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National Center on Secondary Education and Transition

This document has been archived because some of the information it contains may be out of date. (6/09)

ESSENTIAL TOOLS —
Handbook for Implementing a Comprehensive Work-Based Learning Program According to the Fair Labor Standards Act
(Third Edition)


Appendix C

SSI Work Incentives Available to Transition-Age Youth with Disabilities

 

Earned Income Exclusion (EIE)

The Earned Income Exclusion applies to all SSI program recipients, including any student earning wages from a school-sponsored employment program or other employment. Under this exclusion, some earnings each month are not counted toward the specified SSI income limit ($700). For many youth with disabilities, the Earned Income Exclusion alone will ensure that most or all SSI benefits are maintained while the student participates in school-sponsored paid employment or other paid work situations.

There are three parts to this exclusion. The first is a general exclusion of $20 of monthly income from any source. The second part is an additional $65 earned monthly income exclusion. The third part is the exclusion of one-half of all earnings above the combined $20 + $65 ($85) monthly exclusion as well. That is, for every two dollars earned, one dollar is deducted from SSI’s payment.

If, for example, an individual is receiving the maximum SSI benefit rate of $500 per month, the individual’s monthly earnings from paid employment would have to exceed $1,473 before the SSI benefit would cease and the individual would exit the SSI program if no other work incentives apply. This maximum income level would increase if the individual accessed any of the other SSI program work incentives. In addition to the Earned Income Exclusion, transition students receiving SSI benefits may be eligible for and profit from the following work incentives.

Earned Income Exclusion Calculation

$420.00

Gross income (earned through competitive or supported employment)

- 20.00

General income exclusion (unearned income, such as bank interest, is deducted from the $20 exclusion)

400.00

 

- 65.00

Earned income exclusion

$335.00

 

 

335.00

Divide this amount by 2

÷ 2

1/2 of income is deducted after exclusions

$167.50

SSI countable income

 

$500.00

SSI Federal monthly benefit rate, 1999

- 167.50

SSI countable income

332.50

Adjusted SSI payment

+ 420.00

Earned gross income

$752.50

Total gross earnings

Student Earned Income Exclusion (SEIE)

Student Earned Income Exclusion (SEIE) allows a person with a disability under age 22 and regularly attending school to exclude up to $400 of earned income per month before applying the Earned Income Exclusion. The two exclusions may be used in combination. The maximum annual exclusion is $1,620.

For example, a full-time college student with a disability receiving SSI benefits of $500 monthly has the opportunity to earn $500 per month while in school. These earnings may be excluded under SEIE up to the $1,620 yearly maximum. In addition, the student may exclude another $85 ($20 general exclusion; $65 earned income exclusion) of monthly earnings, leaving him or her with a countable income of $15. Please note that SEIE must be applied before the general and earned income exclusions. SEIE can be used either with or without the earned income exclusion. In this example, the student’s gross income using SEIE is $485 (SSI) and $500 in earnings, for a total of $985.

Students must apply for SEIE at their local SSA office. The student must periodically submit a statement of school attendance, a statement of employment, and wage receipts. Local SSA office procedures differ slightly as to how often these statements are required. Students should contact their local SSA office for complete details.

SEIE Calculation

$500.00

Gross income

- 400.00

SEIE

100.00

SSI countable income

- 20.00

General income exclusion

- 65.00

Earned income exclusion

$15.00

SSI countable income

 

$500.00

SSI Federal monthly benefit rate, 1999

- 15.00

SSI countable income

485.00

Adjusted SSI payment

+ 500.00

Earned gross income

$985.00

Total gross earnings

Impairment-Related Work Expense (IRWE)

The cost of certain impairment-related items and services that a person with a disability needs in order to work can be deducted from gross earnings through an IRWE incentive. A student requesting an IRWE must verify that the items or expenses incurred are related to his or her disability and are necessary for job performance. The student will be asked to submit proof of payment. Impairment-related work expenses are deductible for SSI payment purposes when:

  • The expense enables a person to work.
  • The person, because of a severe physical or mental impairment, needs the item or service for which the expense is incurred in order to work.
  • The cost is paid by the person with a disability and is not reimbursed by another source.
  • The expense is “reasonable” as it represents the standard charge for the item or service in the person’s community.
  • The expense is paid in a month in which earned income is received or work is performed while the person used the impairment-related item or service.

