broad range of vocational rehabilitation serv-
ices, including job training and liaison and
placement with employers, and
(C) otherwise maintains, in the provider’s
practice and procedures, compliance with the
requirements of this section and the terms of
the TWP.
(2) EXPIRATION, CANCELLATION, RENEWAL.—
The TWP shall provide for reasonable terms for ex-
piration, cancellation, and renewal of certifications
under the TWP.
(3) LISTS OF PROVIDERS.—The Commissioner
shall establish and maintain for each locality af-
fected by the TWP lists of providers of vocational
rehabilitation services who are certified under the
TWP and shall make the lists generally available to
the public.
(f) TRANSITION TO WORK PLANS.—Providers of vo-
cational rehabilitation services under the TWP shall be re-
quired under the terms of the TWP to establish and main-
tain an individual transition to work plan for each individ-
ual receiving the services. Each such plan shall be devel-
oped jointly by the individual and the provider, taking into
account an employment evaluation which shall be con-
ducted in accordance with requirements of the TWP. An
individual transition to work plan shall take effect only
upon approval by the individual.
(g) APPEALS.—Any provider dissatisfied with any de-
termination of the Commissioner under this section shall
be entitled to a hearing thereon by the Commissioner to
the same extent as is provided in section 205(b) of the
Social Security Act with respect to decisions of the Com-
missioner, and to judicial reivew of the Commissioner’s
final decision after such hearing as is provided in section
205(g) of such Act.
(h) DISABILITY BENEFIT DEFINED.—For purposes
of this section, the term ‘‘disability benefit’’ means a bene-
fit under section 223 of the Social Security Act or a bene-
fit under section 202 of such Act based on the disability
of the beneficiary.
SEC. 3. DISABLED WORKER TAX CREDIT.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. DISABLED WORKER CREDIT.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible disabled individual, there shall be allowed as a credit
against the tax imposed by this subtitle for the taxable
year an amount equal to the credit percentage of so much
of such individual’s earned income for the taxable year as
does not exceed the earned income amount.
‘‘(b) PHASEOUT OF CREDIT.—The amount of the
credit allowable to a taxpayer under subsection (a) for any
taxable year shall not exceed the excess (if any) of—
‘‘(1) the credit percentage of the earned income
amount, over
‘‘(2) the phaseout percentage of so much of the
earned income of the taxpayer for the taxable year
as exceeds the phaseout amount.
‘‘(c) PERCENTAGES AND AMOUNTS.—For purposes
of this section—
‘‘(1) PERCENTAGES.—The credit percentage
and the phaseout percentage shall be determined as
follows:
‘‘In the case of an eligible disabled individual with:
The credit
percentage is:
The phaseout
percentage is:
No qualifying children ....................................
17.14
1 qualifying child ............................................
7.14
3.74
2 or more qualifying children .........................
7.58
4.5.
‘‘(2) AMOUNTS.—The earned income amount
and the phaseout amount shall be determined as
follows:
‘‘In the case of an eligible disabled individual with:
The earned
income
amount is:
The phaseout
amount is:
No qualifying children ....................................
$8,000
$11,000
1 qualifying child ............................................
$7,000
$12,430
2 or more qualifying children .........................
$9,890
$12,680.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) ELIGIBLE
DISABLED
INDIVIDUAL.—The
term ‘eligible disabled individual’ means any individ-
ual if—
‘‘(A) for any month during the taxable
year or any prior month after December 1996,
amounts in subsection (c)(2) shall be increased by
an amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3), for the calendar
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 1997’ for
‘calendar year 1992’ in subparagraph (B)
thereof.
‘‘(2) ROUNDING.—If any dollar amount, after
being increased under paragraph (1), is not a mul-
tiple of $10, such dollar amount shall be rounded to
the nearest multiple of $10.’’
(b) ADVANCE PAYMENT OF CREDIT.—Chapter 25 of
such Code (relating to general provisions relating to em-
ployment taxes) is amended by inserting after section
3507 the following new section:
‘‘SEC. 3507A. ADVANCE PAYMENT OF DISABLED WORKER
CREDIT.
‘‘(a) GENERAL RULE.—Except as otherwise provided
in this section, every employer making payment of wages
to an employee with respect to whom a disabled worker
credit eligibility certificate is in effect shall, at the time
of paying such wages, make an additional payment equal
to the disabled worker credit advance amount of such em-
ployee.
