When is a door no longer a door?

“When is a door no longer a door?  When it is ajar.”  The old children’s joke could be rewritten for Social Security Disability in this way “When is earned income no longer countable income?  When it is IRWE or Subsidy.”

In my last blog, I said that people with disabilities, who work and receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), may not want to rely on the Automatic Wage Reporting system in situations where not all of the income that shows up on their paystubs is “countable”.  In such cases, the automated system may overstate an individual’s monthly earned income, which could result in a lower payment (SSI) or loss of eligibility (SSDI).  A clear example of income that should not be counted as “earned” is compensation attributable to paid time off.  There are other examples of non-countable income that are more complicated and which require additional paperwork and communication with the Social Security Administration.  These are elements of non-countable income which are attributable to what the SSA calls “Work Incentives”.  Work Incentives are exactly what they sound like: items in the Social Security Disability regulations that encourage people who receive SSI due to disability or SSDI to start employment or to increase their level of employment.  The two most common Work Incentives are Impairment Related Work Expenses (IRWE) and Subsides and Special Conditions.  We will review both here.

The idea behind IRWE is quite straightforward.  People with disabilities frequently have expenses related to their health care or attendant care that people without disabilities do not have.  They incur these expenses for goods and/or services that sustain a physical or mental level of functioning that allows them to work.  For example, a person whose disability results in muscle tightness or spasms might require regular physical therapy, massage, or other treatments to maintain the range of motion that s/he needs for work.  A person with a behavioral-health disability might require regular sessions of talk therapy to manage her/his symptoms.  A person with a significant level of physical limitation might require personal-attendant care to complete certain activities of daily living.  A person with limited hearing might require hearing-aid batteries, periodic hearing-aid upgrades, or the maintenance of a cochlear implant.  A person, who does not communicate through spoken words due to autism or some other condition that affects communication, may require technological hardware and software to communicate.  A person who has epilepsy may need a service animal, which can anticipate the onset of a seizure and alert the person to take safety precautions.  Commonly, a person with disabilities of any kind has more doctors’ appointments and takes more medication that the general population.  The expenses attributable to these kinds of goods and services may be IRWE if they meet the following criteria:

·        The good or service is necessary to manage one or more of the person’s disability impairments.

·        The good or service is necessary to create or maintain the level of physical or mental functioning that is required by the person’s employment, even if maintaining function enables aspects of life outside of work, and…

·        The person must pay for the good or service out of pocket.  The cost cannot be covered by Medicaid, Medicare, private insurance, or any other third party.  Note that deductibles, co-pays and co-insurance expenses can be IRWE.

Subsidies and special conditions are related to the Social Security concept of Substantial Gainful Activity (SGA).  To be eligible to receive either SSI for disability or SSDI, a person must not only have a diagnosed mental, physical, or emotional impairment but also be limited by the impairment(s) such that s/he cannot perform SGA.  Whether or not a person is performing SGA is determined by her/his monthly gross earned income.  The SGA threshold for 2026 is $1,690/month for people who are not blind.  So generally speaking, if a person earns $1,690/month or more, s/he is not disabled according to the SSA.  However, if the person receives reasonable accommodations then, due to these accommodations, the value of the work the person produces in a unit of time may be less than the value of work that a person with the same job title but no accommodations would produce in the same unit of time.  When this is the case, the worker with a disability has a subsidy or special conditions and the SSA may not count all of her/his monthly gross earned income. 

An example of this would be a person whose job description includes five major responsibilities: 1) assisting customers to find items within the store, 2) finding and bringing to the service desk items purchased online, 3) ringing up and bagging items for customers at checkout, 4) processing returns and 5) unpacking boxes in the stockroom and stocking shelves.  Suppose that a worker’s disability limits the amount of weight that s/he can lift or move.  As a result, s/he is not required to unpack or stock items.  The person is doing 4/5 or 80% of the job duties—even if they are working the entire shift.  Thus, the SSA may only count 80% of their gross earned income.  Another example would be if a person’s disability makes them tire more easily than others.  As an accommodation, the employer permits the person to take 60 more minutes of break time spread out over an 8-hour shift while paying the person the same as everyone else.  The extra hour of break time is a subsidy and the value of the extra break time over the month may be deducted before the SSA counts the person’s earned income.  A third example would be if a worker with a disability has a job coach or receives extra help from a co-worker.  The value of the job coaching time (whether paid by the employer or a third party) or the value of the coaching time given by coworkers may be deducted from the person’s gross earned income before it is counted.  In general, if a worker with a disability has reasonable accommodations such that s/he receives extra help, or has fewer or lighter duties, or is permitted to work at a slower pace, or takes more breaks or time off, s/he may have a subsidy or special conditions.

With both IRWE and Subsidies and Special Conditions, the worker needs to document the expenses and how they relate to both the disability and the job, provide the information to the SSA, and get the Administration to agree and approve.  The documentation form is 12 pages long—no laughing matter, but with IRWE and subsidies in place, a worker can earn more without jeopardizing benefits, which is certainly something to smile about.  And the door to keeping these benefits will remain ajar.