(Following is the second part of Toni Watt’s article on the PASS program, a little known but very important program which is available to social secrity recipients striving to be self-supporting. It is possible to earn money under this program while retaining Medical Assistance and some SSI payments. If you missed Part 1, and want it, call 612-379-0989 and we’ll send you a copy of our November issue – free!) the discussion of the Plan to Achieve Self Support (PASS), the Impairment Related Work Expense was mentioned. The Impairment Related Work Expense or “IRWE,” is another work incentive provided by the Social Security Administration. Impairment Related Work Expenses are the reasonable cost of items and services that because of impairment, one will need or already uses in order to work.
The impairment Related Work Expense is essentially a line item deduction on the sheet your Claims Representative uses to calculate your countable earned income. The IRWE is deducted from gross earned wages to determine the amount of countable income. The standard SSI work incentive formula for a working recipient (Briefly is- minus $85, minus 1/2 the remainder) will be applied after the IRWE has been subtracted from the earned wages.
An IRWE and a PASS can be put in place at the same time, but if a Plan To Achieve Self Support is being submitted prior to beginning a new job, it will in most cases be better to wait on claiming an IRWE and include that work expense in your PASS. Again, the amount of your PASS is not subtracted from your total income until after the standard formula has been applied to your earned income. The 1/2 formula is not applied to the PASS deductions, consequently PASS yields the lower countable income amount.
An Impairment Related Work Expense can be deducted following a Plan To Achieve Self Support. The items/services which qualify as IRWEs and were provided for in the PASS, can at the end of the PASS be restated as Impairment Related Work Expenses.
The greatest advantage of an Impairment Related Work Expense is that it continues as long as the items/services are needed to enable an individual to continue to work.
If someone is already employed and on SSI, you may use an Impairment Related Work Expense to help lower the amount of your countable income.
THE BASIC GUIDELINES ARE:
*The expenses must be necessary to enable an individual with considerable physical or mental impairments to work. An IRWE will cover expenses for an impaired person that would not be necessary if that person was unimpaired.
*The cost must be paid by the individual, and not reimbursable from other sources.
*The expense must be paid in a month the individual is or was working.
*The expense must be reasonable.
SOME SUGGESTED ITEMS/SERVICES WHICH MAY BE EXCLUDED ARE:
*Employment Specialist (needed to maintain gainful employment),
*Attendant Care Services (performed in the work setting, in preparing for work to and from work, and after work. Readers and Interpreters are also necessary services).
*Transportation: the cost of structural or operational modifications to a vehicle, the cost of driver assistance, or transportation service where such is not generally required by unimpaired persons.
*Work-related equipment: special typewriter, computer adaptations, adapted furniture, telecommunication devices, specially modified tools, braille devices, electronic visual aids, etc.
*Residential modifications: ramps, railings, doorways to get to and from work, work space in home for self-employment at home.
*Drugs and medical services: if regularly prescribed and necessary for controlling the disabling conditions (i.e., physical therapy, chemotherapy, anticonvulsant and antidepressant drugs, etc.)
*Medical supplies: catheters, face masks, bandages, elastic stockings, etc.
*Guide dog: food and vet bills, too
*Secretarial assistance to complete paperwork. (Many disabled people type very slowly and cannot keep up with required volumes of work.)
The Social Security Administration must have proof for every IRWE claimed by the disabled worker, including:
*Name and address of prescribing source (Doctor, VR Counselor, Therapists)
*Identify impairment for which the IRWE is prescribed, and
*Present receipts/canceled checks for the expenses that have been incurred.
In most cases, Impairment Related Work Expenses are deducted from gross earnings in the month the expense is paid by the individual.Nonrecurring expenses may be prorated over a 12-consecutive month period.
The IRWE can be used to calculate the individual’s threshold amount if earnings exceed the state’s general threshold amount. One correction about last month’s article — When your earnings exceed the threshold amount it is the Social Security Administration, not Medical Assistance that will determine your individual threshold.
Below are computation examples of a PASS, an IRWE, and a combination of the two.
THE BASIC PASS COMPUTATION:
This person receives $475 SSDI benefits which make her ineligible for SSI payments due to excess income. She wants to save $250 per month to be used for the purchase of a car.