‘‘(b) DISABLED WORKER CREDIT ELIGIBILITY CER-
TIFICATE.—For purposes of this title, a disabled worker
credit eligibility certificate is a statement furnished by an
employee to the employer which—
‘‘(1) certifies that the employee will be eligible
to receive the credit provided by section 35 for the
taxable year,
‘‘(2) certifies that the employee does not have
a disabled worker credit eligibility certificate in ef-
fect for the calendar year with respect to the pay-
ment of wages by another employer, and
‘‘(3) states whether or not the employee’s
spouse has such a certificate in effect.
For purposes of this section, a certificate shall be treated
as being in effect with respect to a spouse if such a certifi-
cate will be in effect on the first status determination date
following the date on which the employee furnishes the
statement in question.
‘‘(c) 
DISABLED
WORKER
CREDIT
ADVANCE
AMOUNT.—
‘‘(1) IN GENERAL.—For purposes of this title,
the term ‘disabled worker credit advance amount’
means, with respect to any payroll period, the
amount determined—
‘‘(A) on the basis of the employee’s wages
from the employer for such period, and
‘‘(B) in accordance with tables prescribed
by the Secretary.
‘‘(2) ADVANCE AMOUNT TABLES.—The tables
referred to in paragraph (1)(B)—
‘‘(A) shall be similar in form to the tables
prescribed under section 3402 and, to the maxi-
mum extent feasible, shall be coordinated with
such tables and the tables prescribed under sec-
tion 3507(c), and
‘‘(B) shall be structured to carry out the
principles of subparagraphs (B) and (C) of sec-
tion 3507(c)(2).
‘‘(d) DISABLED WORKER CREDIT.—For purposes of
this section, the term ‘disabled worker credit’ means the
credit allowable by section 35.
‘‘(e) OTHER RULES.—For purposes of this section,
rules similar to the rules of subsections (d) and (e) of sec-
tion 3507 shall apply.
‘‘(f) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary to carry out the pur-
poses of this section.’’.
(c) TECHNICAL AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘or from section 35 of such Code’’.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 of such Code is
amended by striking the last item and inserting the
following new items:
‘‘Sec. 35. Disabled worker credit.’’
‘‘Sec. 36. Overpayments of tax.’’
(3) The table of sections for chapter 25 of such
Code is amended by inserting after the item relating
to section 3507 the following new item:
‘‘Sec. 3507A. Advance payment of disabled worker credit.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to taxable years beginning after Decem-
ber 31, 1997.
(2) ADVANCE
PAYMENTS.—The amendment
made by subsection (b) shall apply to remuneration
paid after December 31, 1997.
SEC. 4. IMPROVED MEDICARE COVERAGE.
(a) PROVIDING FOR 5-YEAR PERIOD OF CONTINU-
ATION COVERAGE FOR THOSE RETURNING TO WORK.—
(1) IN GENERAL.—The next to last sentence of
section 226(b) of the Social Security Act (42 U.S.C.
426) is amended—
(A) by striking ‘‘throughout all of which’’
and inserting ‘‘throughout the first 24 months
of which’’, and
(B) by striking ‘‘24 such months’’ and in-
serting ‘‘48 months’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to months beginning
with January 1998 and shall not apply to individ-
uals with respect to any period of entitlement to
benefits under section 226(b) of the Social Security
Act that terminated before December 31, 1997.
(b) ESTABLISHING CEILING ON PREMIUMS FOR DIS-
ABLED BUY-IN INDIVIDUALS.—
(1) IN GENERAL.—Section 1818A(d)(2) of the
Social Security Act (42 U.S.C. 1395i-2a(d)(2)) is
amended by striking the period at the end and in-
serting the following: ‘‘; except that—
‘‘(A) the amount of an individual’s monthly pre-
mium for any month in a calendar year under this
section shall not exceed 1⁄12 of 10 percent of the
amount (if any) by which—
‘‘(i) such individual’s earned income (as
defined in section 32(c) of the Internal Revenue
Code of 1986) for taxable year ending in the
preceding calendar year, exceeded
‘‘(ii) $15,000; and
‘‘(B) section 1818(d)(4) shall be applied with-
out regard to subparagraph (A) of this paragraph.
The Secretary shall provide for such adjustments to pre-
miums charged as may be necessary to carry out subpara-
graph (A).’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply with respect to pre-
miums for months beginning with January 1998.
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