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Impairment Related Work Expenses Can Reduce Countable Income for Social Security eligibility

When I lived in Shanghai back in the 1990s, I, like many other expatriates, received a housing allowance as well as a slightly higher salary than colleagues, based back in the United States or Europe. This is because we incurred costs in order to do our jobs that our coworkers back home did not. Since it was difficult to buy a car and get a license, I had to pay for taxis or hire a driver to get to work. Since foreigners were only permitted to rent or purchase certain properties, it cost me a lot rent my flat. While certain foodstuffs were readily available, other items needed to be purchased abroad. There was a limited supply of English language books—I am dating myself, but that was before Kindle—so if I needed any, I had to ship them long distances. To keep my physical health, I had to pay the high price of membership to a fancy hotel gym and pay, without health insurance, for my medical care at special expatriate clinics. To keep my mental health, I needed to buy tickets to go back home to see my family and stateside friends, several times a year. I had all these expenses because I was working abroad, and I needed to pay them in order to do my job.

In a somewhat analogous way, people with disabilities, who work frequently, accrue additional expenses beyond those of their colleagues who do not have disabilities. For example, if I have a significant visual or motor impairment and cannot drive, I may need to use a ride-share service like Uber or Lyft to get to work, or I may need an accessible van. I may need to add features to my home either to facilitate getting ready for work or, if I am an entrepreneur working from home, to have an accessible home office. I may need to pay for technology, such as a screen reader or a speech-generating device. If I cannot use a traditional mouse and keyboard setup, I may need one that is adapted or even an eye-tracker to do my work. Working successfully with my disabling conditions might require the constant aid of a service animal that I pay to purchase, train, feed, and care for. I may have additional expenses not covered by insurance to maintain my physical or mental health at a level where I can work effectively. And I may need to travel to other locations to access some of my treatments. In some cases, insurance will pay for these things, but where it does not, I incur significant additional expenses in order to get and maintain a job.

The Social Security uses an adult’s (18 years old or older) capacity to work as the primary determinant of whether the person is or is not eligible for disability benefits. They define the ability to perform “substantial gainful activity” or “SGA” as the capacity to earn $1,310/month or more through work (2021). Despite what seems a fixed numerical cutoff, though, the administration strives to measure not what a person is paid, but rather the value of the work s/he performs. For this reason, the Social Security regulations allow a worker with a disability to request the administration to take into account the extraordinary expenses that their disabling conditions require. The person with a disability can request to have expenditures considered “Impairment-Related Work Expenses” or “IRWE” if:

  • The expense covers a good or service that the person requires due to her/his disability and related conditions.

  • The person requires the good or service in order to work, even it may be necessary in other contexts as well and…

  • The cost of the good or service is not covered by Medicare, Medicaid, private insurance, or any other third-party payer.

Once IRWE have been approved, the Social Security Administration will deduct them from the person’s income before determining whether the person is income-eligible for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI). Expenses that recur can be deducted regularly. If the worker incurs a large one-off expense, for example, for the purchase of an adapted vehicle or some piece of assistive technology, that expense can be allocated and deducted over a series of months.

For example, suppose Steve, who has a seizure disorder, receives SSI. To qualify, Steve must meet the Social Security definition of “having a disability”, which means that his countable income must be below $1,310. Suppose Steve then finds a job and goes to work. Steve begins to work 20 hours/month at $12/hour, making an average of $1,032/month (using an estimated 4.3 weeks/month). Since he is still making less than $1,310/month, he remains eligible for SSI. However, since his SSI is reduced by 50 cents for every $1 over the first $85, he only receives $320/month of SSI after adjusting for his work earnings. Since, Steve has a seizure disorder, he cannot drive and public transportation is not an option. He pays approximately $200/month to take a ride-share to work. In addition, he has a service dog who alerts Steve if he is about to have a seizure so that he can take safety precautions. Without the dog, it would not be safe for Steve to work. The dog costs $300/month to maintain. Steve obtains approval for $500/month of IRWE. Now, his countable income is only $532/month and he retains $570/month of SSI.

Or take the example of Joan. Joan has a behavioral health disability, and she was diagnosed in her 40s. By that time, Joan had accrued enough work credits to be insured for Social Security Disability Insurance or SSDI. Joan has a therapist that she sees weekly. The therapist does not accept Medicare or Medicaid. Joan also must take prescriptions to manage her condition. When her condition is under control, Joan is able to work. She earns approximately $2,000/month and has health insurance through her employer. Ordinarily, this would make her ineligible for SSDI, since she is performing SGA. However, Joan has to pay a $75 copay each week when she visits her therapist. She has to pay a $100 copay each month, when she visits the psychiatrist that manages her medication; and the medication itself has a $300/month out-of-pocket cost. Joan requests that the SSA consider these expenses as IRWE. The $700/month of IRWE reduce Joan’s countable income below the SGA threshold of $1,310, and Joan remains eligible for SSDI.

The Shanghai of the 90s was a modern, cosmopolitan city on par with New York, Chicago, Paris, or London. Even so, had my employer in Shanghai not made financial allowances for the extra expenses I incurred as an expatriate, I might not have been able to continue to do my job there. The SSA makes financial allowances for people with disabilities to take into account the extra expenses that they incur due to their conditions. By deducting approved IRWE, people with disabilities can stay eligible longer for a higher level of benefits.

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