Braille Monitor                                                                 February 1985

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Social Security Disability Insurance: What Rules Govern Work?
These are the Facts

by James Gashel

Can a blind person receive Social Security Disability Insurance (SSDI) cash benefits and still work? This is one of the most frequently asked questions. And the answers given in Social Security publications and orally are usually misunderstood or misinterpreted. If you visit a Social Security office or call the teleservice number to inquire about working while getting benefits, the likely response is "You can't do it." In one sense that's true. But it is only a technical answer--you cannot work and be paid Social Security Disability Insurance benefits simultaneously, except for during the first year of the trial work period. The technicalities become confusing. In actuality, you can work and receive Social Security Disability Insurance payments month after month after month year after year. So, what are the facts?

In an article entitled "Rights and Requirements for Benefits Under Social Security and Supplemental Security Income: The Special Rules for the Blind," available from the National Federation of the Blind and originally published in the Braille Monitor of February, 1983, we explained many of the special rules relating to eligibility, work, quarters of coverage, appeals, and so forth. These will not be repeated here, except to emphasize again that there are several unique features in the Social Security Act which apply only to blind people. This is true in both Title II (Social Security Disability Insurance) and Title XVI (Supplemental Security Income). So when blind people want correct information about Social Security or SSI benefits, they must be sure to mention that their form of disability is blindness. Otherwise, the rules will be misapplied, and the information resulting will be incorrect.

This is especially true of the question: "Can you work?" The answer for anyone disabled (blind or not) is definitely "yes". Yes, you can work. But the "yes" is far more definite for blind people than for people with other disabilities who are not blind. The difference results from at least two significant amendments to the Social Security Act, one passed in 1967 and one passed ten years later in the Social Security financing amendments of 1977. Both amendments came about because of the efforts of the National Federation of the Blind. We told Congress that blind people should be encouraged to work. This would help reduce outlays for Social Security and increase payments to the trust funds that would be made by the working blind. Congress agreed, and the changes we asked for were made.

The 1967 amendment placed in law a definition of blindness. Section 216(i) (1)(B) of the Social Security Act says blindness means "central visual acuity of 20/200 or less in the better eye with the use of correcting lens. Any eye which is accompanied by a limitation in the field of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees shall be considered for purposes of this paragraph as having a central visual acuity of 20/200 or less." It is important to emphasize that blindness is the only defined disability in the Social Security Act. The definition makes determination of this disability much easier than other disabling conditions. It is rarely a matter of judgment--either someone is blind or not. It depends upon fairly reliable medical techniques of measuring visual acuity and field.

The 1977 amendment placed in law a specific earnings standard to govern eligibility for anyone whose disability is blindness. Section 223(d)(4) of the Social Security Act says in part: "No individual who is blind shall be regarded as having demonstrated an ability to engage in substantial gainful activity on the basis of earnings that do not exceed the exempt amount under section 203(f)(8) which is applicable to individuals described in subparagraph (D) thereof." The individuals described in subparagraph (D) of Section 203(f) ( 8) are people who apply for Social Security retirement benefits when they become age 65. The "exempt amount" is the amount of earned income which a person age 65 to 70 may have without reducing Social Security retirement benefits. So, Section 223 (d)(4) says in effect that anyone whose disability is blindness may earn the same amount as anyone who qualifies for Social Security retirement benefits at age 65. That amount, beginning January, 1985, is $610 per month.

The law does not prescribe an earnings standard or "exempt amount" for persons who are disabled but not blind. Earnings for these individuals are limited to whatever amount the Secretary of Health and Human Services determines. The amount of earnings the Secretary decides to exempt is considered to be a measure of "Substantial Gainful Activity." It is the primary determiner of disability in cases where a person is not blind. So anyone who engages in Substantial Gainful Activity is not disabled. According to current regulations, Substantial Gainful Activity (for a person disabled but not blind) exists when earnings exceed $300 per month.

