Maximizing the Non-financial Benefits of Work

O. Henry’s short story, The Gift of the Magi, tells of a young couple, who have very little money but want to buy each other a worthy gift. The wife decides to sell her hair so that she can buy her husband a chain for his pocket watch. Meanwhile, the husband decides to sell his watch to buy his wife ornamental combs for her hair. A cynical reading of the story would label it a tragedy. Both gave up something of value to buy gifts that proved useless to the spouse under the circumstances. The author himself, though, is very clear that the story celebrates gifts and sentiments that are worth far more than money.

In my workshops and blogs, I encourage people with disabilities to work for many reasons. Work provides a sense of purpose and a place where an individual can use her/his gifts and contribute. Work provides an environment in which to learn new things and increase skills. Work is the primary social setting for most adults where they develop relationships with colleagues, partners, and clients, and also where they build social capital. Work is a large piece of the self-identity of most adults. All of these benefits are just as real for a worker with a disability. In addition, from a financial standpoint, work almost always makes a worker with a disability better off. “Almost,” however, is not “always” and there are some situations when working LESS would actually generate a higher or more predictable financial outcome, but it would come at the cost of reducing the non-financial benefits of work.


People with disabilities are eligible for two types of benefits. Supplemental Security Income (SSI) is a means-tested benefit that requires no Social Security credits. A person must simply demonstrate that s/he meets the Social Security definition of adult disability, which requires that the person’s disabling condition precludes her/him from earning more than the Substantial Gainful Activity (SGA) threshold, which is $1,310/month for 2021. Once that is established, how much SSI the person can receive depends on her/his income from other sources. Unearned income from another source reduces SSI dollar for dollar, but earned income only reduces SSI by 50 cents on the dollar. As a result, people with disabilities who receive SSI are always better off working than not working, because their earned income will always be larger than the lost SSI. Moreover, if their income fluctuates, they will be eligible for at least some SSI in any month that their earned income does not reduce their SSI receivable from the maximum ($794 in 2021) to $0.


People with disabilities, who have accumulated enough work credits, however, may be eligible for Social Security Disability Insurance, or SSDI. Unlike SSI, which is reduced for each dollar earned, SSDI is an all-or-nothing benefit. As long as one continues to meet the Social Security definition of having a disability, which includes the IN-ability to earn more than $1,310/month on a consistent and ongoing basis, a person is eligible for her/his entire SSDI benefit. But once a person begins to persistently earn even a small amount more than $1,310/month, s/he is no longer eligible for SSDI.


For example, suppose Rachel has both a work history and a disability that, initially, meets the Social Security definition. Rachel has enough Social Security work credits to be insured for SSDI and receives a benefit of $800/month. Then, Rachel finds a job and goes to work. She starts out working part-time and earning $700/month. Clearly, at this point, Rachel is better of by working. Now, she has $700 of wages on top of her $800 of SSDI for a total of $1,500. Rachel is good at her job and both her hours and her hourly rate increase. Her monthly earned income increases from $700 to $900 to $1,100 to $1309. So far, so good. Because she is still earning under the threshold for Substantial Gainful Activity, she is still paid her full SSDI benefit. At her highest earnings point—thus far—she takes home $1,300 in wages and $800 in SSDI for a total of $2,100/month, which is far better than her original SSDI-only $800/month.


But what happens if either Rachel picks up another hour/month or the minimum wage in her area creeps up a few cents? Suppose Rachel starts earning $1,320/month. Now, she is over the SGA threshold. While she will not become ineligible for her SSDI immediately, she will lose that cash benefit if she consistently earns that amount. From a purely utilitarian, financial standpoint, Rachel is better off earning just under the Substantial Gainful Activity threshold so that she can keep her entire SSDI benefit and have $2,100/month for her living expenses rather than lose the whole $800 of SSDI just because her work earnings increased by a few dollars. This is a real challenge that many workers with disabilities face. Should they hold back from working “too much” so that they can keep their entire SSDI benefit, or should they work more as they are able and as the work is available, even if their increased earned income is less than the SSDI benefits they would lose.


For some, the financial reality is such that they need that SSDI benefit to keep coming, so they are forced to trade away some of the non-financial benefits they get from work, such as either fulfilling more of their own potential or pitching in with the rest of the team when the company is really busy and needs employees to step up to the plate. For others, their pride in their contribution and their capabilities prevents them from artificially restricting their earnings. They want to take on all the work that is offered, since they know they can do all of this work and then earn as much as they can, even if they take a financial loss from that decision. The more fortunate have family, friends, or a source of unearned income to make up the difference. Others have to find a way to cut their budget.


The couple in O. Henry’s story could have made the utilitarian decision to forego giving each other Christmas gifts at all or could have settled for a token Hallmark card. Financially, that would have been the prudent choice to make. They did what they did because the value of the objects they gave up was less than the value of being able to give to each other. Some workers with disabilities view their SSDI benefits as less valuable than their enhanced work opportunities and thus opt to sacrifice the certainty of those cash payments for the opportunity to give more of themselves to society.

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