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Writer's pictureAlexandra Baig, CFP®

Employer Subsidy Helps to Maintain SSI/SSDI Eligibility

As Americans, we are obsessed with dieting and counting food related indicators like calories, sugars, carbs, trans-fats or, for those who want it simple, points. I suspect that even those who take these calculations seriously want an escape route. That is why as abundant as the counting methods are, the humorous statements about them are just as abundant:

  • Did you hear the one about the Las Vegas dietician, who got kicked out of the casino? He was counting carbs.

  • Chocolate chips are fattening, about 50 calories a tablespoon. However, chocolate chips eaten, while making chocolate chip cookies, have no calories whatsoever. Therefore, make chocolate chip cookies often, eat chips in the process, but give the cookie themselves to a dieting friend (see below).

  • Anything somebody made "just for you" must be eaten regardless of the calories because to do otherwise would be rude. But don't worry because the calories don't count.

  • Girl Scout cookies, bake-sale cookies, ice cream socials, and church strawberry festivals all have a religious dispensation from calories. I heard this last Sunday.

Deep down, most of us would be overjoyed if half of what we eat—preferably the unhealthy half—did not “count”.

Last blog, I talked about how earned income can affect a working person’s disability benefits. With Supplemental Security Income (SSI), the impact is immediate—after the first $65 of earned-income exclusion, a person’s SSI is reduced by 50 cents for every dollar earned until, if the monthly wages are high enough, the entire $794 is reduced to $0. Social Security Disability Insurance (SSDI) has a longer half-life, but if you begin to consistently earn above $1,310 a month—the level that demarcates “Substantial Gainful Activity” (SGA) for 2021--you will cease to be “disabled” for Social Security purposes; and your cash benefit will no longer be paid.


Many workers or potential workers, who are concerned about reducing or losing their SSI or SSDI benefits, are unaware that although calories, carbs, fat, and sugar always count for the purpose calculating weight loss, not all earned income counts for the purpose of calculating Social Security eligibility. This is because of a Social Security Work Incentive for people with disabilities called “employer subsidy”. The concept of employer subsidy and its use in the calculation of benefit eligibility is intended to account for the fact that some people with disabilities require unusual support or special conditions to complete the same amount of work as colleagues with the same job title and responsibilities, but with no disabling conditions. Without the support or special conditions, so the Social Security logic goes, the person with the disabling conditions would have lower productivity than the others. Calculating and subtracting out the value of the supports and special conditions provides a more accurate assessment of whether the value of the work produced—rather than the amount paid for it—surpasses the SGA threshold. To put it another way, if the employer pays the same amount to an employee who requires supports and special conditions as to one who does not, the employer is subsidizing the one with the requirements. Let us clarify this with some examples.


Angela receives SSI. Before she started working, she was eligible for the full $794/month payment. Angela took a job at a pet store. Angela’s manager really likes her because she is very good at keeping the animals—and hence their owners—calm and happy with the service. Angela quickly works up to working 35 hours/week at $11/hour for a gross monthly wage of $1,540. However, Angela does have special conditions. A physical disabling condition precludes Angela from lifting more than 20 pounds over her head. As a result, she is not required to work in the stock room or shelve heavy items, such as pet food bags. Pet store associates typically spend 20% of their time on such stocking activities. Because Angela’s employer excuses her from that responsibility but pays her the same as her colleagues, who must fulfill that responsibility, Social Security considers the employer to be subsidizing 20% of Angela’s wages. As are result, her “countable” earned income is $1,540 x 80% = $1,232. Angela thus remains below the SGA threshold and continues to be eligible for SSI. Note that the value of the employer subsidy is not considered when calculating the amount of SSI that Angela will receive.


Roger receives SSDI and also works part-time in medical billing. He uses screen-reading and translation-to-braille technology to process claims on his computer. Roger is excellent with his assistive technology and is also very proficient at processing claims, but the process of reading aloud is slower than silent reading. As a result, Roger processes an average of 50 claims per hour, while his colleagues, who do not need the technology, process an average of 75 claims per hour. All claims processors with the same seniority as Roger are paid the same as Roger. Roger has supports and special conditions in the form of his assistive technology use. Roger’s average productivity is 67% of that of his colleagues, even though all are paid the same. Roger makes $1,800 per month in his part-time work. On the surface of it, Roger’s earned income appears to exceed the SGA threshold of $1,310. However, 33% of Roger’s earned income is deemed to be not countable because the employer is effectively subsidizing Roger’s lower productivity. Roger is earning $1,800/month, but only producing $1,200/month of work. Thus, Roger still qualifies for his SSDI payment.


Melanie works and also receives SSDI. Mel gets tired more easily than her co-workers without disabilities. As a result, her employer lets her take two additional one-half-hour breaks per day beyond those allowed to co-workers with the same job description. Mel works 30 hours/week at a rate of $12/hour. Her gross earned income is thus $1,440/month and over the SGA threshold. However, since Mel has an additional hour per day of break time, Social Security considers that her employer is subsidizing her at a rate of $12/day worked or $240/month. As a result, Mel’s countable income totals only $1,200 and she remains eligible for her SSDI as well.


Harold receives SSI and also works. Harold works at the local library, shelving books and videos at a rate of $11 per hour. Harold works 35 hours/week and earns $1,540/month. Harold also has a job coach to help him learn new tasks and stay on task. Harold’s job coach is paid $11/hour also and he is with Harold in person for an average of 2 hours per workday. Even though the job coach is paid by a local disability support agency and not provided by Harold’s employer, the cost of the job coach is considered a subsidy in that Harold’s productivity is directly tied to the presence of the job coach. As a result, Harold’s countable income is $1,100 = $1,540 – $440 (monthly cost of the job coach). Note that the value of the employer subsidy is not considered when calculating the amount of SSI that Harold will receive.


I know I have eaten rich cake on the excuse that a friend baked it for me. My husband is committed to supporting the local Girl Scouts. Despite our magnanimous motivation, every delicious calorie of those items “counts” in our diet. People with disabilities who work, though, do get a bit of a break when it comes to their work income. If they make use of supports, accommodations, or special conditions, the value of these (if approved by the Social Security Administration) can be deducted from their income before it counts for the purpose of initial or ongoing benefit eligibility.

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