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Noxious Earnings Restrictions


Marta Russell

My

friend David just went through what could be termed an noxious and unproductive

bout with the Social Security Administration(SSA). David was an understudy for

Dustin Hoffman’s Rainman character (autistic) and works for a large chain

electronics retail corporation. He remains qualified for Supplemental Security

Income (SSI) even though he has a job because he is disabled and earns so little

money. When David wanted a computer he saved for six long years before he was

able to have the funds to buy one. His SSI check is reduced in proportion to his

earnings.

The

story is a simple one. After the LA earthquake David and his mother had to move

out of their apartment for earthquake repairs. David went to stay in board and

care facility while his mother made other arrangements for herself for the

months it took to do the repairs. Prior to this move, David had been sending SSA

the required reports of his earnings so SSA could calculate deductions. But due

to the disruption of the earthquake David’s routine was upset and he did not

send the copies of his pay checks to SSA during the months he was not living at

home. SSA put a stop on David’s SSI check due to not getting his reports.

David

and his mother got a hearing before an Administrative Law Judge where David’s

mother presented the judge with proof of his earnings. As caretaker of his SS

and SSI accounts, she plead that although she is ultimately responsible for

sending in the copies of his pay checks, she has given David any and every

possible means of being as self-sufficient and independent in keeping with

independent living philosophy. Therefore, she allowed him to make and send his

reports himself, which he is very capable of doing and had done without failure

prior to moving into the group home. As it turned out, David thought that he did

not have to send the pay checks because he was living at the group home, not at

his home. In his mind sending in the reports was connected to living in his

home. As his mother explained it “David is not capable of lying, he doesn’t

know what that is.”

Further

David’s mother told the judge that she had explained to each of the three

care-takers he was with during that time out of the house, that he needed to

send SSA the copies of his pay checks each month. But the judge made no

allowances for David’s misunderstanding, the group home’s failure to follow

a parent’s instructions or his mother’s ultimate not seeing that the report

had been sent. Instead, the judge held that not sending the reports was enough

reason and discontinued David’s SSI payments.

David

had his mother to fall back on for financial support, but what about others who

may not have such support and innocently make mistakes and get penalized? A loss

of a few hundred dollars to some may mean losing their apartments and winding up

on the streets or create conditions where they can no longer hold a job. It can

even end in death, as in the case of quadriplegic Lynn Thompson who living on

SSI ($600 per month) tried to earn some extra money by stuffing envelopes at

home. Unbeknownst to her, the work she did was in violation of SSA regulations.

When she reported her income to SSA, they responded with a letter stating that

she had received an overpayment of $10,000, and that her benefits would be

terminated until it was paid back. SSA claimed that her MediCal and attendant

benefits would also be cut off. Losing one’s attendant is a ticket for a nursing

home, but loss of Medi-Cal is a death sentence (SSA was wrong about this part,

she would not have lost her Medi-Cal). After a grueling and demeaning contest

with SSA, Lynn Thompson killed herself. She left a recorded message saying that

the reason for her suicide was that SSA had put her through hell and she could

no longer live with the anxiety.

This

past spring President Clinton signed The Social Security Earnings Test

Elimination Act which permits seniors to earn as much as they want and continue

to receive their Social Security retirement benefits in full without any

deductions. Proponents attributed the bipartisan consensus that green lighted

the bill in Congress to unprecedented economic growth and subsequent worker

shortages nationwide. The move was predicated on government’s perception that

it would serve the economy for seniors to continue working. There is a case to

be made for ending earning limitations for disabled workers on Social Security

disability benefits as well.

Under

the previous regulations, both seniors and disabled persons under 65 collecting

Social Security benefits were financially penalized for working — but the

penalties were not spread evenly. Seniors 65 to 69 who earned more than $17,000

annually lost $1 in benefits for each additional $3 earned. Under Social

Security Disability Insurance (SSDI) rules, a disabled worker can continue to

collect benefits as long as earnings do not exceed $700 per month. When earnings

topple the $700 mark for nine months, one no longer qualifies for benefits

(blind limit is $1,000).

For

those on SSI, the needs based disability program that David is on, the

eligibility formula gets more complicated. Federal rules allow earnings up to

$65 per month without losing any SSI dollars but then one loses $1 in benefits

for each additional $3 earned. Once one earns twice their SSI check (plus $65)

they will reach the "break even" point and will be severed from

benefits. The cut-off amount varies from state to state but for the majority of

Californians on SSI, it is about $17,388 per year (some plans allow for

deduction of work related expenses and this can push the cut-off a bit higher).

