5205.01

Revised August 2005

Protection &
Advocacy, Inc.

Employed Person: Reporting Changes in
Employee Earned Income to Social Security

This information is for people who receive earned income as an employee. If you are self-employed or receive income as an independent contractor or receive an “honorarium” or book royalties, see the separate information packet about reporting to Social Security about earnings as an independent contractor or other self-employment.

If you have questions about your disability benefits and earned income, call PAI at its toll-free number and ask to speak with our Social Security and Work Advocate. You can also visit the Social Security website at www.ssa.gov/work/index2.html or the SSI and work page on our website at www.pai-ca.org. There are Social Security regulations cited below. You can see those regulations at www.ssa.gov/regulations/index.htm#top. Click on “Code of Federal Regulations.”

You must keep your own records because you cannot count on Social Security’s filing or record-keeping system.

If you receive SSI or Social Security Disability benefits, you must:

¨ Keep a copy of everything Social Security sends you. Save the envelopes!

¨ Keep a copy of everything you send Social Security.

¨ Take notes whenever you talk to someone at Social Security or whenever you meet with someone at Social Security. Write down the person’s name and what you talked about and the date you talked or met.

We recommend that you three-hole punch your papers and put them in a notebook. We also recommend that you three-hole punch a manila envelope and put the envelope in your notebook so that you have a secure place to keep your check stubs and receipts.

If you receive SSI:

SSI regulations say that you must report to Social Security any change in income that may affect the amount of your benefits. You must do so by the 10th of the month following the income change month. See 20 C.F.R. §§ 416.704 through 416.714 and Question & Answer (Q&A) 54 and updates in the Social Security (SS) Manual. The earned income you report is gross earned income – what you earn before any deductions. If there is no change from the prior month, you do not report. Under Social Security’s system, a change in income in one month will affect your SSI check two months later. If your income in January is lower than your income in December, you report the change by February 10, and your SSI check will be adjusted upwards in March. However, if your income in a month is too high to qualify for any SSI/SSP grant, you would not be eligible for SSI/SSP in that month.[1] Although you have until the 10th of a month to report changes in your income the prior month, we recommend you get the change information to Social Security by the 5th or 6th of the month. The income you receive may reduce the amount of your SSI. See Q&A’s 34, 36, 37 and 38 and updates in the SS Manual. For instance, if you only receive SSI and you receive $225 for work in January and you have no other income or deductions for Impairment Related Work Expenses (IRWEs) if disabled or Blind Work Expenses, your countable income for January will be $70. Your check for March should be reduced $70:

Gross earned income ......................................................... $225.00
Less $20 any-income deduction* ........................................ (20.00)
Less $65 earned income deduction ..................................... (65.00)
Less Impairment Related Work Expenses (IRWEs) .............. - 0 -
Subtotal ............................................................................. $140.00
Less 50% of the subtotal. …................................................. (70.00)
Less Blind Work Expenses ................................................... - 0 -
Countable SSI Income ........................................................ $ 70.00

*If you have any unearned income, the $20 any-income deduction is taken first from unearned income.

If you receive Social Security (Title II) benefits such as Social Security Disability Income or Disabled Adult Child Benefits:

Social Security regulations require that you report work activity and earnings. 20 C.F.R. § 404.1588, Q&A 56 and updates in the SS Manual. That means you must report when you first start to work and in any subsequent month if your earnings increase. If in a month your earnings average more than $590 in 20051, that month would count as a trial work period (TWP) month. 20 C.F.R. § 404.1592. Your TWP consists of nine trial work months within a 60-month period.

If you already have nine trial work months, earnings of more than $830 a month (or $1380 if blind) in 2005 may trigger termination of your Social Security disability benefits (SSDI or DAC). Your Title II benefits may stop even though you are someone who is working while still disabled. Your Medicare benefits would continue See Q&As 41, 42, 48, 49 and 50 and updates in the Social Security Manual.

If you receive both SSI and Social Security (Title II) benefits:

You need to report to both the SSI and the Title II Social Security unit. They do not talk to each other. Send a copy of what you send to the Title XVI unit to the same address but write on the copy “Attention Title II unit.”

Notes: Social Security counts gross earned income, not your take home pay. Social Security counts your earnings before there are any deductions.

Social Security does not count as income reimbursement for expenses -- such as for mileage, parking, meals.

Each year Social Security usually will increase (a) the amount you can earn before the earnings may count as “substantial gainful activity” or SGA for both the disability and blind Title II Social Security programs, and (b) the amount you can earn before the earnings count as a trial work period month. 20 C.F.R. §§ 404.1574(b)(2)(ii), 404.1592(b)(1)(ii).

Special Deductions for Certain Work Expenses

Impairment Related Work Expenses (IRWEs):

Out-of-pocket expenses you have both because you have a disability and because you work. 20 C.F.R. 404.1576, 416.976; Q&A 46 and updates in the SS Manual. This deduction is available to persons who qualify for disability benefits. Examples include attendant care assistance while at work, transportation costs if you are unable to rely on public transportation because of your disability, attendant care assistance to get you ready for work and to help you on returning home from work. IRWEs can include out-of-pocket medical expenses related to your disability if necessary to help you work or to continue to be able to work even if you would have those same expenses if you were not working.

