Braille Monitor January 2005
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Social Security Disability
Insurance: Important Facts
for Blind Vendors and Other Self-Employed Blind Individuals
Revised by James McCarthy
From the Editor: The following article first appeared in 1991. It was written by James Gashel and was prepared to assist blind vendors and other self-employed blind people. James McCarthy, NFB director of governmental affairs, has now revised it to include today's Social Security figures. Here it is:
Social Security Disability Insurance (SSDI) is insurance, not welfare. An individual becomes entitled by working and paying in during enough calendar quarters. Once the eligibility conditions are met, benefits can then be paid. Being poor is not one of the conditions. Rich people also qualify for Social Security. The question of whether an individual agrees or disagrees is not really relevant. The law is the law.
The SSDI program pays monthly cash benefits to people under age sixty-five who have worked a sufficient amount of time in Social Security-covered employment or self-employment, provided they are blind or disabled under the law. Licensed vendors in the Randolph-Sheppard program are presumably blind under the Social Security Act since the definition of blindness used in both laws (Randolph-Sheppard and Social Security) is identical. Both laws define blindness as visual acuity of 20/200 in the better eye with correction or a visual field of less than 20 degrees in the better eye with correction. Note that not every blind vendor automatically qualifies for an SSDI check.
This article responds to the many questions which continue to arise from vendors or those assisting them in determining their potential eligibility for monthly SSDI checks. In many respects the circumstances under which vendors operate and receive their income are unique and have unique implications that must be understood to deal effectively with Social Security issues. Social Security personnel can apply the requirements of the law correctly only if we are able to give them the facts they need to evaluate income and earnings. This is particularly important for vendors and their advocates. While many of the facts and concepts presented here apply to all blind people in dealing with Social Security, this article highlights the particular considerations that apply to self-employed blind people who are primarily vendors.
Three principal eligibility factors are necessary to entitle a blind person to receive SSDI benefits: blindness, being "fully insured," and having stopped doing "substantial work." Note that, for those who are not blind, there is a fourth requirement, being "recently insured." (More about this later.)
Being Fully Insured
Any blind person who has enough quarters of coverage is deemed to be "fully insured." The Social Security Administration will tell you how many quarters of coverage you have. During 2005, for every $920 you earn, you are credited with one quarter of coverage. If you earn $3,680 or more in 2005, you will receive the maximum of four quarters of coverage for the year. The amount needed to earn quarters of coverage increases annually beginning in January of each new year.
An individual needs to have worked the required time under Social Security-covered employment or self-employment. The amount of past work required of any blind person is a matter of individual determination, depending on when the person became age twenty-one and the year in which blindness began, or (if blind before or while working) the year in which the person stopped doing substantial work.
For blind people who became twenty-one in 1950 or later, quarters of coverage accrue in the following manner. Count every year from the year of age twenty-two with a minimum of one quarter of coverage necessary for each year you include in your count. (You can ask Social Security or us for the amount of earnings required each year to equal one quarter and four quarters of coverage.) The year that ends the count is the year prior to the later of two possible events: the year that the person became blind or the year the person stopped doing substantial work. As an example, Jane was born blind and turned twenty-one in 1990. She stopped performing substantial work in 2002. In order to figure out how many quarters of coverage she will need to be considered fully insured, we count the number of years, between 1991 (the year after Jane became twenty-one) and 2001 (the year before Jane stopped performing substantial work). This totals eleven years (1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, and 2001). Therefore Jane will need eleven quarters of coverage to qualify.
For blind people who became twenty-one before 1950, the years counted to have enough quarters of coverage begin with 1951. The count ends in either the year before blindness began or the year before loss of substantial work occurred. Again, focus on the later of these two events. For example, Joe became twenty-one in 1948. He became blind in 1960 and stopped performing substantial work at that time. In order to figure out the number of quarters of coverage that Joe needs to be considered fully insured, we count the number of elapsed years between 1951 and 1959 (the year before Joe became blind and stopped performing substantial work). This totals nine years (1951, 1952, 1953, 1954, 1955, 1956, 1957, 1958, and 1959). Joe will therefore need nine quarters of coverage to qualify.
It is not required that quarters of coverage be earned in any particular year. It is only that the number of quarters (regardless of when earned) must total at least the required number of years for each individual. Younger people who became blind or stopped doing substantial work in their twenties, for example, can qualify with as few as six quarters, but no fewer. Older people will need substantially more quarters. In this country, when you work and pay Social Security taxes as a result of your work, those taxes pay for Social Security coverage if you ever become disabled or retired.
Being Recently Insured
Being blind and being fully insured are the first two important eligibility conditions for SSDI checks. Disabled people who are not blind must also meet a third condition, which is called "recently insured." They must have worked enough to earn quarters of coverage in at least twenty out of the most recent forty quarters. This means that a substantial number of their quarters of coverage must have been earned during at least five out of the most recent ten years. Social Security personnel sometimes erroneously apply this recent-work requirement to blind people. But remember, the blind need only be fully insured, not recently insured.