These

numbers raise basic questions about distributive fairness and treating groups

evenhandedly. Do people realize that workers on SSI (but not SSDI) are boxed

into asset limitations which do not apply to seniors who get Social Security?

Once an SSI recipient saves over $2,000, s/he no longer qualifies for disability

benefits, no matter that one is still impaired. In light of this, is it

equitable that seniors with no limitations on their bank accounts are now

permitted to earn unlimited sums and not lose a penny of their Social Security

when disabled people are forced into abject poverty to keep theirs?

Is

it equitable that a worker on SSI has their income docked once they earn over

$65 and that they lose the right entirely to collect benefits at approximately

the same level of annual earnings – $17,000 – that a senior’s Social Security

check began to be reduced by the former retirement earning limitation rules?

The

equity question is important because poverty is chronically disproportionate

amongst the disabled population. A 1998 National Organization on

Disability/Louis Harris Survey found that fully a third of adults with

disabilities live in a household with an annual income of less than $15,000

compared to one in eight of those without disabilities – a 22 point gap. Poverty

deepens for those surviving on Social Security benefits.

The

difference in treatment between the senior and disabled workers needs to be

leveled to reflect hardship. Disabled workers, for instance, often have not

worked as many years as seniors who have had a lifetime to build up their

financial assets. Despite the ADA, many disabled workers find themselves without

a job when they acquire a disability. Due to medical and other expenses, many

disabled workers run through any savings and retirement accounts they had

managed to acquire pre-disablement.

Some

workers have not only lost their jobs but have lost their houses and their cars

- everything they owned – waiting for Social Security disability benefits to be

approved. Other persons on disability benefits have lost years of employment due

to prejudicial discrimination and a systemic economic discrimination that forces

them into unemployment when they would prefer to have a job. If they do get a

job, disabled persons may find hardship in the form of underemployment since

workers with impairments are more likely to work part time and more sporadically

than nondisabled workers for both economic and noneconomic reasons.

Many

disabled workers will never be able to recapture the income they forfeited upon

disablement but they also may continue to lose ground because of earnings gaps.

In 1995, for instance, disabled workers earned on average only 72.4 percent of

the amount nondisabled workers earned (Census Bureau).

In

addition, there are practical administrative reasons to do away with earning

limitations. Any work activity can result in sudden termination of crucial

benefits whether Social Security (SSA) administrative determinations are right

or wrong. Work rules are so complex it takes a degree in SSA policy to manage

work without triggering a predicament. Even when one does get the rules right,

disabled workers can find themselves in receipt of incorrect letters of benefits

termination and overpayment notices from SSA and embroiled in bureaucratic

appeals or appearances before an Administrative Law Judge. One may find

themselves deemed ineligible for Medicaid or personal assistance services or

beset with a hefty share of cost on benefits even though one is earning too

little money to pay for these services. Are the confusing and bureaucratically

costly rules really necessary or productive?

Disability

earnings limitation rules can become work disincentives or impediments to work.

They can inflict unnecessary trauma as in Lynn Thompsons and others cases.

Politicians agree that it is beneficial to the nation that seniors continue to

work and collect all of their Social Security benefits even if they make over

$100,000 per year. The new rule is projected to cost the treasury billions of

dollars. The penalty placed on working disabled persons when their costs often

exceed the average worker’s has never been truly reasonable. The $2,000.00 cap

on monetary assets for SSI eligibility is totally outdated. What harm would be

done to this wealthy nation if disabled workers on SSDI and SSI were allowed to

earn as much as they could without fear of losing their benefits? How about

changing the rules so those on SSI may have assets over $2,000? Then perhaps,

the largely impoverished working disabled population could get a financial leg

up on life.

Disabled

persons don’t become nondisabled either physically, mentally or economically

just because they work. They retain their impairments and the labor market

disadvantages that come with them under the current economic system. As an

associate who favors a lifelong disability income parity benefit put it “I

believe that if you have gone through enough to get disability benefits, you

have paid far more than the price of a sub-poverty level dole.”

If

the nation can give wealthy seniors a financial boost it can afford to do the

same for the disabled population.

 

Marta

Russell is author of Beyond Ramps: Disability at the End of the Social

Contract (Common Courage Press 1998).

  

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