Individuals with disabilities may rely on IRWE incentives throughout their entire lives. Work-related expenses that are incurred by a student while in secondary school are likely to continue when they exit school. A student applying for an IRWE incentive under the SSI program should contact the local SSA office for specific details and documentation requirements.

IRWE Calculation

$420.00

Gross earnings

- 85.00

General and earned income exclusions

$355.00

Earned income

- 360.00

IRWE exclusion

0.00

Countable income

 

$500.00

SSI benefits

+ 420.00

Gross earnings

$920.00

Gross income

- 360.00

IRWE Expense

$560.00

Usable gross income

Plan for Achieving Self-Support (PASS)

The Plan for Achieving Self-Support (PASS) is a work incentive that allows an individual to set aside income and/or resources for a specified period of time to achieve a work goal. For example, an individual may set aside money for postsecondary education, the purchase of job-coaching support, personal transportation, job-related equipment, or to start a business. The income and/or resources set aside in a PASS do not count in determining SSI benefits. Nor may SSI cash benefits be used to support a PASS. When appropriate, a PASS may be used in conjunction with other SSI work incentives. If a student under age 18 cannot satisfy the SSI income eligibility requirement only because his or her parents’ or guardians’ income is too high, the student may apply for a PASS incentive through which their parents or guardians can set aside enough income to make the student eligible for SSI benefits.

The PASS is similar to the IEP/transition plan: It establishes job-related goals and objectives. Because of these similarities, it is possible to incorporate a PASS into the IEP/transition plan. A transition student may benefit from a PASS while in school or upon exiting. The basic requirements for a PASS include:

  • A feasible and reasonable occupational goal.
  • A defined timetable.
  • The need for income or resources, other than SSI benefits, to be set aside.
  • An explanation of expenditures to be covered by the set-aside funds.

The PASS should be considered during the IEP/transition development process even if it is not to be used while the individual is still a student. A PASS may be used by any individual participating in SSI at any age. Some students can benefit from a PASS while they are in school and also after they leave school to further their vocational goal by purchasing additional training or transportation, for example. As part of the transition planning process, the planning team may incorporate the future use of a PASS into the student’s IEP/transition plan.

The most likely candidates for a PASS incentive are students who currently are receiving SSI benefits, want to work and have work goals in their IEP, are in school or a training program or plan to complete postsecondary training, or plan to start their own business.

A PASS incentive can be used to support a number of expenses related to employment goals, including:

  • Tuition, fees, books, and supplies for school or training programs.
  • Supported employment services, including a job coach.
  • Attendant care.
  • Equipment and tools needed to work.
  • Transportation.

Income and resources that are set aside in a PASS are excluded under the SSI income and resources tests. Any transition student who receives SSI benefits or could qualify for them can have a PASS. For example, a student whose income exceeds SSI requirements may develop a PASS to maintain his or her SSI eligibility while pursuing work goals.

To receive a PASS, an individual must complete a PASS application and submit it to the SSA office. Each PASS is reviewed for approval locally. This process can take up to three months to complete. Anyone may help a student develop a PASS, including special education teachers and other school personnel, vocational counselors, social workers, employers, and private PASS vendors. A distinct advantage of a PASS is that it allows the student to be proactive in securing necessary training, support, or services to enhance employment opportunities.

PASS Calculation

$658.00

Gross earnings

- 85.00

General and earned income exclusions

$573.00

Divide this amount by 2

÷ 2

 

286.50

Total countable income

- 244.00

PASS

$42.50

SSI countable income

 

$500.00

Federal benefit rate (1999)

- 42.50

SSI countable income

$457.50

Adjusted SSI benefit rate

+ 658.00

Gross earnings

$1115.50

 

- 244.00

PASS

$871.50

Usable gross income

Blind Work Expenses (BWE)

SSA has special rules for people who are blind, including allowing them to earn a higher income (Substantial Gainful Activity [SGA]) and still maintain SSI eligibility. Blindness is defined as central visual acuity of 20/200 or less, in the better eye with best correction, which has lasted or is expected to last a year or longer. Blind Work Expenses (BWE) is a work incentive that allows a blind person to deduct certain expenses needed to retain employment from their earned income when determining SSI eligibility and payment amount. For individuals who are blind, the BWE work incentive is more advantageous than the IRWE. Examples of BWE include: guide dog expenses; transportation; federal, state, and local income taxes; social security taxes; attendant care services; visual and sensory aids; translation of materials into Braille; professional association fees; and union dues. When developing transition plans for students who are blind, school personnel and parents should contact their regional SSA office to get more specific information on SSA programs and benefits.

