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Have Your Money and Use It, Too

In a cartoon, there was a rather large gentleman, wearing a hodgepodge of household gadgets connected by wires stands happily in front of a refrigerator with the door ajar. The cartoon caption reads, “There it was. The same piece of cake he ate yesterday. His time machine really worked. Think of the possibilities. He could have his cake and eat it too.”

Social Securities Plan to Achieve Self-Support (PASS) is a little bit like the cartoon man’s time machine. A PASS lets people with disabilities, who receive Supplemental Security Income (SSI), earn money and save up money AND keep those earnings and savings from being counted when the Social Security Administration evaluates whether they continue to qualify for the SSI. That is, you can have your higher income, your bigger assets AND your SSI benefit too. In order to use a PASS, you must have a disability and you must already receive SSI, OR be able to receive SSI through using the PASS and have income from a source other than SSI. If some of this sounds circular, it will make more sense shortly.

A PASS is a plan with concrete goals and objectives that, when followed, should help the SSI recipient reach a work goal and a level of earnings that will reduce or eliminate her or his reliance on SSI, SSDI and other public benefits. Broadly speaking, the goal could be to get a job, to get a better job in one’s current or another field, or even to start one’s own business. Let’s take Gina as an example. Gina is a young adult with a developmental disability. Gina has been receiving SSI since age 18. Once she aged out of school, she took a job as a bagger at her local supermarket. The job is OK, but Gina very much likes animals and has a way with them. While still in school, Gina participated in an internship program that placed her in a veterinary clinic. Gina has decided that she wants to become a veterinary assistant.

Gina has determined that the local community college has a veterinary assistant training program. It costs $4,000 for tuition, fees, books and supplies. To complete her coursework, she will need a laptop, which will cost $500. Gina does not drive and there is no regular bus line that can take her to the school, so she will need to take para-transit or an Uber to get to campus. This will cost $800 over the duration of the course. Once she finishes the training, the community college will help her find an internship. She will then need to purchase clothes for the internship interviews as well as scrubs for the actual internship once she gets it. These items will cost $200. Gina’s dream of becoming a veterinary assistant will cost $5,500.

Currently, Gina earns $665/month from her work at the supermarket, which pays minimum wage of $8.25/hour. She also gets $220 in Social Security Disability Insurance on her own work record. According to the SSI formula, the first $20 of her SSDI does not count and then her SSI is reduced dollar for dollar from the maximum SSI payment of $771 (2019). So that is a reduction of $571. Then, her SSI is further reduced by 50 cents for every dollar she earns over $65. That reduces her SSI by $300 more to $171. In total for the month, Gina gets $665 (work) +220 (SSDI)+$271 (reduced SSI) =$1,156. She needs much of it to pay for her living expenses. Moreover, in order to keep her SSI at all, she cannot have more than $2,000 in the bank in her own name. These circumstances make it hard to accumulate the resources she needs to achieve her dream.

However, a PASS plan can make it possible. Once Gina’s PASS is accepted by Social Security, non-SSI income that she diverts to the plan does not count and therefore does not reduce her SSI from the maximum. Moreover, assets held for the PASS do not count towards the $2,000 asset limit. Gina decides to put $500/month into her PASS. Now, these items of income do not count. So, Gina’s SSI is no longer reduced for her SSDI, which is all contributed to the PASS and the SSI is reduced by only $150 to account for the remaining $300 of earned income not contributed to the plan. She can thus receive $621 in SSI and she has a total of $665 (work) + $220 (SSDI) + $621 (SSI) = $1,506—a noticeable difference indeed.

In the initial example, Gina is already receiving SSI but suppose instead that she had no SSI, $220 in SSDI from her own work record and $300 in so-called “Childhood Disability Benefits” or “CBD” based on the work record of a retired parent. In this scenario, Gina’s unearned income would reduce her SSI by $500 to $271. Then, because of the earned income reduction of 50 cents on the dollar, she would be ineligible for SSI at all. But if she put $500 of the unearned income into her PASS, she would eligible for SSI after all.

A key here is that Gina’s PASS needs to be accepted by Social Security. For that to happen, the plan needs to have specific, measurable steps, a timeline, reasonable costs associated with each of the steps, an explanation of the sources that will fund each step, and an outcome that demonstrates how the plan-holder’s reliance on SSI and SSDI will decline after the successful plan’s completion. In Gina’s case, she has calculated the cost as above. She explains in the plan that she will need nine months to complete the course work and find an internship as well as three months to complete the internship. Once she has completed the internship, she expects to find a position that will pay her $12/hour, representing an increase of 45% over her current rate of pay.

Creating a PASS is not for the faint of heart—the application found here. It is 10 pages long, not counting the disclosures at the end. It also requires a bit of imaginary time travel—the applicant has to project forward to estimate the future costs and benefits of her/his plan and present them in a credible way. The form requires qualitative answers, such as why the applicant decided on a personal goal, and how the person will overcome limitations of the disability to achieve the goal. It also requires a lot of quantitative data around the cost of each step towards the goal, whether other entities can provide any part of the funding and how the plan writer will afford to contribute to the PASS, while still covering all her/his living expenses and other commitments. In addition, the plan writer needs to provide details of her/his academic background and work history so that the SSA can determine if the goal is feasible for that person’s circumstances.

I’m sure there is a classic paradox created by time-looping to re-eat the same piece of cake over and over again. Particularly if one’s present and past selves fight over that piece of cake. A PASS in contrast, is designed to break the cycle in which a person with a disability receiving benefits could never save and earn enough to enhance their work capacity and get off benefit.

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