So what does this tell us about work? It says that anyone who is blind can work while receiving Social Security Disability Insurance benefits as long as earnings do not exceed $610 per month, beginning January, 1985. This exempt amount is more than twice the amount allowed for persons who are disabled but not blind. And the exempt amount for blind people increases every year. Last year (beginning January, 1984) the amount was $580 per month. During 1983 it was $550 per month. Back in 1977 (the last year before the new amendment took effect) blind people were only allowed to earn $240 per month. In 1978 (the first year under the new law) blind people could earn $334 per month. So it is clear that (under the 1977 amendment) not only some work but more work is being allowed as each year passes.

The managers of sheltered workshops used to argue that they could not pay blind people the minimum wage because those who were receiving it would lose their Social Security Disability Insurance benefits. Hence, the blind would be worse off by getting the minimum wage than they would if the shop held the wages down. For several reasons, this was never necessarily true. However, it is provably not true today. During 1985, anyone who works full time at the minimum wage (assuming a full year of work--2,080 hours) will be paid $580.67 per month. This is almost $30 less per month than Social Security will permit for a blind person receiving SSDI benefits. So even some overtime could be worked at the minimum wage, or the shops could pay above the minimum wage. That is unlikely. Still more unlikely is the idea that a blind shopworker would work anywhere near a full year, let alone a full month every month.

Looking at earnings, alone, does not, however, describe the complete picture. Many blind people can actually be paid more than $610 per month and still qualify for SSDI benefits. How can this be? When the Social Security Administration looks at income from work, it is done to determine whether the work represents "Substantial Gainful Activity." Normally, income of $610 per month or more during 1985 will be considered as a measure of "Substantial Gainful Activity" for blind people who work. This is by no means necessarily the case, however.

Remember that Social Security Disability Insurance is, in fact, an insurance program, not welfare. Anyone can be wealthy and still get SSDI cash benefits each month. The benefits are paid to people who cannot work or cannot work very much. If you are working, but earning less than $610 per month this year, Social Security will assume that you cannot work very.much. Hence, you are qualified to receive SSDI checks if you have paid into Social Security for the required number of quarters in your case. The exemption of "true earnings" below $610 per month for blind employees during 1985 is explained in Social Security's Program Operations Manual System Section DI 00503.410B3. Section DI 00503.415 B explains the exemption of earnings for blind people who are self employed. Both provisions follow the assumption stated above, that any blind person cannot engage in Substantial Gainful Activity if true earnings do not exceed $610 per month during 1985.

Even if your income exceeds $610 per month, some of it may not actually represent "true earnings." The concept of "true earnings" is used in Social Security to determine if any earned income is a subsidy or results from some form of tangible assistance that results in a subsidy. The method for determining "true earnings" is explained in Social Security's Program Operations Manual System, Section DI 00503.105. To illustrate how "true earnings" differ from total income, take the typical example of a blind person employed in a shelterd workshop. In sheltered workshops, they make a great to do about measuring the productivity of each blind worker. This is done under regulations of the United States Department of Labor. If a workshop follows those regulations, there will be a productivity measure for each blind worker, or a productivity standard which represents a workshop average. If a blind person's productivity is measured at 50% of the productivity normally expected for sighted workers doing essentially the same type, quantity, and quality of work, the blind person must be paid at least 50% of the prevailing wage in the area paid to comparable sighted workers. As Social Security sees it, the wage based on productivity represents "true earnings" or a measure of actual work. If that amount is the minimum wage or somewhat less, "true earnings" are not substantial enough to prevent receiving SSDI checks while working. But what happens if the workshop decides to pay the same blind worker $3.50 per hour or even more?