IRWEs for people who receive SSI:

Impairment Related Work Expenses that you pay for yourself can be deducted from your earned income. Your countable income – the amount by which your SSI grant would be reduced – is determined after deducting IRWEs along with other earned income deductions. This deduction is available to persons who receive SSI on the basis of disability not blindness. It is also available to persons who receive SSI on the basis of age (65 or older) but who have a disability and received SSI on the basis of disability in the month before their 65^th birthday. 20 C.F.R. 416.1112(c)(6); Q&A 46 and updates in SS Manual.

IRWEs for people who receive Social Security (Title II) benefits based on disability including Social Security Disability Income (SSDI), Disabled Adult Child or Child Disability Benefits (DAC or CDB) or Disabled Widow Benefits:

Impairment Related Work Expenses you pay for yourself are deducted from your earned income before looking to see if your income is high enough to indicate your work may constitute substantial gainful activity or SGA. Your IRWEs are deducted from your gross earned income to determine if your earned income after IRWEs in 2005 is more than $830 (if you receive benefits on the basis of a disability) or more than $1380 (if you receive benefits on the basis of blindness). 20 C.F.R. §§ 404.1574(b)(1), 404.1576; Q&A 46 and updates in SS Manual. IRWEs are not deducted from earnings to see if a month counts as a trial work period month. POM ID 13010.050.

SSI Blind Work Expenses:

Persons who receive SSI on the basis of blindness are not eligible to deduct Impairment Related Work Expenses. They are, however, able to deduct blind work expenses which is any expense reasonably related to working. That would include most IRWEs plus other expenses related to working which are not impairment related (mandatory deductions for taxes or pension contributions, bus fare, uniforms, equipment, meals when at work, etc.). This deduction is available to SSI recipients under age 65 and to persons 65 and older if they received SSI in the month before their 65^th birthday. 20 C.F.R. 416.1112(c)(8); Q&A 51 and updates in SS Manual.

Questions? Call 1-800-776-5746 and ask for PAI’s Social Security and Work Advocate.

How to Use the Attached Report Forms

The Form Addressed to the SSI Unit (SSI Recipients’ Report Form):

Fill in the address of your Social Security office and information about you after the “re”. Make many copies of the form. We recommend you three-hole punch the copies.

Each month fill in on top the date you are signing and mailing in the form. Write in the month you are reporting about. That will usually be the month prior. Photocopy your check stubs. Attach the photocopies to the form you are mailing in to Social Security. On the bottom lines of the form letter, write in the date you received the check or checks and the gross income amount or amounts.

Fill out a form for your own notebook records. Staple the originals of your paycheck stubs to your copy of the letter and put in your notebook. Write down on your copy the date you mailed in the form. Write “put in mailbox on December 6, 2002.” Bring your records with you whenever you go to Social Security.

The Form Addressed to the Title II Unit:

Fill in the address of your Social Security office and information about you after the “re”. Make many copies of the form. We recommend you three-hole punch the copies.

You must report your earnings the first month you start work on a job and in any later month if your income decreases or stops on the top of the form. Fill in the date you are signing and mailing in the form. Write in the month you are reporting about (usually the month prior) and the amount of the gross income – the amount you earned before any deductions. Check the statement that applies about your income -- i.e., whether it is a one-time thing or will continue. Staple a photocopy of the pay stub or other evidence of payment to the letter you are sending to Social Security. Staple the original to your copy of the letter and put in your notebook. Write down on your copy the date you mailed in the form.

If in 2005 you are receiving more than $590 a month in gross income (before deductions) and your income goes down, we strongly recommend that you tell Social Security your income has gone down. We strongly recommend that you also let Social Security know when you stop working.

If you used to receive Title II Social Security disability benefits but they stopped because of your earned income:

After your ninth month of trial work months in a 60-month period, your 36-month extended period of eligibility or EPE starts to run whether or not your earnings from work demonstrate an ability to engage in substantial gainful activity or SGA. If your earnings in your ninth month of trial work or thereafter demonstrate an ability to engage in SGA, you will receive a check for your SGA month (received the month after) plus two additional monthly checks. After that your benefits stop. However, while you are in your EPE, you can be reinstated for any month in which your earnings are at or below the SGA threshold. You can use the enclosed report forms to report a drop in income entitling you to a monthly disability check during your EPE.

If you receive both SSI and Social Security disability benefits: See page 2 above.

Never, never mail your original pay records unless you send them return receipt requested! Our experience is that many things sent to the Social Security office never make it into your file.

[SSI Recipients’ Report Form]

I am reporting a change in earned income for the month of ________________, 200___. Attached are photocopies of checks I received the month indicated (though the date on the check may be for the earlier month). The original check stubs will be brought in for the annual review. I understand that things sent to Social Security by mail are sometimes lost. If I had Impairment Related Work Expenses paid for with my earned income, I included information about the IRWE deductions below or on the other side of this letter. Please let me know if the change in income will mean a change in the amount of my SSI.

I swear under penalty of perjury that the foregoing statements are true and correct and that the attached photocopies are true and correct copies of the originals. Executed (signed) the date listed at the top of this letter in the city listed in my address above.

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