Substantial Gainful Activity
The requirement that an individual not do substantial work applies to initial eligibility for SSDI and must be maintained to continue eligibility for monthly benefits. The remainder of this article explains substantial work and deductions available to self-employed blind vendors that can reduce the income considered by the Social Security Administration (SSA). It is critical that vendors carefully read the paragraphs that follow and make their SSA representatives aware of all applicable deductions to ensure that correct results are achieved.
What does it mean to say that a blind person has stopped doing substantial work? In addition to blindness and being fully insured, not doing substantial work is the third principal condition of eligibility for SSDI benefits if an individual is blind. Generally, any blind person whose "countable income" is less than $1,380 per month in 2005 is not doing substantial work. The amount of time spent at work and the amount of actual labor or management work done does not count. Only income is evaluated in the case of blind people applying for SSDI benefits. The monthly amount allowed for countable income is $1,380 during 2005. Beginning in January of each new year, the amount of countable income used to measure "substantial gainful activity" (SSA's term for substantial work) for blind people increases by law.
Trial Work Period
Following an individual's eligibility for SSDI benefits, nine months of trial work are allowed without any restriction on earnings whatsoever. A month counts as a trial work month if earnings exceed $590 in 2005 (with increases each January). Self-employment trial work months may be determined by use of the financial guidelines, but a calendar month may also be considered a trial work month if the time worked in the business exceeds eighty hours, even if the net profit for the calendar month was below the trial work month guidelines. Trial work months are not necessarily consecutive. The trial work period ends with the end of the ninth month that counts as trial work under the earnings or hours criteria specified.
Countable Income: Exclusions and Deductions
For SSDI purposes a self-employed person's net income after business expenses is not necessarily the income used to determine the performance of substantial work and thus an individual's eligibility for SSDI benefits. SSA will consider a self-employed person's countable income, but not all income is necessarily countable income. Deductions to reach countable income may bring an individual's income below the monthly substantial work amount allowed. This is important to blind vendors and other self-employed blind people because they have specific rights which may legally reduce the amount of countable income and thus permit them to be eligible to receive SSDI checks.
Unincurred business expenses are a form of subsidy that must be excluded from real income to reach countable income. In most instances space for the vending facility is provided without charge to the blind vendor, making the value of the space an unincurred business expense. Without the contribution of the space, the vendor would have to pay the cost; so the free space artificially inflates the vendor's income. Its value should then be subtracted from the vendor's real (before taxes) income. The building management should be able to provide an estimate of the charge per square foot if the space had to be rented. Free utilities are also an unincurred business expense. Their value can be determined. It is the amount of the utility costs (even though the vendor does not pay them) that should be subtracted from the vendor's income.
Another example of a subsidy commonly found in the vending program is the receipt of income from vending machines that are not operated by the blind vendor. When a blind vendor's facility is on federal property, the Randolph-Sheppard Act requires the owner of vending machines in direct competition with the blind vendor to pay a subsidy to the blind vendor. Depending on the state, this requirement may also apply to vending facilities located on state, county, or municipal property. In these circumstances the income received by the blind vendor should not be included as "countable income" because it does not result from the vendor's work effort.
Impairment-related work expenses should also be considered and subtracted from the vendor's income. Paid help for clerical assistance, reading, driving, and other services of a work and impairment-related nature can be deducted to determine countable income. Buying devices that are blindness-related and used in part (or entirely) for work is another form of impairment-related work expense. Monthly installment payments on accounts for equipment purchases can be subtracted to reach countable income. So can care of a dog guide or the purchase of some medications. Special transportation services, such as taxi fares when public transit is not available or cannot be used, are also deductible. Impairment-related work expenses can actually be any costs resulting from blindness and necessary for work (at least in part).
In sum, real (before taxes) income is not necessarily countable income, especially in the case of blind vendors. The Social Security Administration is interested in identifying countable income only and is supposed to exclude other income that is not an accurate measurement of work. The exclusions include any subsidies, the reasonable value of unpaid help, unincurred business expenses, and impairment-related work expenses. Once these standard deductions have been made, countable income that is below the amount allowed will not be called substantial gainful work. If countable income is above the monthly amount allowed after all of the deductions have been made, substantial gainful work exists, and eligibility for SSDI benefits will stop after a trial work period is over.
While the Social Security Act is not everything that it might be, the work incentives that the National Federation of the Blind has won give blind people the opportunity to get a foothold and begin to support themselves without abrupt termination of their Social Security benefits. Whatever an individual may think of the law, it is certainly better for the blind than it used to be. Blindness is a separate category with advantages, both in the amount that can be earned and in eligibility for benefits over other groups of the disabled. Most disabled people who are not blind can earn only $830 per month (in 2005) before their SSDI checks are terminated. If people have more than one disability (including blindness) that could establish eligibility for benefits, they would be best advised to claim blindness.
There is strength in numbers, but numbers alone are not enough. Knowledge and concerted action year after year are also required. The National Federation of the Blind is a force to be reckoned with. It grows stronger each day. The National Federation of the Blind has always advocated for blind SSDI beneficiaries and will continue to do so.
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