From the point of view of Social Security, the amount paid above the productivity wage or "true earnings" is not a measure of the blind person's work. It is a subsidy or a gift. To the blind person in question, it is certainly monthly income. It is as good as any other money. It buys groceries, pays the rent, helps to pay for heat and light, and generally spends as fast as any other money. But, at the Social Security office, this portion of the blind person's income (the amount above "true earnings") cannot be considered. It is a payment over and above productivity. So the individual in question may actually have monthly income of $650 or even more, without losing eligibility for SSDI checks.

But blind shop workers are not the only ones whose earnings are subsidized. Consider the circumstances of another large group of blind individuals--the blind vendors. Most vendors are accustomed to thinking of themselves as independent, self-employed businessmen or women. Certainly they should be. But the fact is that blind vendors also have a continuing relationship with the state agency for the blind who licenses them to conduct business on public or private property. This relationship normally involves certain benefits that the blind vendor receives as part of the state's business enterprises or Randolph-Sheppard Program. The benefits may include free space; free utilities; provision, replacement, and repair of equipment; business counseling or consulting; accounting services; payment of a fair minimum return; and /or payments of vending machine income. Some vendors get all of these and more. Other vendors get fewer. But there is almost no case where a vendor does not receive at least some benefit of the type described by virtue of participating in the state-sponsored business enterprises program.

In addition, except in the rarest of instances, blind vendors are self employed individuals. As is common in many small businesses of this type, family members or friends may work in the business to assist the principal operator. If the family member or someone else who helps is not paid, the work done can be valued as a service to the vendor. It is work that the vendor would pay for out of earnings if it were not done by a family member or other friend as a form of personal assistance.

It can be then assumed that most or all benefits provided to a vendor by the state are either direct payments of money, as in the case of vending machine income, or are services which translate into money, as in the case of free space. If the space was not provided free, the vendor would have to pay for it. Hence, the income of the vendor would be reduced. So, free space is a service which increases the income of the vendor. So does the unpaid assistance of a family member or friend who might help the vendor operate the business. In a more direct way, vending machine proceeds paid to vendors also increase income. For example, a vendor who operates a business on federal property may, in some instances, receive up to $17,300 in vending machine income from vending machines that compete with the business. These are not machines operated by the vendor. They are operated by vending companies or employee groups. The law requires that the vendor be paid some of the income and contains an elaborate formula for determining how much. So the vendor is merely the beneficiary of a law that grants vending machine income to any blind person who operates a particular vending facility in a particular federal building. The vendor does no work to receive the income. It is a straight subsidy. Even though it may be a lot, up to a national ceiling of about $17,300, it is still a subsidy and does not count as earnings of the vendor for purposes of Social Security.

In the case of a vendor, as I am describing, the Social Security Administration must evaluate how much of the income represents a measure of work. The amount that is not "true earnings" should be excluded. So if a vendor earns $22,000 per year, and if $17,000 of this amount comes to the vendor from vending machine proceeds, as described above, that amount ($17,000) cannot be counted as "true" earnings. The vendor's true earnings are only $5,000 in this example. That would be an average of about $417 per month, well below the allowed $610 per month for a blind person to receive SSDI checks.

That is the easy example. Now take the same vendor, with income of $22,000 per year, but vending machine income of only $8,000. In determining Social Security eligibility, the income of $22,000 would first be reduced by $8,000, the amount of the vending machine income. It is a subsidy and does not reflect "true earnings." This would still leave an annual income of $14,000, or an average monthly income of almost $1,170. That far exceeds the amount of earnings that the Social Security Administration can exempt. But all is not lost. The amount it costs to provide the vendor with the space (even if the space is free to the vendor) must be considered. The amount it costs to provide utilities to operate the business (even if this is not a cost to the vendor) must also be considered. The amount it costs to provide, repair, or replace equipment (even though these costs are borne by the state licensing agency, not the vendor) should be included. The value of any business consulting or counseling help given free by the agency can be counted. Social Security's Program Operations Manual System, Sections DI 00503.310 B2a and DI 005,03.415 refer to such items as "unincurred business expenses." All of them are to be subtracted from net earnings to arrive at "true earnings." In addition, the reasonable value of unpaid help (if any) must also be excluded to arrive at "true earnings." The point is that both the "unincurred business expenses," and the "reasonable value of unpaid help," are costs which should be deducted from any vendor's net earnings to yield what Social Security will count as "true earnings." The result, then, of reaching "true earnings" by deducting any vending machine income as a subsidy and the other expenses (even though they are not incurred by the vendor) is the exclusion of much income that if counted would make the vendor in question ineligible for SSDI checks. The cost of space alone, in the example I am using, would probably reduce the vendor's earnings by $500 per month or more, depending upon customary rent charges in the area. If utilities are considered, this vendor's actual earnings would certainly fall below $610 per month. Thus, a vendor with an annual income of $22,000 still remains eligible to receive Social Security Disability Insurance cash benefits each month.