Without PASS With PASS
$475 $475
– 20 Gen. Income Exclusion – 20 G.I.E.
$455 Countable Income $455
– 250 PASS Expenditure
$205 Countable Income
$407 SSI Rate
– 205
No SSI payment due to $202 SSI
excess income Payment
THE BASIC IRWE COMPUTATION
Mr. Jones, a disabled SSI recipient, works in the community for which he is paid $301 per month. His only other source of funds is his SSI check. He pays $150 per month (10 hours @ $15 per hour) for on-going vocational support services that he needs to maintain his employment. His expenses for on-going support qualify as an IRWE.
Without IRWE With IRWE
$301 Earned Income $301 Earned Income
– 150 IRWE
$151
– 20 G.I.E. – 20 G.I.E.
$281 $131
-65 Earned Income Exclusion – 65 E.I.E.
$216 $ 66
-108 1/2 Remaining – 33 1/2 Remaining
$108 Countable Income $ 33 C. I.
$407 SSI Rate $407 SSI Rate
-108 – 33
$299 Net SSI $374 Net SSI
Total Funds Available
$301 Earnings $301 Earnings
299 Net SSI 374 Net SSI
$600 Usable Income $675 Usable Income
-150 Cost of Support
$525
Note: Cost of Support $150; difference in overall Usable Income only $75.
CONCURRENT IRWE/PASS COMPUTATION
Individual is a disabled SSI recipient. He is participating in a job training program for which he is paid $400 per month. He is currently excluding $50 per month (his contribution toward the cost of his physical therapy) as an IRWE. He decides to purchase a specifically modified van to allow him to continue the program and secure employment. The van payment is determined to be excludable under a PASS at $350 per month. The individual also receives $225 per month Title II benefits.
Without IRWE and PASS With IRWE and PASS
$225.00 Title II Benefit $225.00 Title II Benefit
– 20.00 G.I.E. – 20.00 G.I.E.
$205.00 Countable Unearned $205.00 Countable U.I.
Income
$400.00 Wages $400.00 Wages
– 65.00 E.I.E. – 65.00 E.I.E.
$335.00 $335.00
-167.50 1/2 Remainder – 50.00 P.T. (IRWE)
$167.50 Countable Earned $285.00
Income
-142.50 1/2 Remainder
$167.50 Countable E. I. $142.50 Countable E.I.
+205.00 Countable U. I. +205.00 Countable U.I.
$372.50 Total C. I. $347.50 C. I.
-350.00 PASS
0.00 Total C. I.
$368.00 FBR $368.00 FBR
-372.50 – 0.00
0.00 SSI Payable $368.00 SSI Payable
It is important to stress again the issue of keeping PASS funds separate from other funds. This is a condition of approval. It keeps the accounting simple and speeds reviews. The easiest method is open a separate PASS bank account and to deposit only PASS funds into that account. A check book is a good ledger, or a gusiness ledger sheet may provide a clearer picture of the income and out go. All receipts for each expenditure should be saved as proof of compliance with the PASS.
It may benefit some people to know that it is possible to write a PASS after having been established as a 1619b Medicaid recipient. If your vocational goals will keep you from losing a job it is possible to sumit a PASS.
Other little known bits of Business-Related information can be found in the documents given out by the “Clearinghouse” in Chicago, IL. (They have all kinds of training materials and information on PASS and IRWE availabe for various minor fees. Their Toll-Free number is (312) 939-3830. Address: Clearinghouse, 407 S. Dearborn, Suite 400, Chicago, IL 60605).
The General Income Exclusion (FIE = $20) and the Earned Income Exclusion (EIE = $65) are subtracted from the income depending on whether the income is earned or from SSI or both. If one only receives funds from Social Security, you cannot deduct the EIE. If your only income is from wages, you can deduct the GIE and the EIE. One half of the remainder (income minus the appropriate deductions) is not counted against you. This is the basic Supplemental Social Income formula for providing a work incentive. Knowing this basic formula will make it much easier to plan for financial independence.
Next month — a complete example of a PASS and IRWE will be published, and there will be some fine tuning and a discussion of specific PASS histories.