Property Essential to Self-Support (PESS)

PESS allows a person to exclude certain resources that are essential to employment for self-support. For example, property that is used in a trade or business or required by a person as an employee is totally excluded when determining resources for SSI eligibility or payment determination. While the PESS may have little application for secondary transition students, it may have utility for some students when they enter the workforce. For example, a student who is trained in carpentry may be required to supply his or her own tools as terms of employment. Under a PESS the value of these tools would not be counted as a resource.

For information on SSI and its work incentives, contact the Social Security Administration, 1-800-772-1213.

The information provided in this appendix was adapted from “Meeting the needs of youth with disabilities: Handbook on Supplemental Security Income work incentives and transition students,” published October 1998 by the National Transition Network at the Institute on Community Integration (UCEDD), University of Minnesota.


Table of Contents

Introduction

Section I
The Goal of Productive Employment for All Youth
The Work-Based Learning (WBL) Approach to Productive Employment for Youth with Disabilities
Career Exploration
Career Assessment
Work-Related Training
Cooperative Work Experience

Requirements of the FLSA Related to WBL
The FLSA and WBL Career Exploration, Career Assessment, and Work-Related Training Components
The FLSA and WBL Cooperative Work Experience Component

Section II: Questions and Answers
Requirements for Participation
Documentation
Program Supervision
Instructional Programming
The Educational Relationship vs. the Employment Relationship

Section III: Case Studies: Examples of Work-Based Learning (WBL) Activities
Example 1: Career Exploration in Initial Transition Planning in a Rural Community
Example 2: Career Assessment Experience in a Cleaning Services Setting
Example 3: A Work-Related Training Experience in a Hotel Laundry Setting
Example 4: Cooperative Work Experience in a Restaurant Setting
Example 5: Career Exploration in Two Suburban Business Settings
Example 6: Career Assessment in a Large Business Setting
Example 7: Work-Related Training in Three Workplace Settings
Example 8: Cooperative Work Experience at Special Minimum Wages

Appendix A: U.S. Department of Labor Employment Standards Administration Wage and Hour Division Regional Contacts

Appendix B: Organizations Providing Assistance in the Planning of Transition Services for Youth With Disabilities
Office of Special Education Programs Regional and Federal Resource Centers
State Transition Contacts

Appendix C: SSI Work Incentives Available to Transition-Age Youth with Disabilities
Earned Income Exclusion (EIE)
Student Earned Income Exclusion (SEIE)
Impairment-Related Work Expense (IRWE)
Plan for Achieving Self-Support (PESS)
Blind Work Expenses (BWE)
Property Essential to Self-Support (PESS)



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Citation: Johnson, D. R., Sword, C., & Habhegger, B. (2004). Essential tools: Handbook for implementing a comprehensive work-based learning program according to the Fair Labor Standards Act (3rd ed.). Minneapolis, MN: University of Minnesota, Institute on Community Integration, National Center on Secondary Education and Transition.

Permission is granted to duplicate this publication in its entirety or portions thereof. Upon request, this publication will be made available in alternative formats. For additional copies of this publication, or to request an alternate format, please contact: Institute on Community Integration Publications Office, 109 Pattee Hall, 150 Pillsbury Drive SE, Minneapolis, MN 55455, (612) 624-4512, icipub@umn.edu.

This document was published by the National Center on Secondary Education and Transition (NCSET). NCSET is supported through a cooperative agreement #H326J000005 with the U.S. Department of Education, Office of Special Education Programs. Opinions expressed herein do not necessarily reflect the policy or position of the U.S. Department of Education Programs, and no official endorsement should be inferred. The University of Minnesota, the U.S. Department of Education, and the National Center on Secondary Education and Transition are equal opportunity employers and educators.