In my experience, many vendors and some shop workers fail to explain their exact earnings situation to the Social Security Administration. They simply consider (if they know it) the amount of earnings allowed and think of all of their income as earned income. Then they lose eligibility for SSDI checks. They wonder why someone else does not. The answer may lie in how carefully the income is explained to the Social Security Administration. Remember, anything that is not a measure of work may be excluded. There is no limit on income derived from subsidies, gifts, investments, reasonable value of unpaid help, unineurred business expenses, or other forms of income. Only earnings-- "true earnings"--can be counted. These concepts relating to how you determine "true earnings" as opposed to total income apply to all blind people who work either as employees or self employed persons. The procedures outlined above to exclude subsidies and other payments that inflate income above "true earnings" are not limited to blind shopworkers or vendors. So the same rationale should be applied to analyze income derived from any other form of work. But some of us are not in a position to distinguish our earned income from any form of subsidy. Nor do we have unineurred business expenses or other deductible forms of income of this type. All of our earnings appear to be "true earnings." Are we then limited only to the $610 per month average earnings? The answer is 'certainly not" Some expenses that a worker (vendor, shopworker, teacher, lawyer, or otherwise) has may be deductible from actual earnings. The deduction is called "impairment-related work expenses." These are expenses, such as payments to a reader or amounts paid for other forms of clerical assistance. Any unusual transportation expenses are also deductible, if they relate to doing the work. Hiring a driver in order to make personal calls and home visits would be an example. Care and feeding of a dog guide is also an impairment related work expense regardless of the fact that the dog would have to be cared for and fed whether its blind user was working or not. The cost is deductible since the dog guide does help the blind person have the ability to get to and from work and to move about on the job. The cost of purchasing aids or devices used in work is also deductible, even though the aid or device may be used at times other than work. So a computer, a reading machine, an electronic paperless Braille system or talking terminal, or even a hard-copy Braille printer, and anything else of a similar nature would be deductible so long as it is justified by demands of work.

Deductions for impairment-related work expenses such as these will often reduce a blind individual's earned income to the point where eligibility for SSDI checks will continue or can be established. For instance, anyone who is earning, say $900 per month may be eligible if $290 or more of expenses can be attributed to items such as those mentioned above--paying readers, secretaries, drivers, dog guide expenses, and purchase of aids. These are not unusual expenses for many beginning professionals. Anyone who has such expenses should not assume that earnings which exceed $610 per month will prevent eligibility for SSDI checks.

These are the facts. Remember that true earnings are not necessarily the same as the amount of gross pay for an employeee or the amount of net self- employment income. The next time someone from the Social Security Office says you can't work and get disability insurance benefits, remember what the answer really means. No, you can't work if your income is going to be considered "Substantial Gainful Activity," and if none of it can be deducted to reach "true earnings" below $610 per month. But you certainly can work as long as your "true earnings" (never mind total earnings) do not exceed the amount established to measure "Substantial Gainful Activity." These are the facts. Try them out at your local Social Security Office. The results may be to your liking.